In this week’s AskTDS, we answer a popular landlord query, “does the deposit need to be re-protected when the tenancy turns periodic?”
What is a periodic tenancy?
Most residential tenancies start as fixed-term tenancies, typically for 6 months or a year, which means the tenant and landlord are bound in a contract for a fixed-term. At the end of the fixed-term, the tenant is free to leave, and the landlord is free to look for a new tenant.
If the tenant decides to stay on after the fixed-term and the landlord agrees, the Housing Act provides that it will run on a month-by-month or week-by-week basis depending on how the rent is paid. This is a periodic tenancy.
Does the deposit need to be re-protected when the tenancy turns periodic?
If the deposit is held in either TDS’ Insured or Custodial scheme, the deposit is protected until the tenancy ends. As the tenancy turning periodic does not indicate the end of the tenancy, then the deposit would not need to be re-protected provided the tenant(s), landlord(s), premise, and deposit scheme all remain the same. However, there may be different rules for other tenancy deposit protection providers.
Are there any cases in which the deposit should be re-protected?
If the deposit is held in TDS’ Insured scheme, under our TDS Insured scheme for landlords, and the tenancy enters a new fixed term, the deposit would need to be re-protected and the protection fee paid again. For example, if the tenant didn’t want to move to a periodic tenancy, but instead wanted to remain in the property for another fixed term, then the landlord would need to re-protect the deposit.
If the tenancy deposit is register for protection under our TDS Insured scheme by one of our letting agent members the registration can be updated to reflect the new expected end date, or if the tenancy has become periodic. The tenancy deposit wouldn’t need to be re-registered again at this point.
Does the prescribed information need to be reissued?
There are four situations in which a landlord or their appointed agent would need to reissue the prescribed information and scheme leaflet.
- Change of tenant (for example, if one tenant moves out and is replaced)
- Change of landlord (for example, if the landlord sells the property to another landlord)
- Change of scheme (for example, if you were leaving the Insured scheme to join the Custodial scheme)
- Change of tenancy address (for example, if the agent or landlord has an alternative property for the tenants to move to)
If you are a landlord using our TDS Insured scheme, when you re-register the tenancy deposit for a new term or new agreement, even if there hadn’t been a change as detailed above, the Prescribed Information, including the scheme leaflet, should be served again on the tenants and any relevant person. This should be done within 30 days of the parties entering into the new term.
For more landlord tips please view our landlord FAQ page.
About TDS
Tenancy Deposit Scheme (TDS) is a government-approved scheme for the protection of tenancy deposits; TDS offers both Insured and Custodial protection and also provides fair adjudication for disputes that arise over the tenancy deposits that we protect.
We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits.
TDS Insured Scheme: where a TDS member can hold the tenancy deposits as stakeholder during the term of the tenancy.
TDS Custodial Scheme: where TDS hold the deposit for the duration of the tenancy.
TDS Academy: TDS provides property professionals with invaluable training in tenancy deposit protection and tenancy deposit disputes.
TDS Northern Ireland: TDS is Northern Ireland’s leading and only not for profit tenancy deposit protection scheme.
TDS can only comment on the process for our scheme, other deposit protection schemes may have a different process/require different steps. Content is correct at the time of writing.
These views are those of the author alone and do not necessarily reflect the view of TDS, its officers and employees.
ARLA|Propertymark: For agents who would like to stay up to date, you can contact Propertymark | ARLA at: join@propertymark.com. By being a member of Propertymark | ARLA you will be eligible for TDS Insured best headline rates.
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