Section 212(8) of the Housing Act 2004 defines a tenancy deposit to mean any money intended to be held by the landlord or otherwise as security for:

  1. The performance of any obligations of the tenant, or
  2. The discharge of any tenant liability arising under in connection with the tenancy

Effective from 6 April 2007 sections 212 -215 of the Housing Act 2004 (subject to amendments) requires all landlords of an assured shorthold tenancy (AST) in England and Wales to:

  1. Protect any tenancy deposit held by the landlord in an authorised tenancy deposit scheme,
  2. Comply with the ‘initial requirements’ of such a scheme and
  3. Provide the ‘prescribe information’ of the scheme to the tenant.

There are two sanctions where the landlord has not complied with these requirements:

  1. Penalty
  2. Prohibition of serving a section 21 notice