Declare your deposits

When letting properties on assured shorthold tenancies all landlords (rogue or otherwise) are required to register deposits.

That was Parliament’s intention when it drafted the Housing Act 2004. However, some landlords have acted under the misapprehension that the act does not apply to them. So far they have been private landlords, but given the increase in social landlords using ASTs, social landlords need to be aware too.

All landlords are required to regis-ter deposits with the government’s custodial or insurance-based sche-mes and provide prescribed infor-mation about the same within 14 days to the tenant. They must also provide this information to, say, friends or relatives who have paid a tenant’s deposit, as they are defined in law as the ‘relevant person’. Failure to comply could result in the landlord having to refund the deposit plus a further three times the deposit.

However, there have been several occasions where landlords have failed to comply; the most recent Draycott v Hannells Letting Limited reached the High Court in February. It seems, at the moment at least, that as long as the landlord has complied before the tenant commences proceedings, then the landlord will not suffer the consequences of having to refund and pay a further three times the deposit.

While landlords may be able to avoid the three times the deposit punishment, they should be aware that until they have complied, possession cannot be sought or obtained pursuant to a section 21 notice requiring possession.

Paul Hayes is head of housing litigation at Lewis Silkin
paul.hayes@lewissilkin.com

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