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Buy to let landlords have until June 23 to place deposits into a government approved deposit scheme or face having to pay a costly £3,600 fine.
Government Amnesty for Landlords
There is currently a 90-day amnesty in place for buy to let property investors who haven’t protected tenants’ deposits.
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Official figures indicate this could apply to more than half a million landlords, many of who may have long-term tenants and are probably unaware of the changes to legislation in 2007.
According to Emma Humphreys from 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. 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.”
Section 21 Notice Invalid
All landlords in England and Wales are obliged to protect a tenant’s deposits (Scottish landlords are exempt). Landlords who don’t protect a deposit face being fined up to three times the cost of the initial deposit – which could be quite a lot given the average deposit these days is £1,200. The other consideration, aside from the cost of the penalties, is that landlords who don’t protect deposits won’t be able to evict a tenant if a dispute arises.
Most assured short hold tenancies are affected by the legislation; exceptions include student lets and lodgers.
