TENANCY DEPOSIT Tenancy Deposits - new scheme on the way Beware the "New Mousetrap" A Game of Cat and Mouse The government introduced the present scheme when it passed legislation in 2004 (the "Housing Act 2004"). Private landlords and tenants alike will recall the problems associated with failures to protect deposits leading to contested claims for triple damages. The Court disapproved of that scheme and in 2010 and 2011 the Court of Appeal in two cases known as "Tiensia" and "Gladehurst" effectively dismantled it. Parliament has therefore moved to create a new scheme and on 15 November the Localism Bill 2011 received Royal Assent. However, as so often is the case now with government, the new rules are to come into force on a date to be decided. The New Mousetrap The new Tenancy Deposit Scheme has the following key features: - The deadline for the landlord to protect the deposit is extended from 14 to 30 days;
- Compliance must now happen within the 30 days and is strict so that if it does not, the tenant can call for both protection of the deposit and a penalty;
- The penalty is discretionary with a new minimum being one multiple of the deposit and a maximum three times the deposit. If the parties cannot decide what the penalty should be the tenant asks the Court to decide it and there are no guidelines for how the Court should, within the minimum and maximum, decide the penalty.
Once the deposit has been protected (even if it happens late) an Assured Shorthold Tenancy can be terminated by the landlord. Watch this space, in the press, for the announcement of the introduction of the new scheme. If you have any queries, contact Oliver Price at oliver.price@wansbroughs.com or by telephone 01380 733318. | 
