Deposits and the Housing Act 2004 - Part 2

From April 2007 Landlords who manage their own properties will no longer be able to hold tenants security bonds / deposits unless they are held in a TSD (Tenancy Deposit Scheme). This will be a legal requirement. If the Landlord does not comply with the new rules they will not be able to regain possession of their property until the security bond / deposit is transferred into a TSD and the tenant can apply to the court to order the Landlord to repay the security bond / deposit.

Click here for further information on our new letting package designed for landlords who still want to manage their own properties but don't want to deal with the new Tenancy Deposit Scheme.

Excerpt from the Letting Centre website (www.letlink.co.uk)

 Requirements relating to tenancy deposits
A landlord will not be able to take a deposit in respect of an assured shorthold tenancy unless it is to be covered by a TDS.

A landlord will have to:

deal with a deposit in accordance with an authorised scheme, comply with the initial requirements of a scheme within 14 days and give the tenant the appropriate information relating to the deposit within 14 days of receiving the deposit. Until this is done, the landlord will be unable to regain possession of the property using the usual 'notice only grounds' for possession. Under section 21 of the Housing Act 1988 a landlord can obtain an order for possession of an assured shorthold tenancy at any point after the first six months of the tenancy providing any fixed term has expired and they give the tenant at least two months written notice.

Preventing a landlord from being able to use this ground will provide the tenant with a much greater security of tenure and will act as an incentive for landlords to ensure deposits are safeguarded by a TDS.

Court proceedings
Where a landlord has not arranged for a deposit to be dealt with in accordance with a scheme or provided the tenant with relevant information within 14 days of receiving the deposit, the tenant can apply directly for a court order for the landlord to repay the deposit to that person or pay it into a custodial scheme.

If the landlord has failed to comply with these provisions by the date of the court hearing, the court must make the order as requested and order the landlord to pay the applicant an amount equivalent to three times the deposit within 10 days.