By law, all landlords in the UK must register their tenants’ deposits in a certified scheme so that the money is safe and if there are any disputes the deposit protection agency will step in and ensure that any decisions are fair. Until a few months ago, this type of scheme only applied to landlords in England and Wales, however with the increase in dependency on private rented accommodation the Scottish government also decided to implement a deposit protection scheme of their own.
However, it has been reported that as many as four thousand tenants throughout the UK know that their deposits are not deposited in a scheme, which is why the solicitors Goldsmith Williams has started advising them to contest this with their landlords. Senior partner at the firm, Eddie Goldsmith, said: “We know that the majority of landlords do follow legal guidelines when dealing with tenant’s deposits. More stringent requirements were introduced on 6th April 2012 and require the landlord to protect the tenant’s deposit and supply the tenant with prescribed information within a 30 day deadline.”
“These rules are designed to ensure that the tenant’s deposit is safe, even if their landlord goes out of business. It also gives the tenant protection should they have a dispute with their landlord when they move out of the property and – for example – there is some damage to the property as the landlord would not just be able to keep the deposit to cover repairs. Most landlords that we work with are aware of these requirements and are already following them as they afford the landlord some protection too.”
Mr Williams went on to warn landlords that by not securing a deposit in a registered scheme they are also putting themselves at risk even if they are covered with landlord insurance. He added: “Section 21 Notices are invalid if they are served on a tenant where the deposit has not been protected and/or the prescribed information has not been supplied to the tenant. If the landlord hasn’t complied with the 30 day deadline then the landlord would need to return the deposit prior to the service of a Section 21 Notice.”
“If the deposit is not protected and/or the prescribed information not given then the tenant will be able to bring a claim against the landlord in the County Court, immediately after the end of the 30 day period. The landlord (and/or agent) will not have any defence to this.”