Landlords can expect tougher tenancy deposit protection laws after the courts have proved the current rules are unenforceable.
The Residential Landlords Association (RLA) has disclosed talks are underway with the Communities and Local Government Department about changes to the rules.
The new rules could start from October – but are more likely to come in to force from April 2012, says the RLA.
The government want to change the current rules to give tenants greater protection but by still being fair to landlords. The likely changes will be:
Giving the landlord or agent 30 days to protect a deposit rather than the current 14 days
Beefing up penalties for breaking the rules with fines of a minimum one month’s rent up to a maximum of three months’ rent. The current penalty for failing to protect a deposit is three times the value of the deposit.
Letting renters claim up to six years after a tenancy has ended. The Court of Appeal ruled renters could not claim compensation for failure to protect a deposit once a tenancy had ended.
“One concern that the RLA has is that the government currently intends the changes to be retrospective. The issue of failing to give tenants the ‘prescribed’ information also has to be addressed properly, in the RLA’s view,” said a spokesman.
“The RLA also believes that while the government is proposing a minimum penalty of the equivalent of one month’s rent, there may be instances where no penalty is appropriate.
“However, whilst the RLA continues to advise its members to continue to protect deposits and give their tenants the ‘prescribed’ information in line with the Housing Act, the RLA is doing its best to ensure that suitable amendments are made by Parliament.”
These rules relate to tenancy deposit protection in England and Wales. Scotland has separate rules that will soon take effect.