The Tenancy Deposit Scheme: Back from the Brink – again?

In "The Tenancy Deposit Scheme: Unscrupulous Landlord`s rejoice!" article on the website (October 2011), I discussed how the cases of Tiensia and Gladehurst had seemingly dealt a fatal blow to the Tenancy Deposit Scheme ("the TDS").

However, The Localism Act 2011, which received Royal Assent on 15 November and which came into force on 6 April 2012 makes a number of amendments to the Housing Act 2004 which should bring reinvigorate the TDS.

The amendments mean:

- the period for complying with the requirement to protect the deposit and provide the information to the tenant about that protection will be 14 days to 30 days.

- complying with the requirements of the Act before the hearing of the tenant`s application for sanctions will no longer enable a landlord to escape the sanctions of the Act (reversing Tiensia).

- a penalty will be imposed if the Landlord fails to comply with these requirements, although it will be at the Court`s discretion to set the financial penalty for non-compliance at between 1 and 3 times the deposit, rather than a penalty of 3 times the deposit as is currently the case.

- if the tenancy has ended, the tenant will still be able to bring a claim for non-compliance with the requirements of the TDS (reversing Gladehurst).

- it will be possible to serve a section 21 notice once action has been taken to rectify a failure to comply with the TDS by the agreed repayment of the deposit (in full or with an agreed deduction) or following determination, settlement or withdrawal of any claim by the tenant for non-compliance with the TDS.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.