Do you let residential property? If so you need to comply with the rules on holding tenants deposits.
Since 6th April 2007, landlords who let property under an Assured Shorthold Tenancy (AST) have been required to pay all deposits into an approved Tenancy Deposit Scheme (TDS). In addition, a Landlord must also provide certain information to its tenant; this is referred to as the prescribed information. This information was required to be provided within 14 days from receipt of the deposit, although from 6th April 2012 this has been extended to 30 days.
A failure by a landlord to comply with the above requirements can be very costly. There are two main sanctions; the first is that the landlord may be prevented from recovering possession of the property. Secondly, the landlord may be required to return the deposit and pay compensation by way of a fine of up to three times the deposit to the tenant (or other person who pays the rent).
Should a landlord find that it has not complied with the above, then it should immediately do so. Until this information has been provided, a landlord cannot serve a Section 21 Notice to bring the tenancy to an end.
The late provision of the prescribed information may result in the landlord having to return the deposit and pay a fine to the tenant of up to three times the deposit. A tenant can apply to the court even after the tenancy has ended.
In light of the above, landlords should ensure that they fully comply with the requirements regarding a tenant’s deposit.
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