 |
|
Residential Tenant Guarantee Scheme
As from 6 April 2007 all deposits paid by tenants in relation to shorthold tenancy agreements must be secured (within 14 days of receipt by the landlord) via a “tenancy deposit scheme”. If a landlord fails to comply with this scheme he will not be allowed to serve Notice to regain possession of the premises. He will also be at risk of a significant fine. (a) Custodial The landlord decides which scheme he wishes to use.
Custodial: Under this scheme the landlord pays any deposit received into an account set up by a government approved “scheme administrator”. The landlord will be entitled to receive interest on the sum deposited. At the end of the tenancy the parties should seek to agree how the deposit will be paid out – in which case the scheme must pay out the money in a maximum of 10 days. If a court makes a direction as to whom the money shall be paid – the scheme must comply with this. Insurance Scheme: Under this scheme a landlord may participate in a scheme – for which he must pay a fee. In these circumstances he is permitted to initially retain the deposit. The scheme administrator may direct the landlord to pay the money into the scheme at any time and if the landlord defaults his membership may be terminated. The scheme administrator must maintain insurance – to ensure repayment of the tenant’s deposit in the event of the landlord’s default
Disputes In the event of a disagreement between the landlord and tenant at the end of the tenancy the scheme administrator will direct the landlord to pay the deposit into the scheme account within 10 days. Disagreements may be resolved either through the Small Claims Court or a voluntary alternative dispute resolution scheme. INFORMATION PROVISION The landlord must give information to the tenant confirming:-
PENALTY FOR NON COMPLIANCE If the landlord fails to fulfill his obligations at the outset of the tenancy the tenant may apply to the County Court who may order the immediate return of the deposit to the tenant. The court will also provide that the landlord must pay compensation to the tenant in the sum equal to three times the deposit. As mentioned above, whilst in default of the regulations the landlord may not serve a Section 21 Notice (seeking possession). Remember it may amount to a criminal offence and render the landlord liable to civil sanctions (injunction and compensation) if he seeks to gain possession of residential property by other means. PREPARATION Landlords should consider: -
Landlords may wish to take particular care about recording condition of the property pre and post tenancy either by contributing with specialist contractors or at least by securing photographic evidence of condition.
We are able to offer specialist advice.
Call 01323 720142 now for a consultation with a specialist Solicitor or a Lawyer at Lawson Lewis & Co.
Please contact: Steven Judge (Eastbourne) (01323) 720142 - E-mail
Further information available from:
|