Where's the interest?

Our lawyer Fiona McNulty looks at the legal issues regarding entitlement to interest on long-standing tenancy deposits
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Tenancy deposit cartoon
© Malcolm Willett (www.willett-ink.co.uk)
Question: I have been renting the same flat since 2004 and at the outset of my tenancy paid a £2,200 deposit to my landlord.

I am aware that there has been a change in the law regarding deposits in the past year and wonder if, since the change, I am entitled to claim interest from my landlord on the deposit being held?

Answer: The change in the law to which you refer was the introduction of Tenancy Deposit Schemes in April 2007. These are government-backed arrangements under which a landlord is required to protect a tenant’s deposit, either by way of an insurance policy or by the deposit being retained by a custodial plan.

The scheme is compulsory for all residential assured shorthold tenancies created on or after 6 April 2007.

If your tenancy has simply continued under the same agreement since 2004, then you are most likely a “statutory periodic tenant” and remain in occupation of the flat under the terms of your original lease on a month-by-month basis.

This means that the new regulations in relation to deposits will not apply in your case. If at any point since 6 April 2007 you have entered into a new fixed-term tenancy, then your landlord will be required to register your deposit with one of the government schemes.

This does not necessarily mean you are entitled to interest, and the position regarding interest will be set out in your tenancy agreement. You should seek legal advice as to who any interest belongs to if it is not clear from the wording of your tenancy.

What's your problem?

If you have a question for Fiona McNulty, email legalsolutions@standard.co.uk. We regret that questions cannot be answered individually.

Fiona is a partner in the property team at Thring Townsend Lee & Pembertons Solicitors www.ttuk.com.

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