Tag Archives: Professional Management

22Feb 2012

Current Property News: New PIN documents for new Tenancy – the corrected story.

⋅ Leave a Comment

By Steve Roulstone

Last week I posted a Blog about the changes to the way in which any Tenancy is viewed once it becomes a periodic agreement in relation to the Tenant Deposit Scheme and the various protection schemes that exist. I made a very simple mistake, because I did not take into account the initial legislation, which stipulated that the Tenant could not be charged for the procedures required to register the deposit in any way. My post, which has since been removed, suggested they could, so it is now time to correct that statement.

The changes.

The changes as brought about by the Localism act 2011 and a court case (Suupere v Nice) from July last year. They are clarification of what has always been the case, as far as what needs to be done with paperwork once an agreement becomes periodic. (Passes the fixed term without signing a new agreement) As far as the legislation is concerned, it now makes it clear that the best advice and therefore the only way to deal with the matter to hand, is that a new PIN form will need to be issued and signed, confirming that as far as TDS legislation is concerned, a periodic agreement becomes a new agreement the moment it passes the last day of the fixed term.

Cover all matters.

It therefore also makes sense to issue a new set of Terms and Conditions at the same time, to ensure there are no errors in relation to any changes that have been made to Terms and Conditions during the initial Tenancy. This is of course dependent upon the scheme with which the deposit is protected and can change from scheme to scheme.

Timing.

The one area which is still under consideration is from when it is best to issue new PIN and T&C’s from? The court case was heard last July, the legislation becomes law in April, but was entered on to the statute books last November. The jury is still out on this one, but it seems a date of the turn of the year would be a good date to start from. This means retrospectively issuing new documentation and ensuring all new agreements are dealt with from now onwards as they become Periodic. It also means ensuring that Tenants are made aware of what they will be required to do within our information packs (given to Tenants at the beginning of their Tenancy) from now on as well.

Landlords to pay.

Now to correct my mistake from last week, of course Landlords will have to pay for this service, because the initial legislation, which this interpretation of requirements is based upon, does not allow Tenants to be charged for the service. In retrospect (how easy that is!) we do of course understand why, but I have a feeling many of our Landlords will need to be convinced of why. Not the physical why, but why once again they are being asked to bear more costs!

Effect in the market.

We will now discuss how this will proceed and will be writing to Landlords whether they be Full Management or Tenant Find, to explain what they must do and what our costs will be for carrying out the role. No doubt Landlords will wish to push longer fixed term agreements on Tenants now which some could argue is not in the Tenants interest, but that is a small matter when considered against what may happen to self managed properties should Landlords ignore the requirements. So overall, another gentle nudge towards Full Management may well be the outcome, a situation we are not going to complain about! Oh and the costs, as far as we are concerned will not change whether paid by a Landlord or Tenant, so we can clearly state that we had no intentions of charging the Tenants any more than we will now have to charge our Landlords!

21Feb 2012

Property Landlord advice: Standards and Legislation still not getting through.

⋅ Leave a Comment

By Steve Roulstone

As a Letting Agent I looked at three houses yesterday, all at the invite of the Landlord and all for evaluation. Three Landlords who were all asking for my opinion on the readiness and valuation of their property in the current market place, and all three were due differing responses for varying reasons but the issue that stood out was that the message about legislation and property readiness is still not getting out there and we still need to preach to either the unconverted or the unknowing.

House of Mulitple Occupation.

The first was a terraced property which had been lovingly restored by the owners. The Gentleman had made a really good job of renovating the property and had managed to change a property so much that it no longer felt like a traditional terraced house, even though it was. The issue for this Landlord was whether the property would take three or four Tenants as a room let. What came as a surprise to him were the requirements for a House of Multiple Occupation that he had to adhere to, because even though he had been carrying out the work for several years, he was not aware of what was needed. He will now speak to the Council, because even though the property did not need a License, the regulations surrounding safety, once more than two family groups occupy the home, remain the same. He will then be able to decide between renting per room, or renting to a Family.

Property in fit condition.

The second was a house that had been purchased cheaply and the new owner, having started some work, was looking for advice as to a valuation. Unfortunately, I had to confirm that in my opinion it needed far more money spending on it before it was even fit for purpose. This concerned a new RCD fuse board, new carpets, all of which were badly fitted, new decoration, all of which was multi prime colours, repair and make good to several areas such as stair rails, chipped tiling, poor flooring and a general electric check because of the obvious additional wiring installation that had been added to the original for what looked like several years. Not forgetting what looked like unvented wall mounted gas heaters and we had a property which was far from fit for purpose.

Unwanted information?

 I certainly felt that the Landlord did not feel the property was far from ready once he had completed the new bathroom, and my sincere hope is that some other agency does not take the property on without the work being carried out, but such calls do become one of the hardest things we have to do as Agents.  Hopefully my message set around my central point that with such choice of quality housing about, why should a property in this condition be rented out in competition with the rest of the market was understood. The worry is why both of the properties above should get to the stage of what we saw yesterday without knowing what was needed before this stage?

Good advice.

Perhaps it is that people do not really want to hear? But this is not the case with the first Landlord, because we have already looked after two of their houses and they are good Landlords, so it is a fact that the legislation message has not got through, which is doubly compounded, when we heard of just how much time the Landlord had spent negotiating with the local council over matters surrounding access to the property over the last three years? There is a lesson to be learnt here, even for us as Agents, for whilst we knew the Landlord owned the property and was carrying out renovation, we were not aware of its intended use until yesterday and I definitely feel we should have had a conversation prior to the properties completion. As Tenant Find Landlords, we have assumed they knew and the lesson is clear for us to see, enquire ask and speak at every opportunity and what came as a surprise could have been avoided.

Third time lucky.

The third visit came as an absolute pleasure, here was a Landlord who had moved back in too his home, between Tenants whilst he bought a new house for himself having sold his last house before buying again. In the meantime, he had taken the opportunity to refurbish the house again, fitting new carpets, re-decorating and fitting a new Bathroom. Every task he got spot on, using clean fresh schemes with neutral colours, taking the opportunity to tidy up the garden, laying slate along the edges of paths to reduce the burden of weeding for the next Tenant and improving the appearance. Seven years ago, when the house first came to the market, it looked just as it does now and all the time we have been asked for comment and opinion as to what was being done. And therein lies the answer, no matter if we feel we are interfering, to do our job correctly, we must speak and spread the word to Landlords as much as possible.

Lesson learnt.

Of course we cannot speak if we do not get the chance to speak as with the second Landlord, before we are invited to the property, so to put that right, apart from just offering it to the people we do speak with, we are going to physically advertise free advice to Landlords for the next three months. That way, we might just save a Landlord on another day, being so surprised about what was needed from him in presenting his property to the market in a fit and proper state in the first place! 

02Feb 2012

Property Landlord advice: Block Management: LVT wash their hands.

⋅ 1 Comment

By Steve Roulstone

Before Christmas this year, I wrote about an LVT case where having proven that the RMC we were acting for were correct in their actions, the remaining Leaseholders had been left to pay the not unsubstantial costs for fighting the case bought by one Leaseholder against the RMC. These costs, as pointed out at the time, were mainly bought about because of the manner in which the LVT instructed us to respond to each and every point raised by the Leaseholder, both in substance and number of points raised.

No recourse.

I have spent several weeks, again making sure no further costs were generated in investigating the situation and without charging for my own time, discovering, that even though the case brought against the Management Company failed in every point, that there is no re-course what so ever to the leaseholder responsible, at all. I am staggered by this, because it now means that the remaining Leaseholders will all share the resulting liability between them and be forced to pay for one persons inability to understand the Landlord and Tenant act and its implications when applied to accounting methods.

Wring case, wrong time.

It would be impractical to list the case as presented to the LVT, but I really cannot understand how, with the knowledge of what the case was based upon, we were instructed by the LVT to have to go to the lengths we were instructed to go to, when had they insisted upon a pre-trial hearing, which is in their power to call, the facts behind what the Leaseholder wanted from the action bought, did not fall within the remit of the LVT in the first place. Having requested such a hearing, I do not believe it fair either to hide behind any lack of request ‘with specific detail listed’ as the LVT should direct in these matters, exactly as they did during the three day hearing!

This is a result?

So the LVT instruct us to put a great deal of time and effort into answering to the case, which has the effect of generating cost that the LVT awarded, so they can be recovered, but not from the Leaseholder who brought the case in the first place, apart from their equal share, but from the remainder of the Leaseholders on the site, when the actual wishes of the Leaseholder who brought the action, did not fall within the jurisdiction of the LVT !! We have done our best to gain instruction from the LVT of our options to seek direct recourse, but rather than tell us the law will not allow such actions, we were again advised to seek the information elsewhere, which, if not for relationships called upon from our contact base, could have caused further cost in discovering the RMC is powerless under these circumstances.

Some may call that justice; some may say that the LVT exists to protect Leaseholders, not by my book, not in this case!

01Feb 2012

Property Landlord advice: Basic Health and Safety for Landlords

⋅ Leave a Comment

By Mike Edwards.

Todays post by Mike Edwards, represents information that the Castle Estates group have been posting for many yeras, but just never changes. Giveing truth to the old adage, you just cant beat good advice!

Many landlords are still blissfully unaware of even basic health and safety rules when leaving their properties for rental, according to The Association of Independent Inventory Clerks (AIIC). For example, one in ten rented properties have items such as soft furnishings, bedding and furniture that do not have the required fire & furnishing compliance labels and have to be removed. What’s more, AIIC members are still finding the dubious – and illegal – practice of landlords ‘selling’ odd items of furniture, without fire & furnishing compliance labels, to incoming tenants.

 It is also of course illegal to let the tenants happen to ‘find’ an ideal piece of furniture outside the back door and for the Landlord to offer to ‘hire’ the furniture for a peppercorn rent. Pat Barber, of  The AIIC, comments, “A recent tenant told us – ‘I bought the sofa for £1, it’s really old and tatty, but a great bargain.’ When we pointed out that he would have to take it with him or dispose of it at his own cost when he moved out he was not quite so excited.” But more to the point what the Landlord had done, to circumvent the regulations, was totally illegal and an offence punishable by at least a fine and heaven forbid had there been an injury or fatality that involved the illegal sofa,  a custodial sentence.

We ourselves see time and time again, properties with fire hazards such as gas cylinders and chemicals stored incorrectly by the landlord. There was such a case a few years ago where a discarded cigarette end ignited petrol being stored at the rear of the property fortunately in this case by the tenant. All landlords must ensure that all the soft furnishing, bedding and furniture is fire retardant with the correct labels and that hazardous materials are not stored in the property or garage. The motto must be “If in doubt, throw it out”

AIIC has identified the top 10 most common health and safety issues found in rented properties:

•          Non-compliant furniture, bedding and soft furnishings         

•          Loose sockets and light switches           

•          No smoke alarms or monoxide detectors fitted         

•          Obscured gas meters and electricity mains fuse boxes        

•          Curtain tracks and blinds where screws have been put directly into the wall
              without using rawl plugs

•          Loose/damaged steps, paving outside the property 

•          Loose stair carpet  

•          Poorly maintained decking          

•          Air vents and air bricks covered in rooms especially where there are gas
            appliances

•          Locked windows with no keys supplied

17Jan 2012

Property Landlord advice: Self Management leaves Agents unprotected.

⋅ Leave a Comment

By Steve Roulstone

We have had an interesting experience this week, where a property which was fully managed, has changed to self Management where we only provide the Tenant. The issue here was that the Landlord, having visited the Tenant, was left with the feeling that we had failed to protect them when under full management and had given poor service to the new Tenants because we were no longer instructed to manage.

Tenants advised the Landlord.

The main issue is relating to what the Landlord had been told by the Tenant, which left the Landlord needing confirmation that we had looked after them, no matter what service we were offering. Without repeating the details in full, suffice to say, that by confirming our normal processes, which included signatures confirming the receipt of information and the ability to prove timings through photographic evidence taken at the check in, the Landlord was left understanding that we had done the right thing and carried out our role professionally. The interesting point for me, is that had there not had been other issues, the Landlord may not have had cause to contact us at all and the only result may have been our dis-instruction, without even knowing why!

The bigger picture.

The reason for us being able to prove our case surrounded what had happened with the previous Tenant, as an extension had been built, without the Landlords knowledge at the next door property. The reason the Landlord phoned and mentioned the suggested lack of service to the new Tenants, was to see how this had happened without their knowledge. The answer was really straight forward, the past Tenants had failed to forward mail that was intended for the owners advising them of the neighbours plans and therefore failed to give the Landlord the opportunity to have their feelings taken in too account.

All points covered.

We were able to prove that our agreement included a clause confirming that the Tenant was supposed to forward all mail intended for the Landlord, especially that of an important nature and this is what they failed to do. We were also able to confirm that the agreement banned Tenants from interfering with the supply of services to the property, which was another issue that had been raised. The result of this event, confirms just how important it is to have an agreement whose basis is centred around the protection of the Landlord (and in our case is based upon 30 years of experience) and that ’of the shelf’ agreements have their rightful place – on the shelf!

Consequences.

The serious side is that because of adhering to processes, we were able to confirm our service had been proper and correct and that the Landlord, who of course had gone to self management because there had been no problems over the previous seven years, had received the services that had been paid for. In doing so we were also able to demonstrate that the agreement we use is there to protect the Landlord and clauses do have a purpose.  The Landlord left with the knowledge that they could pursue the previous Tenant for actions that had left them disadvantaged, but this time, because of self Management, the letter would have to be written by themselves, rather than by us!

13Jan 2012

Tenant issues: Notice to leave must be correct.

⋅ Leave a Comment

By Steve Roulstone

One issue which happens again and again is the need for a Tenants notice, to be in line with the rental payment period and time and again, we receive notices which do not reflect the correct timescale. The problem that has arisen in our offices this month, highlights another way in which this occurs and despite the fact that I have written about this before, I feel that there is an additional point here which could help to both clarify and assist in enabling Tenants to get this right.

Last person to hear.

The problem this week, in both cases, was that we ended up being the last person to hear what the Tenant was planning, and it has struck me that the reason is because it is highly likely (confirmed in one of the cases I am referring to) that the Tenant feels that when notice is given, it is not what we wish to hear and will be looked on as bad news. This is of course, not the case. In fact, when available property stocks for marketing are low, exactly the opposite!

Minds at rest.

The issue for the Tenant is to be assured that when they advise us of their intention to leave, it will not be bad news and that by being involved from day one we may be able to assist the timing and circumstances surrounding the move to the benefit of all concerned. Certainly advance notice as far as the Landlord is concerned is always good news and should we be able to allow the existing Tenant to leave early (only of course when a new Tenant is moving in to replace them) nobody is disadvantaged.

Keeping people informed.

The media is quick to jump on any situation where Tenants are ill informed and rightfully so, but if we can re-assure our Tenants from day one that any news, including the desire to move on, is welcome, then perhaps we can save ourselves and all involved the problems that occur when we have to point out that the notice, which normally coincides with the date they have already arranged to move, is not actually in line with the payment dates and (at times) still has a further three weeks to run for which they remain liable!

Communication.

So, not so much Location, Location , location – more Communication – well you can see where I am going. At Stafford we will be introducing notification which tries to assure the Tenants that any news will be treated equally by our office, no matter what and try to encourage them to advise us as soon as they are able when they are considering moving, so at the very least, they understand the existing liability and need to serve notice in the correct manner. But the issue here is not what we say to Tenants, rather what Tenants say to us, because it is they who need to improve their communications and all we can do is encourage them to speak to us.

Point of contact.

How we deal with this, because we have a busy office where any tenant may find themselves speaking with any of our different Agents, is ensure that the person who originally moved them in to the property, deals with them through to and including the Check in and out. Therefore they will be referred to somebody they already know and that, hopefully, makes it easier for Tenants to speak with us!!

12Jan 2012

Current Property News: Mortgage arrears climb as Tenants struggle.

⋅ Leave a Comment

By Mike Edwards

Arrears are set to rise in the buy-to-let market, as more landlords face having to deal with tenants who cannot keep up their rent payments. According to research by Templeton LPA, a specialist practice of LPA Receivers, the number of court orders to evict tenants is up by 11%. In the last quarter, 24,966 tenants faced eviction notices – an increase of 11% on 22,558 a year ago. The number of tenants in severe financial difficulty has also shot up in the last three months, says the firm and during the last quarter of 2011, there were nearly 11,400 more tenants over two months in arrears than in the same period of 2010 – a rise of 18%.             

At the end Q4 2011, nationally there were 78,970 tenants in England and Wales in severe arrears.              

It is clear that a growing minority of renters are falling deeper and deeper into payment difficulties, and the number of severe arrears cases is rising. While the wider tenant mix has changed since the mortgage market downturn – with a greater number of financially sound yet frustrated first-time buyers – a growing number of tenants are seeing their job prospects affected by the UK’s economic malaise. Arrears levels on buy-to-let mortgages have not yet felt the impact of growing severe tenant arrears and evictions, but this would change this year. In the last quarter of 2011, the number of buy-to-let mortgages more than three months in arrears fell by 7% compared to the previous quarter, representing an annual decline of 17%.
However, at 26,300, there are still more than five times as many buy-to-let mortgages in severe arrears compared with Q3 2006.       
 
Mortgage rates have kept monthly payments low, but there has also been a change in landlords’ behaviour. With capital gains falling by the wayside in the past six months on higher loan to value BTL properties as their values fall  rental income has become the most important component in an investor’s annual return – but it also pays a landlord’s mortgage cheque. As a result, many landlords are being less lenient with tenants facing initial payment problems, and are looking to use court orders to replace tenants quickly in expectation of finding a financially sound substitute – and potentially an increased rent. However it is highly likely that mortgage arrears will climb this year and that both overall arrears and severe arrears will rise. This in turn will feed into increased tenant evictions and hamper a growing number of landlords’ ability to meet their monthly mortgage costs.

16Dec 2011

Property Landlord advice: Block Management: Who does the LVT really serve?

⋅ Leave a Comment

By Steve Roulstone

If a Leaseholder of a site managed by an RMC has a complaint about costs and services, the traditional route for that complaint, if the Leaseholder feels the Management Company has failed to address the issues concerned, is the Leasehold Valuation Tribunal (LVT) whose job, as stated in the title, is to ensure that Leaseholders are receiving value for money in both the charges levied, money spent and services provided.

On behalf of the Leaseholder.

Therefore, when a Management Company is the subject of a tribunal bought by a Leaseholder, you would assume that the process is there to protect Leaseholders and ensure they ARE getting value for money and that their interests are being taken care of. Especially for investment Landlords, who have of course utilised property as their chosen route of investment, probably of their pension or main asset to be realised upon retirement. But this has proven not to be the case for a tribunal that has just reached determination by the LVT for all of the leaseholders of the site concerned.

Initial problem.

When the paperwork arrived at our office the first thought that entered our heads was why this action was being bought against the RMC concerned (we received it as the Managing agent of the site in question) and upon investigation, realised that the case the Leaseholder had bought was not only wrong in our opinion, but that it was going to take a lot of time and effort and professional advice to fight it on behalf of the RMC. Indeed specialist knowledge was most important and must be required for nearly every Agent in our position, because such matters whilst not rare are not common occurrences and as the LVT Chairman stated in this instance, rarely reach such complicated levels as was produced by the Leaseholder concerned.

Long story short.

The case itself and the detail surrounding it are not central to my main point here, but midway through the process, having answered in a way that we felt was relevant and confirmed what we believed to be the truth behind the case, we were clearly instructed by the LVT to give more information against every point raised in this complicated claim and in much more detail. This we did, but the outcome was that the amount of time and therefore cost that we were generating to fight the case was rising by the week. Indeed, to put together the response requested by the LVT took a total of 65 hours in one week alone. Add the cost of the professional advice, which required two trips to London by three people on two occasions and the time spent writing, processing and gathering data prior to the week spent compiling the reply and the eventual bill would amount to several thousand pounds. On top of this, the three day tribunal, again for three people just kept the cost mounting up.

To fight or not to fight.

Of course, we could have left the case alone and allowed the tribunal to make a decision based upon what they managed to gather from the Leaseholder alone, but the risk, considering the claim was for over £150,000 was just too great. Then there is the position of the RMC Directors to be considered. I know why such people take up the role of Director and one requirement they should not expect to have is the kind of specialist knowledge needed to fight a case such as ours. An argument of mine during the case was that if all Directors were supposed to be as knowledgeable as the Leaseholder who bought the case against them obviously was, then 90% of the sites in this Country would never attract a Director at all!

To the outcome!

Now here is my point in all this. We won the tribunal on all counts and were given permission to claim full costs through the collection of fees from the whole site. Now the Directors are left having to explain why the Leaseholders will all face an increase of nearly 25% on next year’s Management fee and all because of the actions of one Leaseholder. But if the LVT is duty bound to listen to such cases, then the Management Company must have the ability to claim the cost of fighting the case and their only route is through Management fees as they have no other source of income. So the obvious point is in what way does this outcome protect the interest of the Leaseholders on this site? The answer unless somebody can tell me differently, is that it does not and I know full well, that the costs generated were very reasonable, having pulled in favours and attracted the support of specialists in Block Management for at least one full day for nothing (purely because of the subject matter itself)

Better way.

For me the Management Company should have a better route for recourse and if the LVT can demand such a high level of input from the respondent then they should have more powers in determining where the responsibility of the costs generated should lie. Perhaps if that were the case then those bringing such actions in the first place would take in to consideration the possible implication of their actions before bringing a case, which unless we find out otherwise, will have no more impact on them than the rest of the property owners on the same site!

09Dec 2011

Current Property News: Resolution Foundation Renting in the dark leaves GOOD Agents crying for the law!

⋅ Leave a Comment

By Steve Roulstone

I have now listened and watched the reporting of the new report from the Resolution Foundation about the rental market and have to object once again to the broad brush approach of in this case both the BBC on Radio 4’s ‘You and Yours’ programme and the ITV ‘Daybreak’ news report both from Thursday’s editions. Only this time, because any professional Agent would agree with the main push of the report, that regulation of our Industry is needed, yet again, to many generalisations were made about the problems of heavy Tenant charges being widespread across the whole Industry.

Proper processes.

Firstly, the Lady from the Resolution Foundation complained to Ian Potter (who once again represented ARLA members very well) by saying that very few Agents carry their charges on the Web, well no surprise there, because most Tenants would not understand what the charges were for and whether they apply to them and when, because we cover so many different scenarios, but what we do (Castle Estates) is list all possible charges on a document which we ask Tenants to sign after explaining what charges would apply to them in their individual circumstances. By ensuring they have read and understood them before we ask for a signature, we ensure we comply with ARLA recommendations.

Other issues

There are of course many issues raised by the actual report, but this is not the media to address them individually, but suffice to say, the rent levels quoted raise serious questions as to where the survey was carried out, they totally ignore the Law of Agency and our role (in law) on behalf of the Landlord, that local Government schemes introduce a third party to argue about costs and would further delay the deposit returning process, because actual cash is not involved, the amount required to move cannot include the actual rent, because if a Tenant cannot afford the rent, we cannot accept the Tenant (common sense for me!) and many more, but to get back to the media reporting:

Not all the same!

The second screamingly obvious point that struck me, was there was no clarification of whether the ‘Letting Agents’ contacted or referred to, where Estate Agents who offer a Lettings service ( because as I have stated so many times they can no longer afford to ignore our market having grown so significantly during the house price drop) or stand alone Letting Agents and I think this is a clarification which needs to be addressed, because the only true judge of our industry is to look at Letting Agents alone. The rate at which Estate Agents have turned to the rental market clearly dictates that the level of service for both Landlords and Tenants will have dropped. By judging the performance of both side by side, professional Letting Agents and ARLA members especially, will I am sure shine!

Government now damaging the whole!

Another implication for me is the harm that is done to all Letting Agents by such news reporting, which, whilst I do not question the content, is done in the normal dramatis style (especially by ITV) so as to catch the viewers attention.  The issue being because the Government continually states that it does not have the stomach to address the legislation required to regulate the industry, when publications and comments from respected bodies are released in this way, the whole industry suffers from the subsequent fallout and bad press.

PLEASE regulate our Industry.

If only the necessary regulations and licensing were introduced, bad practises from Agents, overcharging from Agents (which from my own experience is normally the realm of the Estate Agent who are used to generating large fees) and rouge Landlords who rent property in poor conditions would ALL be addressed. Once again you get the same tune from me – it is a pity the Government cannot change their tune!

Professional representation.

 Ian potter (ARLA secretary) quite rightly said that we were nearly their under the last administration and this one has stated there are more important matters to address. Well for me as each report and complaint is made and heard our case grows stronger because every report always requires the same solution and as we approach 20% of the UK housing stock under the banner of the private rental sector, the only remaining question is how long before it becomes important enough for the Government to take the right action.

 

02Dec 2011

Current Property News: TDP Changes in Localism Bill for next year.

⋅ Leave a Comment

By Mike Edwards

From next year, agents and landlords will have 30 days in which to protect a tenant’s deposit, rather than the current 14.The change is part of ‘tweaks’ made to tenancy deposit protection in the new Localism Act 2011. These were made following court cases over the rights of a tenant to sue for a breach of the deposit protection legislation or when deposit money was not protected within 14 days, but by the time of a court hearing.   
 
The revised legislation also does away with mandatory penalties of three times the deposit if the deposit is not correctly registered and the ‘prescribed information’ not properly given.  Instead, courts will be allowed to use their discretion to hand out penalties worth between one and three times the value of an unprotected deposit. The current legislation has had a number of challenges within the courts, which have issued varying rulings – some in favour of tenants and others in favour of landlords.              

The Housing Minister Grant Shapps managed to find the parliamentary time to get these amendments to the legislation through deemed necessary because recent Court decisions were causing confusion about tenancy deposit protection regulations. Some of these decisions drove a cart and horses through the provisions especially in respect of the three month mandatory fine provisions and effectively made the provisions toothless and ineffective as a Landlord could delay protecting the deposit right up until the moment the tenant instituted Court proceedings.

However these amendments make it very clear that tenancy deposit protection is here to stay. Full details of the changes are available in new guidance notes issued by the Tenancy Deposit Scheme which can be seen on this link.  Commencement Order has yet to be published and the start date for these new rules is not yet known, but it will probably be April 2012 at the latest and possibly much sooner.