Landlord insurance clients should take a look at changes to the deposit protection rules introduced by the Localism Act. It has been the law for some years that the tenant’s deposit must be protected but there has been some uncertainty about the way the scheme operated and this has led to recent court cases.
The new rules will allow the landlord 30 days to protect the deposit and issue the “prescribed information” to the tenant about the way the deposit will be handled. If the landlord fails to comply he risks an award against him of up to three times the value of the deposit. Another penalty for the landlord is that he will not be able to rely on a S21 notice if he is in breach of the time limits- unless the deposit is returned in full.