AST Deposits: Don't Miss The New Deadline!

Landlords have until June to comply with new rules on the protection of tenant deposits for certain assured shorthold tenancies pre-dating 6 April 2007. Check to see whether your ASTs are affected!

Protecting tenant deposits - the need for change

As from 6 April 2007, landlords of most assured shorthold tenancies (ASTs) of residential properties have been required by law to register their tenants' deposits with an authorised independent protection scheme and provide details to the tenant. The rules were introduced to safeguard tenancy deposits and provide a route to alternative dispute resolution for disputes over whether deposits should be returned. Landlords who failed to comply with the rules faced difficulties in regaining possession of their properties, as well as the prospect of a fine of up to three times the value of the deposit.

However, court decisions have created confusion. The case of Superstrike v Rodrigues 1 considered the scenario where a deposit was received prior to 6 April 2007 but the tenancy "rolled over" after that date to become a statutory periodic tenancy. The Court of Appeal gave the tenancy deposit rules an unexpected retrospective effect and refused to allow the landlord to enforce its claim for possession because it had failed to protect the deposit.

Where are we now? The Deregulation Act 2015

The Deregulation Act brought new rules into effect on 26 March 2015. The legislation aims to simplify the tenancy deposit rules in connection with ASTs and to eliminate any confusion created by recent court decisions.

Changes and clarifications introduced by the Deregulation Act 2015 include the following.

Where a fixed term AST was entered into prior to 6 April 2007, a deposit was received and a statutory periodic tenancy arose after that date, landlords have a 90 day grace period from 26 March 2015 to register the deposit in one of the authorised schemes and to serve the prescribed information on the tenant. (This assumes that there are no...