Who is responsible for securing deposits?
Under the Housing Act 2004, the landlord is responsible for protecting the deposit. If the landlord has instructed an agent to take the deposit, the ultimate responsibility will remain that of the landlord. The landlord must ensure that the agent is instructed to deal with the deposit in accordance with the legislation.
What happens if a deposit has not been protected?
Where a Landlord fails to comply with Tenancy Deposit Protection, there are two sanctions:-
1. Unable to use Section 21 notice
Currently, a landlord can serve two months' written notice in the prescribed form under Section 21 of Housing Act 1988 on a tenant in order to terminate a tenancy at the end of a fixed term, or after a fixed term has expired. If necessary, a landlord can obtain an order for possession of an AST in the County Courts under Section 21 of the Housing Act 1988. However, where a landlord fails to comply with Tenancy Deposit Protection, no Section 21 notice may be given in relation to the tenancy until such time as the legislation is complied with.
2. Payment to the Tenant
Tenants can make an application to a County Court under Housing Act 2004 if they believe that their deposit is not being safeguarded, or where they have not been given the prescribed information about the scheme in which the deposit is safeguarded within 14 days of the landlord receiving the deposit.
Where the court is satisfied that the landlord has failed to comply with these requirements, or the deposit is not being held in an authorised scheme, the court must either order the landlord to repay the deposit within 14 days of the making of the order, or order the landlord to pay the deposit to the custodial scheme administrator.
The court must also order the landlord to pay the tenant three times the deposit amount within 14 days of the making of the order.
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