Tenancy Deposit – variations on a theme

Legal Action May 09 housing updates contain a few tenancy deposit cases, which further muddy the waters…

Seghier v Rollings, Bow County Court, 6 March 2009. An assured shorthold beginning in May 2007. A deposit was paid by Mr Seghier to the letting agent before the start of the tenancy. It was not protected, nor the required information given. Ms Rollings was apparently unaware of the existence of the deposit scheme. The deposit remained unprotected until shortly before the initial hearing of Mr Seghier’s claim in June 2008. At the hearing Ms Rollings gave a copy of the certificate of deposit to Mr Seghier, but the prescribed information was not provided then or subsequently. At trial, Mr Seghier sought an order that the deposit either be repaid or paid into a designated scheme account and the 3 x deposit be paid to him. HHJ Redgrave distinguished Harvey v Bamforth on the basis that Ms Rollings had still not complied with s213(6)(a). The phrase ‘as it thinks fit’ in s.214(3) meant the court must order either return of deposit (s.214(3)(a)) or deposit to be put in a scheme (s.214(3)(b)). Payment of 3 x deposit within 14 days. Clearly the Court was untroubled by the late compliance argument or the s.214 ‘must also’ point, assuming that either were raised.

Beal v McCartney, Plymouth County Court, 12 March 2009. Ms McCartney granted Mr Beale a 6 month AST in March 2008. The tenancy agreement said that the deposit would be protected. It wasn’t. In September 2008, Mr Beal received a letter from the landlord’s mortgage lender informing him that a warrant of eviction was being applied for. The eviction took place on 22 October. Mr Beal made a claim for the deposit, 3 x deposit award and breach of quiet enjoyment. The Court awarded all this, with £500 for breach of quiet enjoyment. The Court observed that it was ‘quite clear’ that s.214(3) meant it must award the 3 x deposit and that ‘it is very silly of landlords’ if they don’t take notice. Interesting in that this appears to be a retrospective claim, rather than made during the course of the tenancy.

Universal Estates v Tiensia, Croydon County Court, 23 February 2009. Ms Tiensia was granted an AST on 19 May 2008 by UE. The rent was £2400 per month. A deposit of £2400 was paid in installments, with the last on 4 June. Ms Teinsia was in rent arrears from the start due to HB problems and the landlord served notice relying on grounds 8, 10 and 11 immediately after the second month’s rent was due. Ms Tiensia defended the possession claim and counterclaimed for the deposit and 3 x payment. The landlord registered the deposit with Tenancy Deposit Solutions Limited and faxed the certificate to Ms Tiensia.

The terms of the TDS Ltd scheme stated that the deposit must be protected within 14 days of being received from the tenant and details provided. On application for summary judgment, the DDJ held that the ‘initial requirements’ of the scheme itself (as well as s.213) required the deposit to be protected within 14 days. This requirement could not be satisfied once the 14 days had passed. 3 x deposit ordered.

Depending on the wording of the terms of the particular tenancy deposit scheme (and I believe that they are broadly similar on this point), this is a good counter argument on the late compliance point. If the landlord has not protected the deposit within 14 days of receipt and the terms of the scheme are that they must, then they quite simply cannot comply with the ‘initial requirements of an authorised scheme’ as per s.214(1)(a) and (2)(a). The details of the scheme itself are therefore important to check.

[For all tenancy deposit case posts click here]

Posted in Assured Shorthold tenancy, Deposits, FLW case note, Housing law - All, Possession and tagged , , , . RSS feed for this post and comments.


Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts, and still is Nearly Legal on Google +


  1. Posted 17/05/2009 at 6:46 pm | link to comment

    Er (per the Universal Estates case) how is/was that an assured shorthold tenancy?

    The point made might also encourage the drafters of the rules of the various schemes to think carefully about late compliance.

    • Posted 17/05/2009 at 7:15 pm | link to comment

      Quite right – either the reported rent level is wrong, or someone missed a trick.

      • Niki Goss
        Posted 20/05/2009 at 11:00 am | link to comment

        rent level wrong [see comment below]

      • Posted 22/05/2009 at 11:17 am | link to comment

        Incidentally, is there any justification for the maximum rent level for an AST, especially as it is so low?

        (It looks like I am about to be bitten by this, so I am particularly bitter about this legislative non-sense).

        • Posted 22/05/2009 at 12:27 pm | link to comment

          It just hasn’t been changed since 1988 or so. It is proposed to change the cut off to £100,000 in the near future, but when this will come into force is anyone’s guess.

          • Posted 22/05/2009 at 2:43 pm | link to comment

            I know it hasn’t changed, but it seems to be pretty horrible to have a cut-off at all, as it the attitude underlying it seems to be that if you’re wealthy enough, then you deserve to have to deal with unscrupulous landlords and bear the cost of litigation.

            No chance that the plan is to change the amount retrospectively?

  2. Posted 18/05/2009 at 10:46 am | link to comment

    re Beal v McCartney – I thought ASTs were protected from eviction in the first 6 months?

    • Posted 18/05/2009 at 11:04 am | link to comment

      Only from some possession claims by their landlord. Assuming that the tenancy was without the consent of the mortgage co. and that the mortgage predated the tenancy, the tenancy dies when possession is enforced.

      • Posted 18/05/2009 at 3:01 pm | link to comment

        What NL meant to say was that only possession claims under section 21 were excluded. Evictions for cause, by superior landlords and the like are all still possible.

        • Posted 18/05/2009 at 3:10 pm | link to comment

          But for lenders, it all depends on whether the tenancy was granted with their consent in the first place. Or for s.21, it could be a protected period of more than 6 months depending on tenancy agreement, and so on. Which was why I didn’t want to get into the details. My response was vague but accurate ;-)

  3. Niki Goss
    Posted 18/05/2009 at 12:24 pm | link to comment

    an appeal to the CJ has been lodged in Tiensia by the Landlord

    • J
      Posted 18/05/2009 at 12:33 pm | link to comment

      Presumably on the basis that it isn’t an assured tenancy as the rent exceeds £25,000 p.a?

      • Niki Goss
        Posted 20/05/2009 at 10:58 am | link to comment

        the rent wasn’t £2.4k pm and didnt exceed £25k pa. The tenancy was/is
        an AT that was also an AST

        • Posted 25/05/2009 at 3:47 pm | link to comment

          Thanks Niki. I’d taken it that the report was in error on that point.

          • Posted 29/05/2009 at 1:44 pm | link to comment

            Apologies to all. Yes, the report is wrong (my mistake) the deposit was £2,400, but that was 2x the rent which was £1,200pm. (well spotted, though, Francis)

  4. Posted 22/05/2009 at 8:08 pm | link to comment

    @ Marcin. I think the idea was that if you could afford that level of rent, then you pretty much inevitably knew your way around negotiating a contract. Inflation may have caught up with that view.

    On retrospectivity – we don’t know.

  5. JS
    Posted 25/05/2009 at 1:12 pm | link to comment

    I don’t know whether this issue has been raised before – but I am firmly of the view that any deposit retained at the end of a fixed term that began before April 2007 but ended after that should be treated as falling within Section 213 .

    What however is the correct interpretation of the effect of Section 215 on a Section 21(1)(b) notice ? Arguably, if it was given before the deposit was required to be in an authorised scheme , it is valid . Which seems to be another drafting error .

    I think it can be argued that for this purpose that if a new tenancy has arisen that required the deposit to be protected that the mischief rule ought to require the section to be interpreted as meaning that the notice is to be treated as invalid but I am not all that confident about it.

  6. JS
    Posted 25/05/2009 at 2:53 pm | link to comment

    Sorry tried to edit that without success. I did of course mean the situation where an SPT has since arisen post April 2007 and no proceedings were brought at the time.

    • Posted 25/05/2009 at 3:58 pm | link to comment

      The ‘renewal’ issue has been quite vigorously debated in this post and comments – http://nearlylegal.co.uk/blog/2009/04/tenancy-deposit-renewal-of-tenancy/ and this included views on fixed term to periodic
      For what it is worth, I agree with your view. Others don’t.

      I take the s.215 point. Although given the drafting, I suppose it could also be read to cover any s.21 notice in relation to a tenancy with an unprotected deposit, regardless of whether the s.21 was served prior to the requirement to protect or not. Messy.

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