Goldsmith Williams is urging all landlords to comply with the government’s tenancy deposit protection law and ring fence deposits in an official protection scheme.
The property lawyer made the call following the recent publication of Shelter’s survey of 4,000 tenants which revealed that almost one in ten tenants knew their deposit was not in an official scheme.
Eddie Goldsmith, senior partner at Goldsmith Williams, said: “We know that the majority of landlords do follow legal guidelines when dealing with tenant’s deposits.
“More stringent requirements were introduced on 6th April 2012 and require the landlord to protect the tenant’s deposit and supply the tenant with prescribed information within a 30 day deadline.
“These rules are designed to ensure that the tenant’s deposit is safe, even if their landlord goes out of business.
“It also gives the tenant protection should they have a dispute with their landlord when they move out of the property and – for example – there is some damage to the property as the landlord would not just be able to keep the deposit to cover repairs.
“Most landlords that we work with are aware of these requirements and are already following them as they afford the landlord some protection too.”
Should the relationship between a tenant and landlord sour the only way for a landlord to evict a tenant is to serve the tenant a Section 21 Notice to quit.
However Goldsmith points out that non compliance with deposit rules means that some landlords are placing themselves at risk.
He said: “Section 21 Notices are invalid if they are served on a tenant where the deposit has not been protected and/or the prescribed information has not been supplied to the tenant.
“If the landlord hasn’t complied with the 30 day deadline then the landlord would need to return the deposit prior to the service of a Section 21 Notice.
“If the deposit is not protected and/or the prescribed information not given then the tenant will be able to bring a claim against the landlord in the County Court, immediately after the end of the 30 day period. The landlord (and/or agent) will not have any defence to this.
“The court will order either the return of the deposit or for it to be protected within a protection scheme and a penalty which will not be less than the deposit sum and not more than three times the deposit sum, the precise amount to be decided by the Judge.
“So, complying with the rules of Tenancy Protection will negate any potential liability in respect of claims by the tenant for failure to protect the deposit.
“Therefore, my call to the minority is to abide by this legislation – it’s in your own interests to do so!”