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Tenancy Deposits – Have you made sure yours is registered?

Since the Housing Act 2004 came into force on 6th April 2007 Landlords (or letting agents) have had to register deposits taken for tenancies with one of three Deposit Protection Schemes.

Since then there has been some confusion over tenants who paid their deposit prior to 6th April 2007 and subsequently had the tenancy renewed (to become a Statutory Periodic Tenancy by specific agreement) sometime after 6th April 2007. A decision in Superstrike v Rodrigues in 2013 ruled that those tenancies which were renewed after 6th April 2007 were considered to be new tenancies and the deposits should be registered with a Deposit Protection Scheme as required by the Housing Act 2004. This caused a problem for landlords as a failure to register the deposit would give grounds for a tenant to pursue a claim for the landlord to return the deposit and in addition pay a sum equal to three times the value of the deposit to the tenant.

The new Deregulation Act 2015 has resolved the confusion by legislating that all deposits received before 6th April 2007 relating to tenancies that have since been renewed or become periodic tenancies must be registered with a Deposit Protection Scheme. This new legislation gives landlords until 23rd June 2015 to comply with this obligation. If a landlord fails to comply they could be susceptible to a claim by a tenant for compensation of up to three times the value of the deposit, as well as being unable to terminate the tenancy using the section 21 Notice and accelerated possession proceedings procedure.