Senior associate solicitor Jessica Irwin, in our Dispute Resolution team, offers a reminder for landlords of residential property on registering Assured Shorthold Tenant (AST) deposits.
Since 2007, any deposit paid to a residential landlord by an Assured Shorthold Tenant (AST) must be placed in one of the Government-approved Tenancy Deposit Schemes. Since 2012, the time limit for compliance is within 30 days of receipt of the deposit. The landlord must also provide the tenant with “prescribed information” about the scheme within the same timeframe (essentially telling the tenant where and how the deposit is being held). For information about the limits on the amount of such deposits since the introduction of the Tenant Fees Act 2019 effective from 1 June 2019, please read our earlier blog article.
Where the landlord, tenant and premises remain the same, there is no requirement for the landlord to re-protect the deposit and re-send the prescribed information each time a replacement tenancy is created or a statutory periodic tenancy arises upon the expiry of a fixed term tenancy (as long as the deposit was originally, and remains, protected in accordance with the legislation).
However, where the landlord changes (eg. where the landlord sells its interest in the property) and the deposit is transferred to the new landlord, this triggers the requirement for the new landlord to protect the deposit and serve new prescribed information within 30 days of receipt. A recent case has confirmed that the new landlord cannot rely on the fact that the previous landlord complied with the legislation when the deposit was originally received from the tenant.
If the new landlord fails to comply, they will lose the ability to serve a Section 21 Notice to terminate the tenancy on the “no fault” basis unless the deposit is first returned to the tenant (assuming that Section 21 remains an option for obtaining possession. For further information on this point. please read our earlier blog article.
All landlords should be aware that failure to comply with the tenancy deposit legislation can result in tenants being entitled to claim a penalty from the landlord of up to 3 times the amount of the deposit.
By way of a further reminder, where the landlord’s interest in a tenanted property is assigned, the new landlord should be aware of their obligation to advise tenants, by way of formal notice, of the assignment of the landlord’s interest in the property and provide an up to date address in England & Wales for service of notices on landlords.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
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