Guest post: Deregulating the Tenancy Deposit Protection Scheme - What You Need to Know
As you may already be aware, if you don’t comply with the basic rules of the Tenancy Deposit Protection scheme (TDP), you could be subject to hefty fines. But a new bill could make life a bit easier for landlords.
The TDP aims to protect tenants’ deposits, making sure that landlords can return the money quickly and easily when it’s needed. Sadly, the scheme has been subject to complicated regulations that have caught a lot of landlords out.
The TDP’s basic rules state that landlords who take a deposit from their tenants are obliged to protect it by keeping it in an approved scheme. There are several different service providers to choose from. But the best ones also help you with dispute resolution and offer a quick, easy-to-use service.
The TDP also states that landlords must give information to their tenants about the scheme they’ve used, explaining the details of the scheme and the rights it gives to the tenant. If a landlord fails to do this, they could be fined up to three times the amount of the original deposit.
Superstrike: a new precedent
TDP was fairly clear and easy to follow, until a 2013 Court of Appeal case set a new precedent. The case, known as ‘Superstrike v Rodrigues’, ruled that if a tenancy had rolled over and past the end date of the initial contract, it must be treated as a new tenancy. This means that the deposit must be re-protected and new information issued to the tenant. Failure to do this can result in fines that aren’t covered by a landlords insurance policy.
Many landlords claim that this new precedent is unfair and difficult to manage. And calls have been made to make the scheme clearer and easier to adhere to.
The new bill
In response to these demands, a new Deregulation Bill has been released. The new bill relaxes the terms of the scheme in some circumstances to help protect landlords.
Under the new terms, if a deposit is adequately secured and protected when the tenancy rolls on past its fixed end date, landlords don’t need to re-protect the money or re-issue information to tenants. It’s now acceptable to leave the deposit secured and default to the previous terms without risking a fine.
What do you need to do?
If you’re already aware of the TDP and are implementing it for all of your properties then you don’t need to do anything differently. So that’s one less thing to worry about.