What Are The Benefits Of An Assured Shorthold Tenancy?
Posted on 19th May 2020
Assured Shorthold Tenancy Agreements provide both certainty in rent and possession for Tenants, but also provide Landlords with a right to repossess the premises without cause after an initial six-month period.
As any Property Law Solicitor will advise, where there are Assured Shorthold Tenancies or lettings to individuals with annual rent of less that £100,000, the residential Landlords must hold the deposit in a statutory tenancy deposit scheme. This applies to any agreements entered into on or after the 6th April 2007.
There are two types of tenancy deposit schemes: either custodial or insurance-based schemes. After the Tenant provides the Landlord with their deposit, the Landlord must within 14 days, comply with the requirements of the scheme and provide the information to the Tenant.
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What should you do if the Landlord does not comply?
In instances where the Landlord does not comply the Tenant can apply to the County Court. The Court has two options; it can either demand that the deposit is repaid to the Tenant or that the Landlord pays it into a scheme within 14 days.
Where the Landlord does not comply the Court has discretion to order that the Landlord pays a fine equal to three times the deposit amount which has to be paid within 14 days of the Court Order and the Landlord is prevented from obtaining a Court Order to remove the tenants from the property.
Where information of the Tenancy Deposit Scheme has not been provided previous case law has shown us (Suurpere v Nice [July 2011]) that a Landlord cannot rely on the Scheme Provider to supply the information and that the Landlord must supply the information itself even where the deposit has been repaid to the Tenant before a hearing date, the Landlord could still be liable to a fine if the information has not been provided to the Tenant before a hearing.
The Localism Act 2011 seeks to tighten up legislation in order to provide that:
- The Landlord will not avoid being ordered to pay a fine by complying with the initial requirements and giving the prescribed information by the hearing date
- Where a tenancy is at an end the Court still has the power to order a fine
- Landlords will have 30 rather than 14 days to comply with the initial requirements and provide the prescribed information
- The fine will not automatically be three times the deposit amount and the Court will have discretion to award a fine from one to three times the deposit.
- Where there has been non-compliance, the landlord will be able to regain possession using “notice only grounds” in a Section 21 Notice if the deposit has been refunded to the tenant in full.
The Legislation and the findings of recent cases clearly show that the Courts continue to take a dim view of the non-compliance with the tenancy deposit requirements.
If you need expert assistance arranging a Lease or the purchase of a buy to let, contact MG Legal Property Solicitors via property@mglegal.co.uk or by calling 01995 602 129.
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