Since 6th April 2007 all deposits taken by landlords must have been safeguarded by one of four Government approved schemes.
Landlords can choose which scheme they wish to use and must safeguard each deposit and inform the tenant which scheme has been used within 30 days of receiving the deposit. The Government has awarded contracts to four companies to run its tenancy deposit schemes which 3 are insured based schemes and one custodial scheme.
All landlords must comply with these regulations.
Failure to observe the rules & regulations regarding Assured Shorthold Tenancies are harsh: The Court can make an order stating that you/the Landlord must pay the deposit back to the tenant. In addition to this:
- The Court can make a further order requiring you/the Landlord to pay compensation to the Tenant of between one and three times the amount of deposit.
- The Court could order further costs
- Whilst non-compliant, the landlord will forfeit the right to serve a Section 21 Notice to repossess the property (until either the landlord returns the deposit to the tenant in full or with such deductions as the tenant agrees; or if the tenant has taken proceedings against the landlord for non-protection and those proceedings have been concluded, withdrawn or settled.
