The Deregulation Act 2015 was passed on 26 March 2015 and brings certainty to the Tenancy Deposit Scheme (TDS) legislation which came into force on 6 April 2007.
Previously, a number of Court cases resulted in there being a cautious view taken by landlords trying to obtain possession of residential property by serving a notice to end an assured shorthold tenancy under section 21 of the Housing Act 1988. The cases had resulted in section 21 being invalid where landlords had not complied with the TDS legislation.
The Deregulation Act 2015 has clarified the position. This gives landlords a period of 90 days from 26 March 2015 to comply with their TDS obligations where, on 26 March 2015 a periodic tenancy is in existence and the landlord is holding a deposit in relation to that tenancy. Changes include the following:
- Where you have a periodic tenancy which arose prior to the 6 April 2007 and the deposit is unprotected, in order to serve a valid Section 21 notice, it must be protected by 23 June 2015 and the prescribed information served on the tenant. However there are no penalties for landlords who choose not to protect these deposits in these circumstances.
- Where the periodic tenancy arose on or after 6 April 2007 and the deposit is unprotected, the deposit must be protected by 23 June 2015 and the prescribed information served on the tenant. In these circumstances, the financial penalties will apply to any landlords who fail to comply.
- The Courts had previously decided that where a statutory periodic tenancy arises, the prescribed information has to be served, even in circumstances where this was done in respect of the original fixed term tenancy. This placed onerous obligations on landlords who had previously complied with the TDS obligations.
The Deregulation Act 2015 has amended the Housing Act 1988 so that where the landlord has complied with its TDS obligations once, he will not need to repeat them when a statutory periodic tenancy arises, which will be a welcome change for landlords.
Michael Davies is a senior associate in the dispute resolution team in Exeter and is a specialist in property and land disputes. To contact Michael, please call 01392 210700 or email drx@stephens-scown.co.uk