As
part of the Housing Act 2004 the government introduced tenancy deposit
protection for all assured shorthold tenancies (ASTs) in England and Wales
where a deposit is taken.
From April 6th
2007, all deposits paid under an AST should have been protected within 14
calendar days of receipt by the landlord and from 6th April 2012,
deposits for all ASTs in England and Wales must be protected with 30 calendar
days of receipt by the landlord, this change is a result of the Localism Bill
2011.
The
aim of the legislation is to ensure that tenants who have paid a deposit to a
landlord or letting agent and are entitled to receive all or part of it back at
the end of that tenancy, actually do get back the amount to which they are
entitled.
Who is affected?
The
legislation covers virtually all new AST contracts through which private
landlords let property in England and Wales; however the following will not
need to be registered with a tenancy deposit protection scheme:
·
Company lets.
·
Student accommodation let directly by universities or colleges.
·
Resident landlords (those living in the property).
·
Landlords with tenancies over £100,000p.a.
Deposits
taken before April 2007 do not need to be protected by a scheme such as the
DPS; however if an existing tenancy is renewed and a landlord agrees to a new
fixed-term tenancy, the initial deposit taken must then be lodged with a
tenancy deposit protection scheme.
Why is
legislation needed?
The
return of a deposit at the end of a tenancy is by no means guaranteed, for
example according to the DPS in 2008/9:
·
70% were returned in full.
·
17% were returned in part.
·
13% were not returned at all.
Nearly
1 in 5 (17%) of tenants who had some or all of their deposit withheld felt that
it had been withheld unjustifiably. The
new tenancy deposit protection schemes will ensure all landlords safeguard the
deposits they take, which is in every landlords and tenant’s interests.
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