Owners of buy-to-let properties in the UK are obliged to register their tenants’ deposits in one of three official protection scheme for all ‘assured shorthold tenancies’.
The Government in March started a 90-day amnesty for owners who have failed to do this. Investors have until 23 June to do this or face high fines.
Fines are unlimited and calculated at three times the amount of the initial deposit.
It is estimated that of the 1.5 million private landlords in England and Wales, as many as half a million have not registered with a deposit protection service.
Legislation obliging this came into effect in 2007 and includes tenants who had moved in before this date, although landlords in Scotland and Northern Ireland have separate schemes and are not included.
Any landlord with an "assured short hold tenancy" agreement must register with one of three Government-backed schemes, although some exclusions exist, such as university halls of residence and licence agreements for lodgers in the landlord’s home.
In the case of a dispute between landlord and tenant, the deposit will be protected in the scheme until the matter is agreed. But qualifying landlords who fail to register may be disadvantaged by being seen to have failed their obligations.
The three protection services are: Deposit Protection Service, My Deposits, and Tenancy Deposit Scheme.
