This will apply to all tenancies below £100,000 provided they fulfil the remaining criteria for ASTs, and the regulations will be retrospective.

This means that in addition to any tenancies created from 1 October 2010, all existing tenancies between £25,000.00 and £100,000 will be captured by the new threshold and deemed to be AST's.

Further, the DCLG advise us that there will be no transitional period and that the regulations will take immediate effect from 1 October 2010 across the board.

Please note that the legislation itself will not be available for a couple of months and the information given by the DCLG is correct as at 25 March 2010, but may change before the legislation is released.

As if more were needed, this creates further pitfalls for landlords and agents.

The most obvious one is the registration of security deposits. Under the Housing Act 2004 all security deposits taken in regard to ASTs must, along with other regulations contained within the Act, be registered within 14 days of their receipt.
 
Currently any tenancy attracting rent above £25,000 per year is deemed to be a common law tenancy and falls outside the Housing Act. There is, therefore, no requirement for any deposit to be registered with a scheme or within any time period.

After 1 October 2010 this will change, and all deposits taken prior to this date for existing tenancies between £25,000 and £100,000 must be registered within 14 days of the legislation coming into force.

Landlords will be required to comply with the initial requirements of any scheme and serve the relevant information in exactly the same way that is currently required with ASTs.

Failure to do so may attract a penalty three times the deposit payable by the landlord to the tenant, and the sanction of being unable to serve Notice to end the tenancy until the regulations are complied with.

Landlords and agents are advised to start preparing for the changes now rather than leaving it until the legislation comes into force, when there is expected to be a rush on the deposit schemes, which could see some deposits being registered late through no fault of the landlord or the agent.

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