Landlords with long-standing tenancies risk a fine of up to £3,600 if their tenant’s deposits are not registered by 23 June.
The Government’s 90-day amnesty, which began on 26 March under the new Deregulation Act, allows time for buy-to-let investors who haven’t put their tenant’s deposit into an officially-backed scheme to do so. Failure to do this will result in a penalty to the tune of three times the initial deposit, with the average deposit paid by tenants taken to be £1,200.
It is suspected that there are thousands of such landlords, with some estimates suggesting that a third of the UK’s 1.6 million private landlords are not part of any of the available deposit protection schemes.
Although deposit protection was set up as a compulsory scheme in April 2007 to mediate disputes at the end of a tenancy, it was for a long time uncertain whether or not it would apply to already-existing tenancies. It was established that it did following the Marino Rodrigues case in 2013, in which it was ruled that the tenant, who moved into a property a few months before the law was introduced, could not be told to leave at the end of the tenancy because his deposit wasn’t registered.
This could potentially present a more serious problem than the fine itself, as landlords will need to register the deposit in order to legally regain possession of a property.