Landlords beware. If you want to secure possession of your property by serving a section 21 notice but delayed in protecting your tenant’s deposit, you need to read this.
andlords beware. If you want to secure possession of your property by serving a section 21 notice but delayed in protecting your tenant’s deposit, you need to read this.
Landlords will be well aware of the use of a section 21 notice. The notice is regularly used to gain possession of a property that has been let under an assured shorthold tenancy or statutory periodic tenancy agreement.
Understandably the last thing a landlord wants to do is return the deposit to the tenant if there has been a delay in protecting it, especially if there are arrears. Instead, they would rather protect the deposit albeit late.
Previously, provided the deposit was protected prior to the service of a section 21 (even the day before), even if the deposit was protected after 14 days, then, the section 21 notice was considered to be validly served.
To re-cap, where a landlord receives a tenancy deposit in connection with a shorthold tenancy, the initial requirements of an authorised scheme must be complied with by the landlord in relation to the deposit within the period of 30 days beginning with the date on which it is received.
The big change in the legal position is that the prohibition on serving a section 21 notice now specifically refers the landlord to the 30 day requirement. So, once 30 days is up, that is unfortunately that.
Notably, the prohibition on serving the section 21 notice does not apply where the deposit has been returned to the tenant in full or with such deductions as are agreed between the landlord and tenant (which in practice is unlikely given the stage of the tenancy we are discussing here).
… But the fun doesn’t stop there for landlords. Not only will landlords, in all likelihood, be required to return the deposit in full, a recent Court case demonstrates that special care needs to be had when the section 21 notice is resultantly served post release of the deposit.
A section 21 notice has been found to be invalid where the deposit was “released” to the tenant (by order of the landlord), but the landlord served the section 21 notice instantaneously. The safest course of action would be to wait a few days so that the return of the deposit is in effect, “served”, much in the same way as a notice.
If you have any questions please do not hesitate to contact us.
