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Landlords with long-standing tenants could face a £3,600 fine if they don’t register deposits this summer.
A 90-day amnesty is being run by the Government to allow buy-to-let investors in England and Wales to place their tenants’ deposits into an official scheme.
Penalties for failing to do so will be unlimited and calculated at three times the initial deposit. With the average deposit in the UK coming in at around £1,200, it means potential fines of £3,600 could be enforced.
It is thought that up to one in three of the 1.5 million private landlords in England and Wales are currently not registered with a deposit protection service, despite legislation enforced in 2007.
Hefty penalties aside, landlords who fail to register will also be left powerless if they want a tenant to move out at the end of their contract, because in the event of a dispute the landlord will be seen to have failed their obligations.
Landlords with an ‘assured short hold tenancy’ agreement have 30 days from receiving the deposit to register it with one of the three government backed schemes:
- Deposit Protection Service
- My Deposits
- Tenancy Deposit Scheme
Other schemes exist for buy to let landlords in Scotland and Northern Ireland.
Landlords who have longstanding tenants, where the agreement keeps rolling over, are those most likely to be caught out, says Emma Humphreys, of solicitors Charles Russell Speechly.
“These landlords may not use a letting agent, which would notify them of the need to register deposits, and may not have been keeping an eye out for the regulations when they were introduced in 2007,” she said.
“Of course, there is no excuse for new landlords not complying with the law. But many long-term buy-to-lets where the tenant and landlord have a good relationship may not realise they need to register with a scheme.”
“Such landlords may be unaware that they need to register deposits and may not even have taken a deposit in the first place.”
For further information on how to register tenancy deposits, please go to:
