AIIC: “New deposit protection rules are a step in the right direction”

23 June 2015 3846 Views

The Association of Independent Inventory Clerks (AIIC) is pledging its support for new deposit protection rules coming into force this week.

Under the Deregulation Act, tenancy deposits taken before April 6 2007 now fall under deposit protection law.

Landlords have until 23 June to register these deposits with one of three government-approved tenancy deposit protection schemes: my|deposits, The Deposit Protection Service and The Tenancy Deposit Scheme.

Any landlords who are holding unprotected deposits after this date could face a penalty of between one and three times the value of the deposit and restrictions on regaining possession of their property.

Tenancy deposit protection was introduced in 2007 as part of the Housing Act 2004 in order to offer a more robust mechanism for mediating disputes at the end of tenancies.

In the run up to the introduction of the new legislation, landlords and letting agents have been warned by all three protection schemes to make sure their administration is in order.

One of the schemes, my|deposits, estimates that over 300,000 existing tenancies across the UK will be affected by the new rules.

The organisation also reported that 48% of landlords struggle to keep up with changes in legislation which, it says, could exacerbate the issue and put landlords at risk of being fined.

Pat Barber, chair of the AIIC, said: “This legislation is another positive step towards raising standards in the professional lettings sector and here at the AIIC we are pleased to see it coming into force this week.

“my|deposits’ figure that almost half of landlords struggle to keep up with changes in legislation comes as no surprise to us and it is important for all agents and landlords to work together to ensure that all required deposits are now protected.

“Since it became mandatory in 2007, deposit protection has been a huge success for the industry. And now, as the number of tenancies continues to grow and the amount of money being taken in deposits continues to increase, it remains a vital component of the modern rental process.”