Tenants Deposit

[solediva]

I am in a panic! I created an AST agreement back in January 2006 when the tenants deposit scheme was not in place and therefore I have the deposit in my bank account. In January 2009 I issued the tenants with a Memorandum Supplemental to the AST extending their lease for another year.. I have not renewed this as I consider it to now be a periodic tenancy. As this Memorandum was issued after the scheme came into place am I in breach as I have not put the deposit into the Scheme.

I read this on an earlier thread .....

"

What happens if the tenant has a tenancy agreement that was taken out before 6 April 2007 but continues occupying the property after the end of that tenancy?

If the tenant decides to remain in an existing rented property beyond the initial fixed term of 6 months, how the deposit is treated will depend on how the tenancy is continued:

* For a periodic tenancy - i.e. the tenancy continues with no new agreement - TDP will not apply, as no new AST will have been created

* For a replacement/renewal tenancy (which can be notified either in writing by the landlord or via a memorandum of extension) between the same landlord, tenant and property and where there is no change to the amount of the deposit held; tenancy deposit protection will not apply to an initial deposit taken prior to 6 April "

However I have since spoken to a the Landlord Action Group and based on what I have told them they are saying that I am in breach of the law and need to get the deposit in the Scheme.

Can anyone help to clarify this.

Many thanks

[Trenners]

Hi Solediva,

Firstly - no need to panic!

As the initial tenancy was created before April 2007 then there was no need to protect the initial deposit. However, as you extended the tenancy in January 2009 - it could be argued that you created a new tenancy and, as such, you should have protected the deposit at this time.

A counter argument could be that you did not create a new tenancy, but simply extended an existing one, in 2009 so there is no need to protect the deposit.

This is why I think you are getting conflicting advice ... because the circumstances are not clear cut. Was it a new tenancy in 2009 (in which case you should have protected the deposit) or was it an extension of the original tenancy (in which case you did not need to protect it).

What would I do now? I would err on the side of caution and protect the deposit NOW. Recent case law has confirmed that the landlord has not broken the law (by not protecting the tenant's deposit) as long as the deposit is protected before any court action commences (against the landlord by the tenant).

So - protect the deposit now to be on the safe side of the law .....

Good luck

Mark

[SPEEDTWIN]

I would say a new tenancy has been granted and suspect a number a judges would look at it that way also, so as Trenners says to be on the safe side protect it now and there will be no come back from the tenant.