Changes to deposit protection legislation

Having gained Royal Assent on 15th November 2011, The Localism Act 2011 is set to be introduced in the New Year.

As you may have read in previous editions of our newsletter, current deposit legislation has various loopholes in it that some landlords have been keen to use to their advantage. The Localism Act 2011 will put an end to this unscrupulous behaviour and see more protection given to tenants, which was the original intention when the requirement to protect deposits on Assured Shorthold Tenancies came into effect in April 2007.

Landlords/agents will have 30 days to protect deposits and issue the prescribed information to tenants, as opposed to the current 14 days. However, day 30 is the absolute time limit and tenants can issue a claim against the landlord/agent from day 31 onwards. The penalty for not complying with these timescales will not necessarily be three times the amount of the deposit as it currently is. Instead, it will be at the Court’s discretion but no more than three times the amount.

Under current legislation, only a current tenant is allowed to bring a claim against the landlord/agent. This meant that had a tenancy ended and the tenant vacated - but not yet had his deposit back - he couldn’t issue a claim. The new changes mean that former tenants will also be able to bring a claim for the aforementioned penalty.

Although the date is not certain as yet, it’s thought the Act will be in force from April 2012.

14 December 2011


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