Changes to the Tenancy Deposit Scheme

07 May 2015

On 26 March 2015, the Deregulation Act 2015 came into force, heralding wide-ranging effects on residential tenancies. The immediate changes concern the much-criticised and litigated Tenancy Deposit Scheme; however, there are further changes on the horizon which concern Section 21 Notices.

On 26 March 2015, the Deregulation Act 2015 (the DA) came into force, heralding wide-ranging effects on residential tenancies. The immediate changes concern the much-criticised and litigated Tenancy Deposit Scheme; however, there are further changes on the horizon which concern Section 21 Notices.

The DA has now clarified the position regarding deposits following the decisions in Superstrike v Rodrigues, and Charalambous v Ng. In particular, deposits received before 6 April 2007 in relation to tenancies which are now statutory periodic tenancies, are now subject to the deposit protection requirements. The time for complying with this, however, is extended to 90 days from 26 March 2015 by which time the deposit must have been protected in a relevant scheme and the prescribed information given to the tenant. The DA does not appear to place a financial penalty on the landlord for non-compliance but no Section 21 Notice can be given until such time as the deposit is returned to the tenant.

For deposits received on or after 6 April 2007, providing the deposit was protected and the prescribed information given to the tenant during the period of the original tenancy, the landlord does not need to repeat the process where: 

(a) a periodic tenancy comes into being on the coming to an end of the original tenancy, 

(b) the landlord grants the tenant a new tenancy in respect of the same premises, providing the deposit continues to be held in connection with that new tenancy in accordance with the same authorised scheme.

It is also important to note that the general sanction of being unable to serve a Section 21 Notice where the deposit is not being held in accordance with an authorised scheme continues to apply where the deposit has been taken before, on or after 6 April 2007.

With any luck, the DA will make it much easier for landlords and tenants to know where they stand in relation to deposits, regardless of when the tenancy commenced.

If you have any concerns about these changes we are hosting a breakfast seminar on Wednesday 27 May, which will explain how the changes may affect you. 


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