On October 1st, 2010 new Government legislation involving the protection of a tenant’s deposit by their private landlord came into force.
Previously, tenancy deposit legislation only covered Assured Shorthold Tenancies up to £25,000 but, since 1st October, this was increased to £100,000, a move applauded by the industry due to it’s increased fairness.
It isn’t necessarily so that those paying a higher value rent of more than £25,000 are professionals and financially successful. In fact, many of these property rentals can be students or lower earning professionals in a large house share meaning that these more financially vulnerable tenants had no protection.
Kevin Firth, Director of The DPS, said: “Students, for example, often group up and move into large houses, paying a combined rent that easily exceeds £25,000 annually. People working hard to get through university should be afforded the same protection as young professionals or families renting a smaller house.
“The government move to expand the deposit protection scheme is the right thing to do”.
There has been some confusion as to whether these changes will be retrospective. As it stands, the landlord tenancy deposit protection will not be retrospective, meaning only renewals or new deposits registered on or after 1st October will need deposit protection.
At the same time, there is always the chance of retrospective changes resulting from legal analysis and therefore, the DPS landlord advice is to be prepared to protect their tenants’ deposits anyway, just in case.