It is now the best part of a decade since the tenancy deposit protection provisions in the Housing Act 2004 (the “Act”) came into force on 6 April 2007. A string of Court of Appeal decisions resulted from ambiguities and inconsistencies in the Act and later regulations (the Housing (Tenancy Deposits) (Prescribed Information) Order 2007). 

As part of the Deregulation Bill, Parliament are seeking to amend the existing legislation to clarify the law. The key practical point for landlords is the clarification of the rules as they apply to tenancy deposits received prior to 6 April 2007 which are still held by the landlord or agent under tenancies which have continued or been renewed informally.

As a general principle, all tenancy deposits must be protected. This now expressly includes deposits under tenancies that came into being before 6 April 2007 but have since been allowed to “roll over” as statutory periodic tenancies. “Protecting” a deposit means either insuring it or paying it into a custodial scheme and serving the prescribed information on the tenant within the statutory time frame.

The original time frame for service of the prescribed information on the tenant in relation to fixed terms starting after 6 April 2007 was 14 days, later extended to 30 days from receipt of the deposit. However, the existing legislation left it unclear if and when deposits should be protected in relation to pre-6 April 2007 “roll over” tenancies.

 The amended legislation makes it clear that “roll over” deposits must be protected, but also gives landlords a window of 90 days from the date of commencement of the Deregulation Act 2015 in which to protect these deposits. Bearing in mind the that one of the penalties for failure to properly protect a tenancy deposit is the inability to serve the notice to end the periodic tenancy itself as well as financial penalties, landlords would be well advised to take advantage of this window of opportunity.