New Deposit Scheme for Residential Letting in Wales
If a deposit is paid as security by the contract-holder or a third party on the contract-holder’s behalf, it must be dealt with in accordance with an authorised deposit scheme.
Landlords have 30 days from the date the deposit is paid to comply with the initial requirements of the scheme and give the contract-holder (and any person who paid the deposit monies on the contract-holder’s behalf) the ‘required information’ prescribed by the Welsh government.
If landlords do not protect security deposits in accordance with the Act, the contract-holder (or any person who has paid the deposit on their behalf) can apply to court. The court may order the landlord to pay a sum up to three times the amount of the deposit.
A landlord will not be able to serve a section 173 notice, or a section 186 notice (to end certain fixed term contracts at the end of their term), or give notice under a landlord’s break clause under the Act, if:
- The initial requirements of an authorised deposit scheme have not been met; or
- The required information has not been provided to the contract-holder; or
- The deposit is not being held in accordance with an authorised deposit scheme,
unless the deposit is returned to the contract-holder (or any person who paid the deposit on their behalf) either in full or with any agreed deductions, or the county court has made an order, or an application has been withdrawn or settled by the parties.