Landlords face penalties for flouting deposit protection rules

By Anita Jaynes on 13 May, 2015

Landlords are being warned that time is running out to place tenants’ deposits into a Government-backed protection scheme, or face penalties.

Swindon-based Tenant Screening, which provides a vetting service to landlords and letting agents across the country, said some landlords may be unaware that they have just weeks left to hand over the deposits to a Tenancy Deposit Protection Scheme (TDP).

TDP’s came into effect on April 6 2007, and since that date all monetary deposits taken by landlords from tenants have had to be paid in. But now landlords have been told that deposits taken before this date are also liable – and have until the June 23 to comply and protect them in a Government-backed scheme.

Once deposits have been taken, landlords are obliged to give their tenants details of the scheme used, and the deposit must be safeguarded in this TDP within 30 days of receipt.

Kelvin McCarthy, Screening Manager at Tenant Screening, said landlords run the risk of losing their eviction rights under Section 21 of the 1988 Housing Act, and paying penalties, if they don’t comply.

“If the landlord fails to protect the tenant’s deposit, the tenant can apply to a county court at any time during their tenancy. If the judge then rules in favour of the tenant, the landlord could be ordered to repay the deposit to the tenant or, if the tenancy is on-going, pay it into a TDP,” he said.

“The court may also order the landlord to repay the tenant up to three times their original deposit and apply a penalty resulting in the landlord not being able to activate eviction procedures.”

Kelvin said he believed some landlords and even letting agents could be unaware of the need to place deposits paid to them before 6 April 2007 into a TDP. “In many cases, people rent for years – some rentals will go back decades – but landlords need to be aware that these are affected.”

Tenant Screening offers landlords and letting agents across the UK a screening service for potential tenants. Kelvin and his team can make a number of checks on would-be tenants ranging from credit checks, DBS checks, residency and ID verification, to employment and landlord referencing, as well as identifying court or insolvency information held against the prospective tenant.

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Pictured above:Kelvin McCarthy, Screening Manager at Tenant Screening