Tenancy deposit protection
The requirement on landlords (and their agents) to protect tenancy deposits is mandatory across the UK, although the detailed provisions vary in the respective countries of the UK.
This section reviews the legislative requirements in England and Wales, Scotland and Northern Ireland, as there are some significant differences in relation to:
- when deposits need to be protected
- what tenancies are covered by the legislation
- what information needs to be provided by landlords
- how quickly deposits must be protected
- the types of scheme (insurance-backed or custodial) that apply and
- the enforcement provisions that are available in the event of non-compliance.
The legislation in this area (in particular in England and Wales) has been subject to a number of challenges in the courts and, as a result, the legislation has been amended a number of times. Following the UK general election 2019, the Queen’s Speech confirmed that a Renter’s Reform Bill will be introduced, proposing changes to the current rental sector, including the introduction of a new ‘lifetime deposit’ for tenants in England.
In Northern Ireland, the Department for Communities had reviewed the operation of the regulations; however, this was put on hold until the reestablishment of the Assembly. With the reestablishment of the Assembly and Executive in effect since the restoration of the power-sharing agreement, it may be that this is revisited in 2021. In Wales, the Renting Homes (Wales) Act 2016 enables the Welsh government in due course to introduce its own version of tenancy deposit protection. The Renting Homes (Fees Etc.) (Wales) Act 2019, banning landlords and agents from charging fees to tenants, came into effect on 1 September 2019 in Wales.