Tenancy deposit law will have 'more teeth' after changes

Tenancy deposit protection schemes will have more teeth, once changes are implemented next April, says a lawyer.



Olivia Tassell, a property lawyer at Boodle Hatfield, said that courts will be more likely to enforce the new regulations, which come under the Localism Act.



The changes to the Deposit Scheme regulations have been puzzling agents and landlords, as they appear to relax the requirements, giving 30 days to comply and allowing the courts discretion to award a penalty of between one and three times the deposit amount, should they fail to do so.



This is in contrast to the existing legislation which requires compliance within 14 days and contains a non-negotiable penalty of three times the deposit for non-compliance.

 

The Government’s aim behind these changes appears to encourage the courts to enforce the regulations by making their requirements fairer.

 

Tassell said: “The tenancy deposit scheme has been criticised by many for being too harsh on landlords.



“Recent case law shows that the courts have been reluctant to enforce the legislation, perhaps because the only penalty open to them was a fine equivalent to three times the deposit, irrespective of the severity of the breach.

 

“The courts have appeared to seek ways round the legislation, resulting in the regulations being taken less seriously by some landlords.

 

“Landlords will welcome the extension in time to comply with the scheme, and whilst the courts may be more willing to enforce the regulations, the penalties are likely to be less harsh.

 

“Furthermore, those landlords who have historically prided themselves on their compliance with the regulations will take comfort in the fact that they should now be enforced more rigorously across the board.”

 

We will keep you updated on the regulations and the changes. The likely implementation date is April 6.

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