Localism Act 2011 Changes Tenancy Deposit Rules for Landlords

All Landlords of residential property should be aware of their obligations regarding registration of tenants’ deposits with one of the Tenancy Deposit Schemes, however on 06 April 2012, Section 184 of the Localism Act 2011 came into force which makes changes to the tenancy deposit scheme procedures.

The key changes are:

  • Under the old rules, a Landlord was allowed 14 days in which to register the tenant’s deposit with one of the approved Tenancy Deposit Schemes. From the 6th April 2012, a Landlord now has 30 days in which to register the deposit.
  • While the Housing Act 2004 clearly states where a Landlord in breach of the registration time period, a tenant may take the Landlord to Court and seek damages of 3 times the deposit amount, the precedent set by the case of Tiensa v Vision Enterprises meant that if a Landlord had registered the deposit albeit it late, the tenant could not bring a claim.The decision made in this case has now been reversed which means that late deposit registration will no longer be a valid defence for the Landlord.
  • The amount of compensation payable by the Landlord is now at the discretion of the Court, but is still limited to 3 times the amount of the deposit.
  • The ruling made in the 2011 case of Hashemi v Gladhurst meant that claim could not be made after a tenancy had ended. This has now been overturned and tenants may bring claim against a landlord for failure to register a deposit after the tenancy has ended.

It remains to be seen how the new rules will affect future cases in practice, but it is important that as a Landlord you are aware of the changes and that you and any letting agents acting on your behalf comply with the new regulations.

Commercial Litigation Solicitor, Jason Skelton can review your existing tenancy agreements and advise you of any potential issues with existing tenancies so that you are compliant with the new rules and aware of any potential claims. If a claim is made against you by a tenant, we can help you in defending a claim.

Contact Jason Skelton on 01246 564011 or email your enquiry using our contact form.