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Housing Act 2004 and deposits |
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Friday, 02 June 2006 |
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The Housing Act 2004 provides that landlords will no longer be able to take a deposit unless it is safeguarded by a scheme. Landlords will need to decide whether or not they wish to accept deposits under the new regime due to be introduced in 2007.
Under the new scheme, landlords will be required to tell their tenant which scheme their deposit is held under and the responsible tenant should double-check this with the scheme itself. Where a landlord is found to have lied to the tenant, they will be prevented from evicting them until the money is held in accordance with an authorised scheme, or the deposit is returned. If the deposit is not held in accordance with an authorised scheme or the tenant has not received the prescribed information, the tenant can apply directly for an order for the landlord to repay the deposit or pay it into a custodial scheme. If the landlord has failed to comply with these provisions by the date of the court hearing, the court must order the landlord to pay the applicant an amount equivalent to three times the deposit within 10 days. This new legislation is intended to act as a disincentive for dishonest landlords to attempt to cheat the new system but many landlords believe that it will simply add to the costs incurred by the tenant when renting property privately.
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