The Tenancy Deposit Scheme for Landlords is to change its system in April so that landlords will no longer have to update tenancy deposit information when a tenant stays on.
For landlords (this does not apply to agents), the change is that after April 1, the TDS will assume a tenancy is still running until told otherwise. Until April 1, landlords will have to continue to tick a box.
Currently, the scheme requires landlords to update the records when a tenancy becomes a statutory periodic tenancy.
The requirement applies only to landlords who use the TDS landlords’ scheme, and does not apply to letting agents or to landlords of TDS member agents.
The Tenancy Deposit Scheme for Landlords (or ‘DepositGuard’ for members who join via the Residential Landlords Association) was launched in January last year for landlords wishing to protect their tenancy deposits direct.
A TDS spokesman said: “With this newer membership, if the fixed term tenancy agreement ends and continues on a statutory periodic basis, members should update the TDS database to reflect this and for protection to continue.
“This is a very simple online ‘tick box’ procedure and the landlord receives up to four notifications from two months in advance of the end of the fixed term that they should do this. If deposit protection ends, both the landlord and tenant are notified.
“Although we have received consistently positive feedback on the usability of the Tenancy Deposit Scheme for Landlords (backed up by survey data), and have no evidence to suggest landlord members are failing to update tenancy information correctly, from April we are simplifying the IT system so that fixed term tenancies will automatically become statutory periodic on our database when they end.
“This is to reduce the administration for landlords and to remove any risk of them forgetting to update the database.
“As with any updates to the scheme which affect our members, all members of the Tenancy Deposit Scheme for Landlords will be duly informed once the updated procedure is finalised.”
Another difference between the TDS's schemes for agents and landlords is that agents pay an annual subscription to the TDS, whereas agents pay per tenancy.
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Comments
Now this is interesting as in the 5th paragraph TDS is finally admitting (on behalf of all schemes I would suggest) that a periodic is a new tenancy, and that the deposit needs to be re-protected even if it is the same money and all that is needed is a few boxes ticking, dates changing etc.
But here TDS is also confirming that new Prescribed Information must also be served, which some of us have been arguing ever since LA2011 meant no escape was possible if this was not done and an offence was deemed to have been committed.
Now we need to take this on a stage
TDS can have or omit whatever it likes in its rules as long as they comply with Statute and deliver at least what Statute demands of those rules. Sadly for some obscure reason some schemes seem to think they need to go further and thus make life even more complicated for their members, but that is another debate for another day.
The point here is that this requirement to re-protect the money and re-issue the PI also exists on ALL periodic deposits.
Why would it not be so and only apply to one category of membership with separate rules - just because TDS says so?
As ever what matters is the LAW.
If a periodic is a new tenancy AT LAW (s5 Housing Act 1988) then all such deposits need re-protecting, not just those held by a particular class of member, as they are all governed in what they must do in terms of protection by the LAW and not just what any Scheme says - the Scheme Rules are as much about techique as the legal requirements.
They are additional but subsidiary to the Statute - what matters is THE LAW
Sadly as usual TDS has simply caused more confusion with this attempted clarification. The third last paragraph makes it sound as though the new post April system will take this risk away from the landlord.
That will only happen if the LL does nothing porovided TDS has issued the PI for them, which patently is not going to happen.
Unless and until there is specific Case Law the only way to be 100% safe is to re-protect the money and re-issue the PI. In effect TDS have confirmed this for Deposit Guard members, they simply have not done so for agent members, and should do so without delay.