Localism has arrived and there's 30 days to act

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It's here! Section 184 of the Localism Act has now come into force as of 6th April 2012. 

Plenty of information is available on the new regulations (see the links at the bottom of this page) and the new 30 day absolute deadline for deposit protection is straight forward, especially if you are accustomed to abiding by the existing 14 day limit. However, some landlords and agents have contacted TDS with concerns about how the new law applies to their existing tenancies.

 

D-Day is 6th May...

The new penalties for failing to meet obligations relating to deposit protection are stated not to apply if the tenancy was in effect on or after 6th April 2012, and the landlord has, before the end of the period of 30 days beginning with that date  —

  •  complied with the initial requirements of an authorised scheme in relation to the deposit, 

AND

  •  given to the tenant and any relevant person the information prescribed for the purposes of section 213(5) of the Housing Act 2004.

This gives deposit holders a period of 30 days grace to comply with the deposit protection requirements, where they haven't already done so, for a deposit received before 6th April 2012, and where the tenancy is running on or after that date. So if you haven’t already complied with the requirements, you should ensure that you do so within 30 days - before the 6th May.

What needs to be protected?

Debates over the Localism Act urging agents and landlords to register all of their deposits have caused some concern about what constitutes a deposit. Remember, the Localism Act does not change the definition of a tenancy deposit:

(s.212 Housing Act 2004) “tenancy deposit”, in relation to a shorthold tenancy, means any money intended to be held (by the landlord or otherwise) as security for—
(a) the performance of any obligations of the tenant, or
(b) the discharge of any liability of his, arising under or in connection with the tenancy.

Other blog articles go in to this subject in more detail (When is a deposit not a deposit? and Tenancy deposits - confusion and clarity) but put simply, if money paid to the landlord for the reasons stated above in the 2004 Act is intended to be repaid to the tenant, it can be considered a tenancy deposit and should be protected.

If you need further advice on this matter, please contact TDS as soon as possible, and certainly in advance of May 6th.

 

Localism Act guidance and documentation

 Localism Act: The Housing Act 2004 and the changes introduced by the Localism Act 2011

Localism Act: Some frequently asked questions on the changes introduced by the Localism Act 2011

Prescribed Information and Clauses - Fifth Edition, April 2012 Changes highlighted

Summary of Rule Changes 2012

 

 

the tenancy was in effect on or after 6th April 2012, and
the landlord has, before the end of the period of 30 days beginning with that date—
complied
with the initial requirements of an authorised scheme in relation to the deposit, and
given
to the tenant and any relevant person the information prescribed for the purposes of
section 213(5) of the Housing Act 2004.

Posted by Chris Kendall on 6 April 2012

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