The Housing (Tenancy Deposit Schemes) Order 2007

Further provision about insurance schemes

4.—(1) Paragraph 5 (insurance schemes: general) is amended as follows.

(2) After sub-paragraph (1) insert—

“(1A) The scheme must make provision as to the requirements that fall to be complied with by the landlord or by the scheme administrator where—

(a) a landlord wishes to retain a tenancy deposit under the scheme; or

(b) a landlord retaining a tenancy deposit under the scheme (in relation to a tenancy that has not terminated) gives notice to the scheme administrator that he no longer wishes to retain the deposit under that scheme.”

(3) After sub-paragraph (3) insert—

“(3A) The scheme may make provision enabling the scheme administrator to determine that, by virtue of the landlord’s failure to comply with a relevant obligation, a tenancy deposit which has previously been retained by a landlord under the scheme (and which relates to a tenancy which has not ended) is to cease to be retained under the scheme.

(3B) Provision under sub-paragraph (3A) must require the scheme administrator, before making a determination, to give a notice to the landlord stating that the scheme administrator proposes to make such a determination and the reasons for the proposal.”

(4) In sub-paragraph (4), for “such failure on the part of the landlord” substitute “failure by the landlord to comply with a relevant obligation”.

(5) After sub-paragraph (4) insert—

“(4A) Provision made under sub-paragraph (4) must require the scheme administrator, before determining that the landlord’s membership be terminated, to give a notice to the landlord stating that the scheme administrator proposes to make such a determination and the reasons for the proposal.

(4B) On the termination of a landlord’s membership under sub-paragraph (4)—

(a) any tenancy deposits previously retained by the landlord under the scheme (in relation to tenancies which had not ended before the termination) cease to be retained under the scheme; but

(b) the scheme continues to apply to a tenancy deposit retained by the landlord under the scheme in relation to a tenancy which ended before the termination as if the landlord were still a member.”

(6) After sub-paragraph (5) insert—

“(6) Paragraph 5A makes further provision in relation to the procedure to be followed after a notice of the kind mentioned in sub-paragraph (1A)(b), (3B) or (4A) has been given in accordance with the scheme.

(7) In this paragraph “relevant obligation” means—

(a) the duty to comply with a direction mentioned in sub-paragraph (2); or

(b) any obligation under the scheme which is specified in the scheme as a relevant obligation for the purposes of this paragraph.”