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Tenancy Deposits – Good news for Landlords

Posted on July 22, 2015

The Deregulation Act 2015 came into effect on 26 March 2015, and includes important changes to deposit protection legislation. It amends and clarifies the law about when a tenancy deposit will need to be protected in a deposit scheme.

As a reminder, from 6 April 2007, when a tenancy deposit is taken in relation to a residential tenancy the landlord is required to place the deposit money in a deposit scheme (for example Deposit Protection Scheme or Tenancy Deposit Scheme) and to provide the tenant with Prescribed Information which contains details about where the money has been placed.

If the deposit has not been protected, or the Prescribed Information has not been given, the landlord will not be able to issue a valid section 21 notice (notice to quit) upon the tenant, the consequence being that landlords would not be able to recover possession of the property if the tenant refused to vacate. Worse still, the tenant may be able to apply to the Court for a financial penalty to be levied on the landlord for between 1 and 3 times the deposit amount.

Whilst many landlords and managing agents were up to speed with these requirements, the case of Superstrike –v- Rodrigues (2013) potentially made the deposit protection requirements even more onerous. In this case, the Court of Appeal ruled that when the fixed term of a tenancy expires and rolls into a ‘statutory periodic tenancy’ (e.g. a tenancy running from month to month), this constituted a ‘new’ tenancy and any deposit would have to be protected and Prescribed Information issued all over again. This was even if the deposit protection requirements had been met at the outset of the tenancy.

There was confusion over the consequences of Superstrike, but the upshot was that landlords and managing agents were best advised to take steps to ‘re-protect’ the deposit and to send out another set of Prescribed Information, all seemingly pointless where the deposit had already been protected and the tenant had been made aware which scheme had been used.

In a nutshell, the Deregulation Act solved the confusion by providing that:

If the deposit was received on or after 6 April 2007 and was correctly protected at the time the deposit does not need to be re-protected and you do not need to issue prescribed information served again on renewal (or at the start of a statutory periodic tenancy) provided:
• The tenant(s), landlord(s) and the premises remain the same; and
• The deposit is held in the same scheme.

In practical terms, most deposit scheme providers will require landlords to re-protect the deposit where a new fixed term tenancy is started or where a periodic tenancy contains significant changes to the terms, such as increased rent or a new tenant named in the agreement. You may also need to notify your provider when the tenancy rolls into a periodic tenancy. You should ask your deposit provider about their requirements.

The Deregulation Act also introduced new rules where a deposit was taken before 6 April 2007. If you require any further advice about that, please contact me on

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