Tenancy Deposit Scheme Q & A

 

Answer

From April 2007 it has been a legal requirement that all deposits paid relating to an Assured Shorthold Tenancy (an “AST”) must be protected in an approved Tenancy Deposit Scheme (a “TDS”)

 

Failure to secure the deposit or to comply with the statutory requirements to provide information concerning the TDS will mean that a landlord can be ordered to repay the deposit plus a sum of three times the amount of the deposit. Furthermore, a landlord will not be entitled to take possession proceedings under Section 21 of the Housing Act 1988. 

 

The Rules are complex. Even where the deposit has been properly secured, a failure to give prescribed information to a tenant means that a landlord will still be liable to repay the deposit and to pay compensation to the tenant.

 

But all is not lost. In a recent case, the Court of Appeal ruled that the landlord is able to correct the position before the case comes to court, and if he fully complies with the requirements then the landlord will escape the penalty. You need to ensure that you fully comply with the strict requirements for securing the deposit and also giving the prescribed information about the Tenancy Deposit Scheme to the tenant.

 

Provided you act quickly and meet your obligations before the court hearing, you may still be OK. Get legal advice, and act on it – fast.