The Housing (Tenancy Deposit Schemes) Order 2007

This is the order that is an amendment to schedule 10 of the Housing Act 2004 and covers deposits taken as security from tenants in the UK

The tenancy deposit schemes came into force on 6 April 2007 through this legislation and the idea of the schemes is to safeguard tenancy deposits and to provide dispute resolution methods of resolving disputes in relation to deposits. From that date it has been necessary for every deposit taken by a landlord in respect of an assured shorthold tenancy to be protected by a tenancy deposit scheme. If your deposit has not been protected in the correct manner it is not it will not be possible to serve a Section21 notice and thus obtain possession

The Order in its entirety is reproduced here courtesy of The Crown.

1. This Order may be cited as the Housing (Tenancy Deposit Schemes) Order 2007 and shall

come into force on 6th April 2007.

Amendments to Schedule 10 to the Housing Act 2004

2. Schedule 10 to the Housing Act 2004 (provisions relating to tenancy deposit schemes) is

amended as follows.

Further provision about custodial schemes

3.—(1) Paragraph 4 (Custodial Schemes: general) is amended as follows.

(2) After sub-paragraph (4) insert—

“(4A) Sub-paragraph (5) also applies where the tenant or the landlord notifies the scheme

administrator that a person acting as an adjudicator under the provision made under

paragraph 10 has made a binding decision that the relevant amount is payable either wholly

to one of them or partly to one and partly to the other.”

(3) In sub-paragraph (5), for “such a notification” substitute “a notification as mentioned in subparagraph

(4) or (4A)” and for “sub-paragraph (4)(a) and (b)” substitute “that sub-paragraph”.

(4) After paragraph 4 insert—

(a) 2004 c. 34. The powers conferred by paragraph 11 of Schedule 10 to the Housing Act 2004 are exercisable, as respects

England, by the Secretary of State and, as respects Wales, by the National Assembly for Wales. See the definition of the

appropriate national authority in section 261(1) of the Act.

“Custodial schemes: termination of tenancies - absent or un-cooperative landlord or

tenant

4A.—(1) The provision made by a custodial scheme for the purposes of paragraph 4(1) in

relation to the treatment of the relevant amount at the end of a tenancy must include

provision—

(a) for enabling the landlord, if he considers that the conditions set out in subparagraph

(2) are met, to apply to the scheme administrator for the whole or a

specified part of the relevant amount (“the amount claimed”) to be paid to him;

and

(b) for such an application to be dealt with by the scheme administrator in accordance

with the provisions of paragraph 4C.

(2) Such an application may be made if—

(a) at least 14 days have elapsed since the day on which the tenancy ended;

(b) the landlord and tenant have not reached an agreement under paragraph 4(2) with

respect to the amount claimed;

(d) the landlord believes that he is entitled to be paid the amount claimed and that the

amount claimed is referable to sums falling within sub-paragraph (5).

(3) This sub-paragraph applies if the landlord has no current address for, or other means

of contacting, the tenant.

(4) This sub-paragraph applies if—

(a) the tenant has, since the tenancy ended, received from the landlord a written notice

asking whether the tenant accepts that the landlord should be paid the whole or a

specified part of the relevant amount; and

(b) the tenant has failed to respond to that notice within the period of 14 days

beginning with the day on which he received the notice by indicating to the

landlord whether he accepts that the landlord should be paid the relevant amount or

the specified part of it (as the case may be).

(5) The amount claimed must be referable to—

(a) an amount of unpaid rent or any other sum due under the terms of the tenancy; or

(b) a liability of the tenant to the landlord arising under or in connection with the

tenancy in respect of—

(i) damage to the premises subject to the tenancy, or

(ii) loss of or damage to property on those premises,

other than damage caused by fair wear and tear.

(6) If sub-paragraph (4) applies and the notice specifies part of the relevant amount, the

amount claimed in the application must not exceed the specified part.

(7) The application must be accompanied by a statutory declaration made by the landlord

stating—

(a) the date on which the tenancy ended;

(b) that the landlord and the tenant have not reached any agreement under paragraph

4(2) with respect to the amount claimed, with details of any communications

between them since that date (whether relating to the relevant amount or

otherwise);

relied on to justify claiming that amount;

(d) if the landlord relies on the condition in sub-paragraph (3), that he has no current

address for, or other means of contacting, the tenant, giving particulars of any

address (other than the premises subject to the tenancy) and other contact details

(including telephone numbers or e mail addresses) which the landlord has had for

the tenant;

(e) if the landlord relies on the condition in sub-paragraph (4), that the condition is

met, with particulars of the facts relied on to demonstrate that it is met and

attaching a copy of the notice given to the tenant;

(f) any information he has as to the whereabouts of the tenant;

(g) that he gives his consent, in the event of the tenant disputing that the landlord

should be paid the amount claimed, for the dispute to be resolved through the use

of the dispute resolution service;

(h) that he considers that he is entitled to be paid the amount claimed; and

(i) that he makes the statutory declaration knowing that if he knowingly and wilfully

makes a false declaration he may be liable to prosecution under the Perjury Act

1911(a).

4B.—(1) The provision made by a custodial scheme for the purposes of paragraph 4(1) in

relation to the treatment of the relevant amount at the end of a tenancy must include

provision—

(a) for enabling the tenant, if he considers that the conditions set out in sub-paragraph

(2) are met, to apply to the scheme administrator for the whole or a specified part

of the relevant amount (“the amount claimed”) to be paid to him; and

(b) for such an application to be dealt with by the scheme administrator in accordance

with the provisions of paragraph 4C.

(2) Such an application may be made if—

(a) at least 14 days have elapsed since the day on which the tenancy ended;

(b) the landlord and tenant have not reached an agreement under paragraph 4(2) with

respect to the amount claimed;

(d) the tenant believes that he is entitled to be paid the amount claimed.

(3) This sub-paragraph applies if the tenant has no current address for, or other means of

contacting, the landlord.

(4) This sub-paragraph applies if—

(a) the landlord has, since the tenancy ended, received from the tenant a written notice

asking whether the landlord accepts that the tenant should be paid the whole or a

specified part of the relevant amount; and

(b) the landlord has failed to respond to that notice within the period of 14 days

beginning with the day on which he received the notice by indicating to the tenant

whether he accepts that the tenant should be paid the relevant amount or the

specified part of it (as the case may be).

(5) If sub-paragraph (4) applies and the notice specifies part of the relevant amount, the

amount claimed in the application must not exceed the specified part.

(6) The application must be accompanied by a statutory declaration made by the tenant

stating—

(a) the date on which the tenancy ended;

(b) that the landlord and the tenant have not reached any agreement under paragraph

4(2) with respect to the amount claimed, with details of any communications

between them since that date (whether relating to the relevant amount or

otherwise);

(a) 1911. c 6.

address for, or other means of contacting, the landlord, giving particulars of any

address and other contact details (including telephone numbers or e mail

addresses) which the tenant has had for the landlord;

(d) if the tenant relies on the condition in sub-paragraph (4), that the condition is met,

with particulars of the facts relied on to demonstrate that it is met and attaching a

copy of the notice given to the landlord;

(e) any information he has as to the whereabouts of the landlord;

(f) that he gives his consent, in the event of the landlord disputing that the tenant

should be paid the amount claimed, for the dispute to be resolved through the use

of the dispute resolution service;

(g) that he considers that he is entitled to be paid the amount claimed; and

(h) that he makes the statutory declaration knowing that if he knowingly and wilfully

makes a false declaration he may be liable to prosecution under the Perjury Act

1911(a).

4C.—(1) Immediately upon receipt of—

(a) a duly completed application from the landlord, accompanied by a statutory

declaration which appears to meet the requirements of paragraph 4A(7), or

(b) a duly completed application from the tenant, accompanied by a statutory

declaration which appears to meet the requirements of paragraph 4B(6),

the scheme administrator must give to the tenant or, as the case may be, the landlord

(“the other party”) a copy of the application and accompanying statutory declaration

and a notice under sub-paragraph (2).

(2) A notice under this sub-paragraph is a notice—

(a) asking the other party to indicate—

(i) whether he accepts that the applicant should be paid the whole or part of the

amount claimed;

(ii) if he accepts that part of the amount claimed should be paid, the amount he

accepts should be paid; and

(iii) if he does not accept that the applicant should be paid the whole of the amount

claimed, whether he consents to the dispute being resolved through the use of

the dispute resolution service; and

(b) warning the other party that—

(i) the amount claimed will be paid to the applicant unless, within the relevant

period, the other party informs the scheme administrator that he does not

accept that the whole of the amount claimed should be paid to the applicant;

and

(ii) if the other party responds to the scheme administrator informing him that he

does not accept that the whole of the amount claimed should be paid to the

applicant, but fails to respond within the relevant period to the question

mentioned in paragraph (a)(iii), he will be treated as having given his consent

for the dispute to be resolved through the use of the dispute resolution service.

(3) If within the relevant period the scheme administrator receives a response from the

other party to the effect that he accepts that the amount claimed should be paid to the

applicant—

(a) the application must be granted; and

(a) 1911. c 6.

(b) the scheme administrator must arrange for the amount claimed to be paid to the

applicant within the period of 10 days beginning with the day on which the scheme

administrator receives that response.

(4) If within the relevant period the scheme administrator receives a response from the

other party to the effect that he does not accept that the applicant should be paid any of the

amount claimed—

(a) the application must be refused;

(b) the scheme administrator must not pay the amount claimed to either party except in

accordance with the relevant provisions of paragraph 4; and

the questions asked in the notice under sub-paragraph (2).

(5) If within the relevant period the scheme administrator receives a response from the

other party to the effect that he accepts that part of the amount claimed should be paid to the

applicant—

(a) sub-paragraph (3) applies in relation to that part of the amount claimed; and

(b) sub-paragraph (4) applies to so much of the application as relates to the rest of the

amount claimed.

(6) If the scheme administrator does not, within the relevant period, receive a response

from the other party indicating whether he accepts that the whole or part of the amount

claimed should be paid to the applicant, the scheme administrator must arrange for the

amount claimed to be paid to the applicant within the period of 10 days beginning with the

day after the last day of the relevant period.

(7) If within the relevant period the scheme administrator receives a response from the

other party to the effect that he does not accept that the applicant should be paid the whole

of the amount claimed but the other party fails within that period to indicate whether he

consents to the dispute being resolved through the use of the dispute resolution service—

(a) the other party is to be treated as having given his consent to the use of that

service; and

(b) the scheme administrator must inform the applicant that such consent is treated as

having been given.

(8) In this paragraph “the relevant period”, in relation to the application, means the period

of 14 days beginning with the day on which the notice mentioned in sub-paragraph (2) is

received by the other party.”

Further provision about insurance schemes

4.—(1) Paragraph 5 (insurance schemes: general) is amended as follows.

(2) After sub-paragraph (1) insert—

“(1A) The scheme must make provision as to the requirements that fall to be complied

with by the landlord or by the scheme administrator where—

(a) a landlord wishes to retain a tenancy deposit under the scheme; or

(b) a landlord retaining a tenancy deposit under the scheme (in relation to a tenancy

that has not terminated) gives notice to the scheme administrator that he no longer

wishes to retain the deposit under that scheme.”

(3) After sub-paragraph (3) insert—

“(3A) The scheme may make provision enabling the scheme administrator to determine

that, by virtue of the landlord’s failure to comply with a relevant obligation, a tenancy

deposit which has previously been retained by a landlord under the scheme (and which

relates to a tenancy which has not ended) is to cease to be retained under the scheme.

(3B) Provision under sub-paragraph (3A) must require the scheme administrator, before

making a determination, to give a notice to the landlord stating that the scheme

administrator proposes to make such a determination and the reasons for the proposal.”

(4) In sub-paragraph (4), for “such failure on the part of the landlord” substitute “failure by the

landlord to comply with a relevant obligation”.

(5) After sub-paragraph (4) insert—

“(4A) Provision made under sub-paragraph (4) must require the scheme administrator,

before determining that the landlord’s membership be terminated, to give a notice to the

landlord stating that the scheme administrator proposes to make such a determination and

the reasons for the proposal.

(4B) On the termination of a landlord’s membership under sub-paragraph (4)—

(a) any tenancy deposits previously retained by the landlord under the scheme (in

relation to tenancies which had not ended before the termination) cease to be

retained under the scheme; but

(b) the scheme continues to apply to a tenancy deposit retained by the landlord under

the scheme in relation to a tenancy which ended before the termination as if the

landlord were still a member.”

(6) After sub-paragraph (5) insert—

“(6) Paragraph 5A makes further provision in relation to the procedure to be followed

after a notice of the kind mentioned in sub-paragraph (1A)(b), (3B) or (4A) has been given

in accordance with the scheme.

(7) In this paragraph “relevant obligation” means—

(a) the duty to comply with a direction mentioned in sub-paragraph (2); or

(b) any obligation under the scheme which is specified in the scheme as a relevant

obligation for the purposes of this paragraph.”

5. After paragraph 5 insert—

“Requirements where deposit is to cease to be retained under an insurance scheme

5A.—(1) This paragraph applies in relation to—

(a) a notice of the kind mentioned in paragraph 5(1A)(b) or (3B), or

(b) a notice from the scheme administrator stating that he proposes to terminate a

landlord’s membership of the scheme under paragraph 5(4),

given in accordance with an insurance scheme.

(2) The scheme must make provision for the scheme administrator, in the case of a notice

of the kind mentioned in paragraph 5(1A)(b) which has not been not withdrawn—

(a) to determine the date on which the tenancy deposit is to cease to be retained under

the scheme; and

(b) to give a notice under sub-paragraph (4) to the landlord and to the tenant.

(3) The scheme must make provision for the scheme administrator, in the case of a notice

of the kind mentioned in paragraph 5(3B), to take the following steps after the end of the

period of 14 days beginning with the day on which that notice is received—

(a) to determine whether the deposit should cease to be retained under the scheme and,

if so, the date on which it is to cease to be so retained;

(b) if the determination is that the deposit should continue to be retained under the

scheme, to give a notice of the determination to the landlord;

notice under sub-paragraph (4) to the landlord and to the tenant.

(4) A notice under this sub-paragraph is a notice—

(a) identifying the tenancy deposit in question;

(b) informing the recipients of the notice of the determination made by the scheme

administrator and stating the date when the deposit ceases to be retained under the

scheme; and

Act in relation to the deposit (including in particular the effect of section 213 as

modified by sub-paragraph (9)).

(5) The scheme must make provision for the scheme administrator, in the case of a notice

of the kind mentioned in sub-paragraph (1)(b), to take the following steps after the end of

the period of 14 days beginning with the day on which that notice is received—

(a) to determine whether to terminate the landlord’s membership and, if so, the date on

which his membership is to terminate;

(b) if the determination is that the landlord should continue as a member, to give a

notice of the determination to the landlord; and

under sub-paragraph (6) to the landlord and to the tenant under any tenancy in

relation to which a deposit affected by the determination is retained under the

scheme.

(6) A notice under this sub-paragraph is a notice—

(a) informing the recipients of the notice of the determination by the scheme

administrator that the landlord’s membership of the scheme is to be terminated and

stating the date on which his membership terminates;

(b) giving a general explanation of the effect of the termination on any tenancy

deposits retained by the landlord under the scheme; and

Act in relation to any tenancy deposits that cease to be retained under the scheme

as a result of the termination of membership (including in particular the effect of

section 213 as modified by sub-paragraph (9)).

(7) The date determined under sub-paragraph (2)(a), (3)(a) or (5)(a) must not be within

the period of three months beginning with the day on which the original notice mentioned

in sub-paragraph (1) was received.

(8) A notice under sub-paragraph (4) or (6) must be given at least two months before the

date on which the deposit ceases to be retained under the scheme or the landlord’s

membership terminates (as the case may be).

(9) In the application of section 213 to a tenancy deposit which ceases to be retained

under an insurance scheme (“the old scheme”) by virtue of a determination mentioned in

this paragraph—

(a) references to receiving the deposit include a reference to ceasing to retain it under

the terms of the old scheme;

(b) subsection (3) has effect as if for the words “within the period of 14 days

beginning with the date on which it is received” there were substituted “before the

deposit ceases to be retained under the old scheme”; and

receives the deposit were a reference to the date on which the deposit ceases to be

retained under the old scheme.”

6.—(1) Paragraph 6 is amended as follows.

(2) In sub-paragraph (1), for “7 and” substitute “6A to”.

(3) After sub-paragraph (2) insert—

“(2A) When a tenant gives notice under sub-paragraph (2) he must also indicate whether

he consents to any dispute as to the amount to be repaid to him being resolved through the

use of the dispute resolution service.”

(4) In sub-paragraph (4)—

(a) omit “or” after paragraph (a); and

(b) after paragraph (b) insert—

“or

has made a binding decision that the outstanding amount is payable either wholly

to one of them or partly to one and partly to the other.”

(5) In sub-paragraph (5) for “or (b)” substitute “, (b) or (c)”.

7. After paragraph 6 insert—

“Notice to be sent to landlord when a direction under paragraph 6(3) is given

6A.—(1) This paragraph applies where the scheme administrator of an insurance scheme

gives a direction under paragraph 6(3) to a landlord.

(2) The scheme administrator must also send to the landlord a notice—

(a) asking the landlord to indicate—

(i) whether he accepts that the tenant should be repaid the whole or part of the

outstanding amount;

(ii) if he accepts that part of it should be repaid, the amount he accepts should be

repaid; and

(iii) if he does not accept that the tenant should be repaid the whole of the

outstanding amount, whether he consents to the dispute being resolved

through the use of the dispute resolution service; and

(b) warning the landlord that if he does not accept that the tenant should be repaid the

whole of the outstanding amount but fails to respond within the relevant period to

the question mentioned in paragraph (a)(iii), he will be treated as having given his

consent for the dispute to be resolved through the use of that service.

(3) If the scheme administrator does not, within the relevant period, receive a response

from the landlord indicating whether he accepts that the whole or part of the outstanding

amount should be paid to the tenant—

(a) the scheme administrator must treat the lack of a response as an indication that the

landlord does not accept that the tenant should be repaid any of the outstanding

amount;

(b) the scheme administrator must determine forthwith whether he is satisfied that the

notice was received by the landlord;

the landlord is to be treated as having given his consent for the dispute to be

resolved through the use of the dispute resolution service; and

(d) the scheme administrator must inform the tenant and the landlord whether or not

such consent is to be treated as having been given.

(4) If within the relevant period the scheme administrator receives a response to the

notice under sub-paragraph (2) to the effect that the landlord does not accept that the tenant

should be repaid the whole of the outstanding amount but the landlord fails within that

period to indicate whether he consents to the dispute being resolved through the dispute

resolution service—

(a) the landlord is to be treated as having given his consent for the dispute to be

resolved through the use of that service; and

(b) the scheme administrator must inform the tenant and the landlord that such consent

is to be treated as given.

(5) In this paragraph—

“the outstanding amount” has the same meaning as in paragraph 6;

“the relevant period” means the period of 10 working days beginning with the day

after that on which the notice referred to in sub-paragraph (2) is sent; and

“working days” shall be taken to exclude Saturdays, Sundays, Christmas Day,

Good Friday and any day which, under the Banking and Financial Dealings Act

1971(a), is a bank holiday in England and Wales.”

General

8. In paragraph 10 (dispute resolution procedures), after sub-paragraph (2) insert—

“(3) The provision made under this paragraph may confer power on a person acting as an

adjudicator in relation to such a dispute to decline to proceed, or continue to proceed, with

the case.

(4) In this Schedule, in relation to a custodial scheme or an insurance scheme, “the

dispute resolution service” means the facilities provided by the scheme in accordance with

this paragraph.”

9. After paragraph 10 insert—

“Service of documents: general

10A. A tenancy deposit scheme may make provision as to the methods which may be

used for giving or sending any direction, notice or other document which falls to be given

or sent under the scheme.

Service of documents by scheme administrator on landlords

10B.—(1) The provision made by a tenancy deposit scheme under paragraph 10A may

include provision for any direction, notice or other document mentioned in this Schedule

which is to be given or sent to a landlord by the scheme administrator to be treated as

having been received on the second day after the day on which it is sent by first class post

to the landlord at the address last provided by him to the scheme administrator as the postal

address to which correspondence may be sent.

(2) Sub-paragraph (1) does not apply to the notice mentioned in paragraph 6A(2).

(3) Provision made under sub-paragraph (1) may require the scheme administrator—

(a) to send a document to an address other than that mentioned in that sub-paragraph;

(b) to use or attempt to use any other available means of communication,

before sending a document which is to be treated as having been received as mentioned in

that sub-paragraph.

Service of documents by scheme administrator on tenants

10C.—(1) The provision made by a tenancy deposit scheme under paragraph 10A may

include provision for any notice or other document mentioned in this Schedule which is to

be given or sent to a tenant by the scheme administrator to be treated as having been

received on the second day after the day on which it is sent by first class post to the tenant

at the proper address.

(2) In the case of a notice mentioned in paragraph 4C(2), the proper address is—

(a) the address (if any) last provided to the scheme administrator as the address to

which correspondence may be sent; or

(a) 1971 c 80.

(b) if no such address has been provided, the address given in the landlord’s statutory

declaration as the tenant’s last known address or, if the scheme administrator has a

more recent address for the tenant, that address.

(3) In the case of a notice of the kind mentioned in paragraph 5A(4) or (6), the proper

address is the address of the premises subject to the tenancy in question.

(4) Provision made under sub-paragraph (1) may require the scheme administrator—

(a) to send a document to an address other than the proper address, or

(b) to use or attempt to use any other available means of communication,

before sending a document which is to be treated as having been received as mentioned in

that sub-paragraph”

Consequential amendments

10. In paragraph 2—

(a) in sub-paragraph (1), for “and 4” substitute “to 4C” and for “and 10” substitute “to 10C”;

and

(b) in sub-paragraph (2), for “and 10” substitute “to 10C”.

11. In paragraph 3, in sub-paragraph (5), after “paragraph 4” insert “or 4C”.

12. Before paragraph 7 insert—

“Insurance schemes – supplementary provisions”