Landlords face unlimited fine if they fail to register tenant deposits
Fines for non-conformers will be calculated at three times a tenant’s initial deposit and, with the average deposit amount standing at £1,200, landlords that do not register in time could face an average fine of £3,600.
Approximately one in three of England and Wales’s 1.5 million private landlords are thought to have avoided registering with a suitable deposit protection service, even though legislation to enforce the requirement was implemented in 2007.
Due to the fact that many landlords have failed to comply with the rules, the Government is running an amnesty for 90 days, to allow landlords to put their tenants’ deposits into an official scheme.
Landlords with an assured short hold tenancy agreement must register with one of three Government-backed schemes if they wish to avoid a financial penalty, and if they want a tenant to leave – following any potential dispute – at the end of their contract.
If a tenancy dispute arises then a landlord will be considered to have failed in fulfilling their legal obligations if they are not registered to a deposit protection scheme, giving the tenant a stronger legal position.
Deposit protection schemes became compulsory eight years ago, to allow for any potential disputes at the end of a tenancy to be resolved as fairly as possible.
The new amnesty started on 26th March, under the new Deregulation Act.