LETTING & ESTATE AGENT

Scheme to unprotect deposits when tenancies go statutory periodic

Scheme to unprotect deposits when tenancies go statutory periodic

MyDeposits is to end deposit protection automatically after the end of the fixed term of the tenancy unless specific action is taken by the agent or landlord.

The scheme, a spin-off of the National Landlords Association, has not appeared to make any announcement about the change, but details appear on its website.

It says that users of its scheme – mainly landlords, but also a number of agents – will have 30 calendar days from the end of the fixed term of the tenancy agreement to renew or extend the deposit protection.

The agent or landlord must also re-issue the Prescribed Information to a tenant who stays on when the tenancy becomes statutory periodic. If the same tenant stays on but signs a new fixed-term AST agreement, then new Prescribed Information must be issued.

The scheme will send four email alerts as the automatic unprotection date approaches.

In a FAQ section, Mydeposits says it is unprotecting deposits as a result of the Superstrike case.

It says: “Since the Superstrike case we are making sure that our Scheme Rules are followed and helping landlords to comply with the law. Section C4 of the rules tell you that we reserve the right to automatically unprotect a deposit at the expiry of the fixed term and inform the tenant. We are now enforcing this rule. We won’t unprotect a deposit without telling you first. You will have plenty of opportunity to update your protection status.

“ … We will automatically unprotect a deposit protection 30 days after the fixed term ends unless you inform us tenancy has rolled into an SPT or has been renewed. You will receive several email reminders to make you aware that the protection is coming to an end. Please make sure your email address is up to date.”
 
MyDeposits is the only tenancy deposit scheme to be taking this action.

Chris Kendall, of the TDS, said: “The change only affects MyDeposits members.

“TDS letting agents have annual membership and their deposits remain protected when a statutory periodic tenancy starts and protection continues until they end it or they end their membership.

“TDS landlords protect on a ‘pay as you go’ basis for the life of the tenancy and their tenants’ deposits are also protected until ended by the landlord.

“The only issue for TDS members at the start of a statutory periodic tenancy is to re-serve Prescribed Information, in light of the Superstrike decision. Protection of the deposit continues and is not ended automatically by the Tenancy Deposit Scheme.

More on the changes at MyDeposits below:??

http://www.mydeposits.co.uk/landlords/auto-unprotect/how-it-will-work