The Deregulation Act came into force on Thursday 26 March 2015 and provides an immediate amendment of the law in relation to tenancy deposits. These changes are very welcome for landlords of assured shorthold tenants.

The pre-Dergulation Act position was that, if an Assured Shorthold Tenancy expired and became a periodic tenancy then, potentially, the deposit had to be re-protected and the prescribed information sent to tenants at the start of each period, which would usually be monthly.

Following the Deregulation Act, if the deposit was received after 06 April 2007and was protected with the prescribed information served at the outset, provided the deposit remains the same with the same scheme, the landlord will be treated as if he/she has complied. There is no need to re-protect the deposit and/or re-serve the prescribed information on renewal or roll over into a periodic tenancy.

If the deposit has not been protected at all, the Act doesn’t change the landlord’s liability.

Other Impacts on Assured Shorthold Tenancies:

The Act also provides many other amendments and we consider that the following may be of interest to Managing Agents:

  • An agent can now sign and serve the prescribed information on behalf of the landlord. All references to “the landlord” within the legislation have been amended to read “either the landlord or a person who acts on the landlord’s behalf in relation to the tenancy”.
  • There is no longer any requirement for a S21 Notice to expire upon the last day of a period of the tenancy. It is now a clear 2 month period from the date of the service of the Notice which removes a common hazard from S21 Notices.
  • S21 notices can no longer be given during the first 4 months of a tenant’s occupation under a tenancy agreement. Many S21 Notices are served at the commencement of the tenancy which will no longer be permitted. This gives the tenant the same 6 month security of tenure but makes timing of the notice trickier where possession is required at the end of a 6 month term.
  • A S21 notice will only have a shelf life of 6 months after which possession proceedings cannot be issued on that notice and a fresh notice will be required.

The Act also contains provisions to prevent the retaliatory eviction of tenants following orders being made by the local authority relating to disrepair at rental properties. This is not yet in force and we shall give further details when this comes into force later in the year.

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