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Landlords beware! Section 21 notices and the impact of the tenancy deposit scheme
The Housing Act 2004 introduced tenancy deposit protection for all assured tenancies (ASTs) in England and Wales where a deposit is taken. Landlords who receive a deposit from tenants must place the tenant’s deposit in a tenancy deposit protection scheme if the assured shorthold tenancy started after the 6th April 2007.
Aside from the fact that this is a statutory requirement imposed on landlords, there is now an added incentive for landlords to make sure tenant’s deposits are protected in line with legislation. If a Landlord wants to serve a valid section 21 notice, (that is a notice set out under section 21 of the Housing Act 1988 which is served by the landlord on a tenant to regain possession of a property at the end of an assured shorthold tenancy), then he/she must ensure that the deposit has been validly protected. Alternatively, the landlord must first return the deposit before serving the section 21 notice. A recent Court of Appeal ruling has clarified this position (Charalambous 2014) and will inevitably impact upon what has become the common practice of serving section 21 notices at the outset of tenancy agreements
From 6th April 2012, deposits for all ASTs in England and Wales must now be protected within 30 calendar days of receipt by the landlord, and therefore if the deposit is protected after service of the section 21 notice albeit within the 30 days allowed by statute, then the section 21 notice will be invalid.
At Parkes Wilshire Johnson, we have expertise in assured shorthold matters and deposit protection matters for residential tenancy agreements and can advise both landlords and tenants.