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I am a landlord and my tenant has asked who his deposit is being held with. I had not heard of the new deposit scheme, can I pay his deposit into a scheme retrospectively?
I am a small time residential landlord, I do not use letting agents to find tenants but have always found them privately. I have a tenant who is due to end his tenancy in June 2008. He called me this week and asked me who his deposit was being held with. I said that I did not know what he was talking about and that I was holding it. He then explained the new deposit scheme to me which was the first I had heard about it. He told me I was breaking the law and that I would have to pay him three times the deposit. I have since looked into this and found this to be correct. Not having been aware of this law, can I retrospectively pay his deposit into a scheme before his tenancy finishes to avoid getting into trouble if he decides to report me?
You can pay the deposit in retrospectively, which may enable you to use the accelerated possession procedure should you wish to evict the tenant, which you would have been unable to do otherwise. Paying the depoist in retrospectively however does not avoid the fact that you did not follow the scheme rules and you would still be liable for the three times deposit award if sued. If the deposit was taken before April 2007 however, the new rules would not apply to you.
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