Since 2004 landlords have been supposed to pay tenant’s deposits into an authorised deposit scheme. However Courts have virtually nullified these provisions by deciding that if the deposit is paid at any time before a tenant‘ s application reaches the Court, no penalty should be imposed on the landlord.
Now sections of the Localism Act 2011 have rectified the situation and will reverse the case law. The landlord now has up to 30 days to pay the deposit into an authorised scheme. If he does not do so, or does not give proper notice to the tenant that he has done so, the tenant can apply to the Court which will order the landlord to do what is necessary and will also order the landlord to pay to the tenant a sum between the value of the deposit or no more than three times the deposit as a penalty. The bar on the landlord issuing Notice to Quit is lifted when the landlord has complied with his obligations.
These provisions will be brought into force on a date to be appointed by the Government.