THE Residential Tenancy (Deposit Scheme) (Jersey) Regulations 2014 are intended to come into force in the near future. The main aim of these regulations is to introduce rental deposit protection for all residential tenancies in Jersey. The regulations will remove the risk of tenants' rental deposits being unfairly withheld by landlords and managing agents when tenancy agreements come to an end and will provide a simple framework to assist landlords and tenants in the management of deposits. In essence, deposits will be held by a third party and will not be released until the same party is content that both landlord and tenant are in agreement.

How does the scheme work?

The regulations provide for the formation of an independent body, known as the Deposit Scheme, which will hold property deposits. The scheme will be managed by a scheme administrator who will report to the Minister for Housing. The role of scheme administrator is currently out for tender.

Paying in a deposit

Every landlord who takes a deposit in respect of a new, varied or renewed tenancy agreement from a tenant after the regulations come into force will be required to pay the deposit into the scheme account within 14 days. It will also be permissible, although not obligatory, for any existing deposit held by a landlord to be applied into the scheme account after the enforcement date and for the scheme to be adopted by those with existing tenancies.

When a landlord transfers deposit monies into the scheme, the payment must be accompanied by the following information:

  • The address of the residential unit.
  • The commencement date of the residential tenancy.
  • The date on which the residential tenancy ends.
  • The type of property that is the subject of the tenancy.
  • The amount of the deposit payable in respect of the residential tenancy.
  • The date on which the deposit was paid.
  • The name, address and contact information of the landlord.
  • The name and contact information of each tenant.
  • The name and business address of any managing agent.
  • The signature of the landlord, or any managing agent, and each tenant.
  • Any other information required by the scheme administrator.

Following receipt of this information, the scheme administrator will forward a copy of the notice to each tenant affected. There are provisions under the regulations which allow the minister to impose fees on both the landlord and tenant, associated with the process of crediting the scheme account and the registration of any deposit on the scheme.

Such fees have not yet been discussed or disclosed, although it has been estimated that a single deposit will incur a service charge of £10 to £20. Interest earned against the scheme account will be used to provide tenants with interest against their deposits, but may also be used to meet the costs of the scheme administration where appropriate.

Paying out a deposit

There are two circumstances which may result in the release of deposit monies, following the termination of a tenancy.

The first is when a landlord and tenant come to an amicable agreement as to how the monies should be treated and the second follows any contention between the parties.

In the event that both the landlord and tenant are in agreement, and have each notified the scheme administrator that a given tenancy has come to an end and a set amount will be paid either wholly to one of them, or partly to one and partly to the other, then the scheme administrator will release the deposit in the agreed fashion within five days of receipt of the notices.

The second method aims to resolve any dispute as to the apportionment between the parties. Essentially, for a contested claim to be made by one party against the other, the residential tenancy must have come to an end, deposit monies must be held in the deposit scheme, 14 days must have elapsed since the tenancy ended and the relevant parties must have failed to agree on their respective payments.

The regulations provide that a dispute resolution service must be provided and will be available where both parties cannot agree on the treatment of deposit monies. The dispute resolution service may be free, or subject to payment by one or more of the parties to a dispute. This service, along with the relating costs, is yet to be determined.

The service will be available for any disputes in relation to deposits and will be considered in conjunction with the Residential Tenancy (Condition Reports) (Jersey) Order 2014.

Commencement date

At the time of writing there has been a delay in the formation timetable. It is anticipated that the scheme will go live towards the end of spring/early summer and expected that the role of scheme administrator will be appointed towards the end of February 2015. Further information will follow once an accurate timeframe and an estimation of fees has been confirmed.

Originally published in Homelife.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.