Reminder to Protect AST Deposits Received Before April 2007

News

Since 6 April 2007, it has been mandatory for a landlord to join a tenancy deposit scheme (TDS) where a deposit is paid by the tenant on creation of an assured shorthold tenancy (AST). Section 32 of the Deregulation Act 2015 (DA 2015) inserted section 215A into the Housing Act 2004 (HA 2004) extending the TDS requirements to ASTs created before 6 April 2007.

Section 215A applies where all of the following are satisfied:

Before 6 April 2007, a tenancy deposit has been received by a landlord in connection with a fixed term AST.
On or after 6 April 2007, a periodic AST is deemed to have arisen under section 5 of the Housing Act 1988 at the end of the fixed term AST.
On the coming to an end of the fixed term AST, all or part of the deposit paid in connection with the fixed term tenancy is held in connection with the periodic tenancy.
The landlord has not complied with the requirements of section 213(3), (5) and (6) of the HA 2004 in relation to the deposit held.

The requirements regarding securing the deposit in a TDS and the provision of prescribed information will be satisfied if they are complied with before the end of 90 days beginning with the commencement date of the DA 2015 (26 March 2015) (section 215A(3)(a), HA 2004).

If a landlord fails to join a TDS before 23 June 2015, the landlord may be liable to financial penalties and may be prevented from recovering possession of its property from the tenant.

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David Mallinson

Head of Department

Dispute Resolution

David specialises in property based litigation and breach of contract cases. He provides litigation support and guidance to a wide variety of commercial clients as well as to individuals.