Since 6 April landlords now have up to 30 days from the start of a tenancy to place their tenant’s deposit in one of the three official protection schemes, up from the previous 14 days.
The penalty for failing to do so will now be up to a judge to decide, rather than a fixed penalty and will range from one to three times the value of the deposit, which will be awarded to the tenant.
Recent figures from the Association of Residential Letting Agents show that 47% of their members reported a rise in unplanned lettings, where homeowners are becoming landlords out of necessity rather than choice as they need to move but are unable to sell.
With the increase in homeowners becoming landlords, many perhaps for the first time it is important that they are aware of their responsibilities towards their tenants to avoid unwittingly breaking the law, particularly with regards to tenant deposits.
With thousands of people every year coming to Shelter for help with deposit disputes, the housing charity wants to ensure that all landlords, whether professional or homeowners letting their property, are abiding by the law and avoiding unnecessary disputes and potential financial penalties.
Campbell Robb, Shelter’s Chief Executive, said: "This legislation is enormously important for the three million households privately renting and for their landlords.
"With these vital improvements the legislation can achieve what it was created for – setting out clear responsibilities and timescales for landlords to protect tenants’ deposits and providing a quick and efficient way of resolving any disputes.
"We know that the majority of landlords want to do the right thing, the challenge is to ensure that they are not caught out by these changes and that they fully understand their legal responsibilities. We want landlords to know that this legislation benefits them as well as providing private renters with the reassurance that their hard-earned deposits are protected."
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