Here we look at the situation where the deposit was originally protected perfectly within 30 days with an insured scheme but was then un-protected by the scheme after the end of the term due to a failure by the landlord (or agent) to respond to a request for information as to whether a new fixed term is to be / has been granted or whether the tenancy has become periodic. MyDeposits started tightening up on this some time ago.
The question is – can the landlord or agent simply renew the deposit protection with the same scheme before serving a section 21 notice or, must the deposit be repaid in full as if it had never been protected?
This article is only concerned with insured schemes where a fee is payable. Where a deposit is protected with a custodial scheme, the deposit remains protected throughout so is not a problem.
The Deposit Protection Service insured scheme rules say:
The DPS will send the Landlord a reminder 1 month before the Tenancy End Date informing them that The DPS must be notified prior to the Tenancy End Date whether the Tenancy is a) at an end; b) continuing on a periodic basis; or c) renewing as a fixed term Tenancy. If the Landlord does not respond to this notification prior to the Tenancy End Date The DPS will close the Deposit and inform the Landlord and all Tenants that the Deposit is no longer protected. The DPS will send such notification via e-mail, SMS or postal communication. [Term 16a].
The MyDeposits insured scheme rules says:
C4.1 Prior to the end date of the fixed term AST, as provided to the scheme at protection, you must inform us whether the AST is due to terminate, continue on an SPT or be renewed with a new fixed term. If the member does not update the protection by 30 calendar days after the end date of the tenancy, then the scheme will automatically un-protect the deposit and inform the tenant.
The TDS rules say:
Where a Statutory Periodic Tenancy on the same terms follows a Fixed Term Tenancy no further Tenancy Deposit Protection Charge is payable. The Deposit will remain Protected until the end of the Statutory Periodic Tenancy or until there is a material change in the terms (e.g. increase in rent, change in Tenant, change in the amount of the Deposit)…
All three schemes require no further fee if the tenancy becomes periodic at the end of the fixed term assured shorthand tenancy – just that they be informed. But, all three schemes require a further fee if a renewal tenancy is granted.