The National Landlords Association (NLA) has warned landlords and letting agents that they must protect a tenancy deposit with an approved government scheme, after changes to the Localism Act come into force on 6 April.
These latest changes give landlords 30 days to protect the deposit after receiving it from their tenant, up from the previous 14 days. The changes apply in England and Wales.
Landlords must also give their tenant the required Prescribed Information and Deposit Protection Certificate as proof it is protected within this 30 day period.
These changes were made to the Localism Act to close a legal loophole, which saw some landlords successfully appeal against penalties for failing to protect a deposit.
If a landlord fails to protect a deposit, they could be taken to court and fined between one and three times the deposit amount and will be unable to apply for a possession order with a Section 21 notice until the matter is resolved.
David Salusbury, NLA chairman, said: “These changes are helpful to landlords who now have extra time to ensure any deposit they take is properly protected.