Get ready for new deposit protection rules

Oi!  I have already said all this here http://www.property118.com/index.php/the-devil-is-in-the-detail/21710/ 

Imitation is the finest form of flattery

Any landlord who has an unprotected deposit needs to protect it NOW it will be too late after 1st April if you have held it for more than 30 days.

These new regs are going to catch a lot of LL and accidental LL out.
Of course tenants who are not happy with treatment by a LL who is; let us not a regular LL will wait  for the initial AST six months,  vacate and submit a claim; meaning their 6 month tenancy will have cost them 2 months rent.
The LL won't be able to apply any negative information about the tenancy as the tenants will have complied with their tenancy terms.
Do this twice a year and as tenant you can live for a year on 4 months rent.
So tenants will be hunting out ignorant or rogue LL looking to take them to the cleaners.

Hi Mary

Looks like we've been caught with our trousers down here doesn't it? LOL

We employ a professional journalist to write several of our news coulms and Jack has obviously not picked up on the fact that duplication has occurred here. Never mind, this one has hit the Google News and your comment links back to your far more informed and well debated article so people can hop over to that if they want more information 🙂

Does anyone know if this applies to deposits that pre-date
the existing scheme and as such do not have to be protected under the current regulations?
i.e. AST pre-dating 2006

The previous rules were that deposits held before the deposit protection rules came into force did not have to be protected in an approved scheme.

Any idea what the position is under these new regulations for such deposits?

It didn't take long for this bureaucratic exercise to start growing more heads, I knew it would as soon as it was introduced. That is why I gave up on taking deposits and just introduced two months rental payment in advance, admittedly it is easier with student lets because I go through all the rooms in August and replace any damaged stuff,carpets etc as a matter of course, it is largely second hand furniture, so the cost is minimal. You still get the odd bolter, but usually their Guarantor will stump up, if not,then it is easier to just lump it rather than involve yourself with a lot of palaver with the deposit holder. Who needs all that grief? Move on and get you life back. 

Is it better to return the deposit to the tenent and not bother with the new legislation.. and is this legal. 

Any deposit taken prior to the Housing Act 2004 kicking in does not have to be protected until a new AST has been signed since, in this case the new AST constitute as new tenancy and the deposit which was carried forward must be protected.

Any deposit taken since the HA 2004 kicked in must be protected NOW because after April 1st these deposits will be subject to the change in the rules that say we have only 30 days from the date that we take the deposit or transfer the deposit to a new AST in which to protect it. We will NOT have 30 days from April for existing tenancy ONLY for new tenancies or transfered deposits where a new AST has been signed after April 1st

There is no legal requirement to take a deposit but any monies taken to protect us against losses or damages would be considered to be a deposit regardless of what we call it.  Monies taken to hold a property pending signing of contracts should be receipted as Non refundable retainers NOT deposits to hold.  If these monies become part of the deposit once the AST is signed the 30 day clocks starts ticking on that date and the monies must be protected.

If we return the deposit to our tenants in full during the tenancy we can serve a Section 21 after that date but a tenant may still have a case for non protection during the time it was held if it is taken after April1st. The case law that enabled landlords to protect a deposit late but before a court appearance will not stand after April 1st.

In summary

If you take monies to protect yourself against losses or damages protect it within 30 days
If you take rent in advance DO NOT take more than 1/6th of the annual rent
If you take a non refundable retainer receipt it clearly
Do not serve a section 21 which predates the deposit protection date
Make certain that you provide the tenants and anyone else who has provided the deposit with the deposit protection certificate and prescribed information within 30 days
If you take an admin fee receipt this as a non refundable admin fee and do not specify what it covers other than "setting up the tenancy"

I have given more information on all these points in my various articles on this site.  You will also find many questions answered and discussions around this issue on those threads.

Mary mega sulking because she has already said all this on those discussions and in particular on the Devils in the Detail post

Hi Mary

You have indeed said all of this before but nowhere near as succinctly. This is a brilliant post and makes the rules very clear without having to read through all the questions, answers and chit cat in the comments section of the other thread. With your permission I would like to run this commentry as a seperate article in a weeks time to keep the subject fresh in all landlords minds. I'm happy to credit the article back to you or if you prefer to include it with something fresh I'm happy either way. Not all readers see every article and every comment so it's essential that we repeat vital messages such as this one. News articles also go straight into the Google News feed which attract all sorts of interest from people who may never have engaged with Property118 before too.

Thanks for this 🙂

I have been advised by the DPS that if a deposit was taken before the HA 2004 kicked in and the deposit is increased after the HA 2004 kicked in, then the entire deposit must be protected, not just the increase, even though there is no new AST.