Deposit protection law changes

5 April 2012

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As changes to tenancy deposit protection laws come into force, Shelter is calling on landlords to ensure they are protecting their tenants’ deposits, to protect themselves from penalties.

From Friday 6 April 2012, landlords will have up to 30 days from the start of a tenancy to place their tenant’s deposit in one of the three official protection schemes, up from the previous 14 days.

The fine for failing to do this will now be up to a judge to decide, rather than a fixed penalty, and will range from one to three times the value of the deposit, which will be awarded to the tenant.

Recent figures from the Association of Residential Letting Agents (ARLA) show that 47% of their members reported a rise in unplanned lettings, where homeowners are becoming landlords out of necessity rather than choice as they need to move but are unable to sell.

Shelter has long campaigned for the changes to tenancy deposit protection law, which tighten up loopholes making the law more effective for both tenants and landlords.

With the increase in homeowners becoming landlords, many perhaps for the first time, it is important that they are aware of their responsibilities towards their tenants to avoid unwittingly breaking the law, particularly with regards to tenant deposits.

With thousands of people  coming to Shelter every year for help with deposit disputes, we want to ensure that all landlords, whether professional or homeowners letting their property, are abiding by the law and avoiding unnecessary disputes and potential financial penalties.  

Campbell Robb, Shelter’s Chief Executive, said: ‘This legislation is enormously important for the three million households privately renting and for their landlords.

‘With these vital improvements the legislation can achieve what it was created for – setting out clear responsibilities and timescales for landlords to protect tenants’ deposits and providing a quick and efficient way of resolving any disputes.

‘We know that the majority of landlords want to do the right thing, the challenge is to ensure that they are not caught out by these changes and that they fully understand their legal responsibilities. We want landlords to know that this legislation benefits them as well as providing private renters with the reassurance that their hard-earned deposits are protected.' 

David Salusbury, Chairman, National Landlords Association, said: 'These changes are good news for landlords who now have extra time to ensure the deposit is properly protected. 

‘Tenancy deposit protection has been instrumental in improving standards in the private rented sector. It has revolutionised the dispute process, ensuring both parties receive a fair hearing if there is a disagreement over the deposit return at the end of the tenancy.’

Landlords can get more information about deposit protection here