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.
Art. 4 in force at 6.4.2007, see art. 1