ARLA has urged letting agents to check whether their existing tenancy agreements will be affected by a legal deadline of next Tuesday.

By June 23, deposits received on tenancies which began before April 5, 2007, must be protected, and in another warning, law firm Kirwans said that tenants would be able to check easily if their deposits have been protected, as required by the Deregulation Act.

Danielle Hughes from Kirwans said: “This legislation has a retrospective effect and has the potential to put landlords in a very vulnerable position. Landlords who have not protected deposits have only days left to begin taking steps to address the issue and make the necessary arrangements.

“Shelter’s website offers a database check on which tenants can determine within three minutes whether or not their deposits have been protected. It’s that simple.

“No doubt savvy tenants will already be checking the position and waiting with baited breath in the hope that their landlord falls foul of the requirements.

“We’d advise landlords with tenants in living in their property at any time from and before April 6, 2007, to carry out a historical review and take immediate action or face potential fines, county court action and potentially be unable to remove tenants from property.”

David Cox, managing director of ARLA, said: “ARLA is pleased a legislative solution to a loophole in tenancy law that plagued the industry for two years, has finally been addressed through the Deregulation Act 2015.

“In 2007, the Government introduced compulsory tenancy deposit protection as part of the Housing Act 2004, in order to offer a more robust mechanism for mediating disputes at the end of tenancies.

“However, the 2013 Court of Appeal judgment in Superstrike v Rodrigues ruled that any tenancy which began before April 6, 2007, but was renewed or became a statutory periodic after that date, was a new tenancy and therefore the deposit had to be re-protected.

“This was of serious detriment to landlords and agents as deposits that had been correctly protected became unlawful through no fault of their own.

“Now, under the Deregulation Act 2015, this confusion has been addressed.

“All deposits received on tenancies which began before April 6, 2007, that have since been renewed or become statutory periodic tenancies, must be protected under one of the government authorised tenancy deposit protection schemes (TDS, DPS, MyDeposits).

“Landlords have until the June 23 to comply with this new provision and we urge all agents to check whether their existing tenancy agreements will be affected and to act accordingly.

“If landlords fail to comply they could be liable for sanctions which include a potential claim by the tenant for compensation of up to three times the amount of the deposit paid, and find themselves unable to bring a tenancy to an end through a Section 21 notice.”