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Amendments to the Tenancy Deposit Scheme - The Next Court of Appeal Decision Waiting to Happen?

Lina Mattsson and Steven Ross provide some clarification on tenancy deposits

The Tenancy Deposit Scheme ("TDS") was introduced on 6th April 2007. In essence, s213-215 of the Housing Act 2004 ("2004 Act") require private landlords to protect their tenant's deposit by placing it into a TDS and serve prescribed information within 30 days of taking the deposit. Failure to comply prevents landlords from serving a section 21 notice seeking possession and entitles the tenant to a penalty amounting to between one and three times the value of the deposit.

All very straightforward, you might think. However, these provisions have resulted in six Court of Appeal decisions and three legislative amendments. The latest amendments came into force on 26 March 2015 to address the effect of the two latest Court of Appeal decisions: Superstrike v Rodrigues and Charalambous v Ng. But have the amendments served only to cause more confusion and the potential for more Court of Appeal decisions in the future?

Deposits received before 6 April 2007
The new s215A deals with cases when a landlord received a deposit in relation to a fixed term assured shorthold tenancy ("AST") before 6 April 2007 and a periodic tenancy arose on or after this date. The 2004 Act now provides that in these circumstances, landlords who have not yet complied with the requirements must now do so on or before 23 June 2015. Landlords who do not comply will not be able to serve a s21 notice to evict their tenant. Clearly, this can always be remedied by the landlord returning the deposit in full (or with any agreed deductions), but this will often be an unattractive option for a landlord.

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