From April 2012, agents and landlords will have 30 days in which to protect a tenant’s deposit, rather than the current 14.
The change is part of ‘tweaks’ made to tenancy deposit protection in the new Localism Act 2011.
The new law proposes to relax the requirements governing existing Deposit Scheme regulations. Compliance within 30 days will be required and courts will exercise discretion in awarding penalties of between one and three times the deposit amount if necessary.
This contrasts with existing rules which require compliance within 14 days and contains a strict penalty of three times the deposit for non-compliance.
The Government’s reasoning behind the changes is to encourage a system whereby the courts enforce the regulations more diligently by making the requirements more equitable.
The tenancy deposit scheme has been criticised by many for being too harsh on landlords. Previously, the only penalty available to the courts was the imposition of a fine equivalent to three times the deposit, irrespective of the severity of the breach. This one size fits all approach made the courts reluctant to enforce the legislation
Welcoming the changes, the chief executive of the Tenancy Deposit Scheme, Steve Harriott, said: “I am pleased the housing minister managed to find the parliamentary time to get these amendments to the legislation through.
“The recent court decisions were causing confusion about tenancy deposit protection regulations. These amendments make it clear that tenancy deposit protection is here to stay.”
The likely implimentation date for these changes is 6 April 2012 - but this is still to be confirmed!
*Source - Centrikproperty