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The Court of Appeal has held that a landlord was not required to pay a rent deposit in respect of an assured shorthold tenancy (AST) into an authorised scheme, where there was no authorised scheme at the time the deposit was received. However, the landlord could only make use of the procedure in section 21 of the Housing Act 1988 to end the AST if the deposit was returned to the tenant, or possibly if it had been protected in an authorised scheme at the time the notice was served.
Any landlords still holding tenancy deposits received before 6 April 2007 will be relieved that the court had no hesitation in finding that there is no direct obligation to register those deposits.