Residential Landlords Association warns Landlords to handle Deposits correctly

In April last year legislation changed concerning Tenancy Deposits, and the Residential Landlords Association (RLA) has stated that they are concerned that some landlords are still not entirely sure what is required of them, which could lead to them ending up in court. The recent case of Ayannuga vs. Swindells has highlighted the importance of landlords handling their Tenancy Deposits correctly, especially as the landlord eventually had to pay £950 to the tenant.

The court heard that the landlord had not stuck to regulations as he had not provided an information leaflet to the tenant concerning how the Tenancy Deposit scheme worked, even though he had undertaken the other regulations set out by the government. The current rules state that all landlords that take a deposit for an Assured Shorthold Tenancy must firstly protect the deposit in one of three government approved schemes within thirty days of receiving the money.

After this, landlords must issue the tenant (or whoever has paid the deposit on behalf of the tenant) two documents within thirty days – the first being a completed copy of the Prescribed Information including any scheme leaflet, and the second a copy of the tenancy deposit protection certificate. Finally, landlords have to set out clearly in their tenancy agreements how the deposit is being protected and where.

If found guilty of not adhering to all of these regulations, landlords can find themselves having to pay out three times the amount of the initial deposit – which is what happened to the landlord in this case. The RLA have therefore said that it is important for all landlords to make sure they talk to the provider of their deposit protection scheme in order to make sure that they do not miss anything out.

If you do forget to place your tenants’ deposit in a government scheme, or issue the correct paperwork before the thirty day deadline, then you will be subjected to a fine unless you are lucky and given some leniency as long as you fix the situation immediately. Also, be aware that some landlord insurance providers may also have clauses in their contracts that state that they will not cover you if you do not comply with the Tenancy Deposits regulations, so you could end up having to pay for the fines out of your own money.

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