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Protecting a tenants deposit in a savings account is not enough

housesHere is a question to the Blog Clinic from Anthony who is a landlord

We have issued our tenant a section 21 and got him to sign that he had received it.

He has been to the local council who have stated the Notice is not valid as when he began his tenancy his bond was not put in a government-backed scheme (my wife thought putting it in a Savings Account was enough).

His notice is due to end in a few days time. What can we do ?????

Answer

I am afraid the Council are right – you will need to serve a new section 21 notice (and wait another two months) after you have corrected the problems that have invalidated your first notice.

Despite the fact that they have been around since 2007 you are not alone in failing to understand and comply with the (very strict) tenancy Deposit rules.

The rules say that all deposits must be protected in a government authorised tenancy deposit scheme within 30 days of receipt of the money AND that a notice giving prescribed information must also be served on the tenant during that time.

The three schemes are TDS, My Deposits and the Deposit Protection Scheme. An ordinary savings account is NOT sufficient.

There are two penalties for failing to comply:

  1. You cannot serve a valid section 21 notice, and
  2. Your tenant can bring a claim against you for up to 3x the deposit sum

There is nothing you can do about the second one other than hope that your tenants won’t bring the claim.

However, you will be able to serve a fresh section 21 notice (assuming that you have complied with all the other section 21 requirements) after you have refunded the deposit money to your tenant. Provided you are able to prove this if it is disputed.

You will find guidance and details of all the eviction rules (not just the deposit related rules) on my Landlord Law service.

Although as you are clearly not familiar the system you may prefer to go to a specialist eviction company such as Landlord Action who will be able to advise you.

The post Protecting a tenants deposit in a savings account is not enough appeared first on The Landlord Law Blog.



This post first appeared on The Landlord Law, please read the originial post: here

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