Tenancy Deposit Scheme Legislation change

[trick1234]

I started a tenancy in December 2009 and my annual rent equated to £30,000 per annum.

 

At the time of signing my contract in December 2009, the legislation stated that my deposit did not have to be registered to a deposit scheme eg mydeposits.co.uk because the rent is above £25,000.

 

The legislation changed during my tenancy on 1st October 2010 to say that any tenancy with rent below £100,00 per annum had to now be protected.

 

My landlord did not protect my deposit from this date, is this breaking the law? If so then i know i am entitled to my full deposit plus compensation through the courts.

 

The main confusion is that the legislation changed mid tenancy.

 

It has now been 4 weeks since moving out and i am nowhere closer to getting my deposit returned as the estate is holding it.

 

Any help will be much appreciated. I have spoken with mydeposits and the citizen advise bureau.

 

Thanks in advance.

[GuidoT]

I presume mydeposits and CAB say not or do not know hence why you have posted here.

 

See below on page three, it states the position is unclear as there are no transitional arrangements.

www.wslaw.co.uk/publications/download/189/assured-tenancies

[GuidoT]

See here that says the deposit (

 

http://www.residentialland.com/blog/index.php/2010/10/residential-land-the-tenancy-deposit-scheme/

 

Not sure on what authority this proposition is based on though.

 

See here also that states law is unclear.

 

https://www.larkinsurance.co.uk/corporate-clients/articles/commercial-insurance-news/905-the-tenancy-deposit-scheme-how-it-affects-landlords

 

In your position I would certainly take the point that it should have been placed in a TDS and that you now require 3x back and it should help focus their minds of release the deposit.

[GuidoT]

See also below from here:

http://www.stephensonharwood.com/knowledge/publications/09_10_Is_your_deposit_protected

 

When does a deposit need to be protected?

Currently, any new AST created on or after 6 April 2007 is affected. The landlord must protect any deposit received by the tenant within 14 days of receiving it. The legislation was not retrospective.

On 1 October 2010, the annual rent threshold for an AST will rise to £100,000. There are differing views on whether the requirements relating to tenancy deposits will apply to ASTs already in place on 1 October 2010 or whether they will only apply to brand new ASTs created on or after 1 October. It seems that the legislation will apply retrospectively and given the implications for non-compliance, it is safer to take the cautious view that it will apply retrospectively. This means any existing tenancy with a rent of up to £100,000 should be protected in one of the TDS's by 1 October 2010.

If the legislation proves to be retrospective, any existing tenancy with an annual rent of between £25,000 and £100,000 will become an AST overnight on 1 October 2010. Landlords in this higher bracket will have to protect deposits for the first time and if they fail to do so by 1 October they could be in breach of the law.

[GuidoT]

There is only one thing that it is clear, that is it is unclear.

[trick1234]

Thank you Guido T. You indeed confirm my suspicions that it is a grey area. Do you know where i may find any previous cases that have gone to court as i am sure there are many people in my dilemma, i may be able to gauge the outcome of these to help better inform me on my next move.

 

I suppose a no win no fee lawyer may be best suited for this if i do take it to court as the compensation could potentially be double my original deposit?

[GuidoT]

No case will have reached court on this point as yet, too soon since the change. Probably not see the point tested this year.

 

The statutory compensation is 3 times the deposit plus the original deposit.

 

Next step for you should be to write to your landlord telling him you are claiming the 3x and the return of the deposit.

[trick1234]

Ok will do. Thanks for your help. I'll let you know how it pans out!

[mariner51]

The other part of the story that is 'unclear' at the moment - LL can protect deposit in approved scheme at any time up to Court hearing, to avoid 3X comp claim, but if not protected, any s21 Notice would be illegal.

 

Since you have moved out / surrendered the property, some may opine that the AST no longer exists and deposit protection relates only to live AST

 

I believe DPS offer free dispute resolution service, even if deposit not protected, so give them a ring before you spend any unlikely compo award on Court costs.

[Aequitas]

The recent Court of Appeal decision was that a landlord can avoid paying a penalty if he protects the deposit any time before the hearing. This was arrived at by taking the wording of the statute literally even though this produced a result that was surely not what Parliament intended. If the same approach is taken with respect to this question the position would seem to be as follows:

 

Section 214 (4) HA 2004 provides:

 

Any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme

 

If we are take this at face value the important words to answer this question are those in red.

 

So:

 

1. If at the time a tenancy begins it is not an AST there is no obligation to protect any deposit.

 

2. If the tenancy later becomes an AST it is impossible for the landlord to comply with section 214 (1) because he cannot deal with the deposit as from the time when it is received.

 

Conclusion.

 

3.There is no need to protect a deposit if at the time it was taken the tenancy was not an AST.