All change for section 21 Notices ... definitely

In my article "All change for section 21 Notices...probably", I discussed the changes to the Section 21 regime that would come about if and when the the Deregulation Bill came into force.  The Bill received Royal Assent on 26th March and the provisions affecting Section 21 notices came into force on 6 April 2015.

I set out the main changes to the section 21 regime in my previous article and therefore do not intend to repeat them here. I do, however, highlight one important issue, that being the 90 day grace period provided by the Deregulation Act 2015 within which Landlords must either secure the deposit and provide the Tenant with the prescribed information, or return the deposit. If they fail to do so, depending on the circumstances of the AST, they risk financial sanctions.

Where a Landlord has taken a tenancy deposit relating to an Assured Shorthold Tenancy that became a periodic tenancy before 7 April 2007, a Landlord must now protect the deposit and provide the full prescribed information as required by the TDS provisions of the Housing Act 2014 or alternatively return the full deposit. Under the Deregulation Act 2015, Landlords have been given 90 days from the date the Act came into force - so by 23 June 2015 - to take these steps, failing which a Landlord risks fouling foul of the TDS provisions of the Housing Act 2004 and being unable to serve and rely upon a Section 21 Notice.  However, the Act confirms that there will be no financial penalty imposed on any Landlord that fails to protect the deposit.

The same cannot be said where a Landlord has taken a tenancy deposit relating to a Assured Shorthold Tenancy where the fixed term started before 7 April 2007 but expired and the tenancy became a periodic tenancy after 7 April 2007. Whilst a Landlord is still required to protect the deposit and provide the full prescribed information or alternatively return the deposit by 23 June 2015 as explained above, in these circumstances if a Landlord does neither, he/she will be liable for the financial sanctions set out in the TDS provisions of the Housing Act 2004.

Posted on: 08/04/2015

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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