deposit not protected

My landlord didn’t protect my deposit within 30 days.

Most tenants know that if they pay a deposit, by law, it needs to be protected – which means it has to be placed in one of the 3 Government approved deposit protection schemes. The law has been around for well over a decade, but despite that nearly £515 million pounds worth of tenancy deposits remain unprotected! This is a staggering amount, especially considering the risk of fines to landlords of up to 3x the deposit, however, failing to protect the deposit isn’t the only thing that can get a landlord in trouble. Did you know that landlords have 30 days to protect the deposit, else they risk the same fine?

What the law says:

The part we are interested in is section 213 of the 2004 housing act “Where a landlord receives a tenancy deposit in connection with a shorthold tenancy, the initial requirements of an authorised scheme must be complied with by the landlord in relation to the deposit within the period of [F1 30 ] days beginning with the date on which it is received.”

What does that mean?

The landlord has 30 days from the day you hand over that deposit to get it registered with a scheme, easy right! But if the deposit has been protected, why does it matter? Surely it’s not fair to punish a landlord for being late to follow the tenancy deposit law?

When the legislation was initially drafted no provision was included to compensate tenants for what we will now call late protection (that is any tenancy deposit protected 31 days or later after it was paid). As there was no penalty for protecting the tenancy deposit late, landlords simply didn’t protect the money until they had to, and this took two forms;

  1. When the landlord wanted to serve an eviction notice. The law will not allow a valid section 21 to be served whilst the deposit is not protected.
  2. When the tenant tried to take the landlord to court for not protecting the deposit. Then guess what they would just pop it in at this stage!

These two loopholes essentially made the law redundant, therefore the solution was simple = a fine for late protection. The Localism Act 2011 changed all of this, a time limit of 30 days was now set & any breach of this time limit could now meet the same penalty as a deposit not protected.

How do I know when my deposit was protected?

This is actually pretty simple. When your deposit is protected you should get a copy of your deposit certificate directly from the scheme. The certificate will give you all the information you need including the date the deposit was paid & the date the deposit was protected. If the dates are further than 30 days apart the chances are you will have a case.

But why would a landlord protect your tenancy deposit late? Surely if they are not going to protect the deposit they would try to cover their tracks, not just give me proof that I have a case?

  1. In order to serve a section 21 notice – the law still prevents any landlord from serving a section 21 while the deposit is unprotected. So, if you suddenly find yourself getting contacted by a deposit protection scheme about your deposit at the same time as you get a notice, chances are your landlord has realised what they need to do to try & get you out.
  2. The landlord has had a new agency take over – sometimes a new agent will take over management of the property & move quickly to rectify any legal errors. This is mainly to cover themselves because if the deposit stays unprotected while they are managing the property they potentially open themselves up to legal action.
  3. They have only just realised – It’s a poor defence. The laws have been around, even in amended form for a decade now & a quick search on Google would teach any landlord what to do with the deposit. Some landlords though still claim simply not to know, upon finding out they might panic & register the deposit.

It is worth noting that a court is likely to award less for deposit late protection, in most cases because it shows some degree of an attempt to comply with the law. It also prevents further breaches from mounting up compared to a deposit that stays unprotected the whole time.

If you suspect that either your deposit is not protected, or your deposit was protected late, get in touch with one of our team.

We can do free checks for you to confirm if you do have a case & what your deposit claim could be worth, as well as talking you through the process.