Property Landlord advice: Tenant Deposit clarity?

By Steve Roulstone

I was reading an article this week about the Court of Appeal rulings on two recent cases and whilst I believe there is some underlying common sense in the decision in the short term, it has also been confirmed in my opinion, that long term, Landlords, who will probably have costs awarded against them in such circumstances, continue to risk the full weight of the penalties as laid out in the Tenant Deposit legislation if they do not register deposits correctly. It has of course raised a question of whether the legislation is now toothless, but it is the more practical fallout that I would like to look at.

14 Day rules

What the review has done is confirm that the 14 day registration is just that, a rule and therefore whilst it is right and proper that all Agents should register within the rules of the approved scheme that they are using, failure to do so is not covered by legislation confirming the appropriate penalties referred to within the legislation. It has also confirmed that should the Deposit not be registered within the 14 ruling then allowance will be given providing it is registered and therefore protected before any court action commences. In fact, all approved agencies cannot refuse to protect the Deposit. But I feel it is right and proper that whichever scheme an Agent or Landlord belongs to should be allowed to take appropriate action in such cases, but at present this is not the case.

Grey area

I hear that the matters ruled upon are now a subject of further appeal to a higher court. Add to this the ability for judges up and down the Country to still make rulings which do not have a common theme and we have what can only be described as a ‘grey area’ and this is the main factor that should be taken from this ruling.

Conclusion

To continue to risk penalty by failing to register a Tenants Deposit within the Tenants Deposit Scheme, apart from flying in the face of the intent of the original legislation, is a poor decision and will probably, to quote a well known saying ‘ all end in tears’ It is the role of National Companies such as ours and the Government approved agencies that carry out the role of protection, to discuss lobby and suggest ways of making this and any legislation work within the intent of the original act. At Castle Estates we will continue to carry out this role and as the agencies go about their task in getting the clarity we all need, to act against the intent will only give purpose to those who would argue against practical changes to make the legislation work to the better for all concerned.