New tenancy deposit rules become law in Northern Ireland
A tenancy deposit is a sum of money which a landlord may ask a tenant to pay at the start of a tenancy. Up until 31 March 2013 the landlord held the money as security against the tenant not meeting their obligations in connection with a tenancy agreement. The tenancy agreement should set out the circumstances in which the deposit may be withheld by the landlord at the end of the tenancy.
From the 1 April 2013 the landlord must, by law, protect any deposit taken in connection with a private tenancy in an approved tenancy deposit scheme. These rules have been introduced by the Tenancy Deposit Schemes Regulations 2012. Essentially an independent scheme is approved by the Department for Social Development and the Landlord pays the deposit to that independent scheme after they receive it from their tenant.
So why is The Tenancy Deposit Schemes Legislation being introduced?
There are many benefits to both the landlord and the tenant with the introduction of the tenancy deposit schemes legislation such as:
1. Tenancy deposits will be protected by an independent third party. This will prevent deposit from being unfairly withheld by landlords or letting agents at the end of the tenancy.
2. Quick repayment of deposits. Where a landlord and tenant agree about the return of the deposit the deposit must be returned within 5 working days.
3. Free access to an independent dispute resolution service. Every approved scheme will provide a free service to resolve disagreements over the return of deposits as an alternative to taking legal action through the courts.
4. Provision of information. Landlords must give the tenant key information about the tenancy, the deposit and the scheme that safeguards the deposit. Schemes will also provide information about the protection of deposits and their services to tenants and landlords.
5. Sanctions for non compliance. A tenant can report a landlord to the local council if they fail to submit deposits to an approved scheme and/or provide information to the tenant within the specified time limits. Councils will have the power to issue fixed penalties in these cases up to £20,000.00
6. Improved professionalism of the private rented sector. The introduction of tenancy deposit schemes will raise standards in relation to management of deposits.
If you are a landlord or a tenant and would like some advice about how these new provisions impact you just call Property lawyer NI on 028 2502 2126 or send us an email to email@example.com and we will contact you.