Tag Archive for 'Tenancy Deposit Scheme'

All mimsy were the borogoves

Published
by
NL
on 28/06/2010
in Assured Shorthold tenancy, Disrepair, FLW case note and Housing law - All
. 15 Comments

The Jabberwock of the tenancy deposit scheme came whiffling again, in the tulgey wood of Northampton County Court. This time it was the clause that catch to beware of. And there’s a disrepair claim in there too.

Paula O’Brien v Jacqueline Jones & Andrew Alexander (T/A Belvoir Huntingdon). Claim No 9KG00335 12/02/2010 [On Lawtel for some reason]

Ms O’B (hereafter B) was the assured shorthold tenant of Ms J (hereafter J), whose managing agent was Mr A (T/A BH) (hereafter ‘the agent’). The tenancy was ended by agreement on 19 December 2008. B had withheld the last two months rent due to her concerns about the condition of the property.

At the time of hearing, and after some amended pleadings, the position was that B claimed against J under s.11 Landlord and Tenant Act 1985 for disrepair. B claimed against J and the agent for an order under s.214(3) Housing Act 2004 for the deposit of £950 and the 3 x payment. J counterclaimed for the last two months rent, which was not opposed by B, save for a set off.

No dispute was raised by J or the agent as to whether the deposit was returnable, save for a set off against the rent claim. The Agent also conceded that any order under s.214(3) could be against landlord and agent (although the Court took the view that such liability for the agent was far from clear).

The deposit was protected with The Dispute Service and had been protected by the agent within 14 days of receipt.

What was at issue and formed the basis of B’s claim under s.214 was that the information provided by the landlord did not meet the requirements of s.213(5); and/or that the landlord had not complied with the initial requirements of The Dispute Service under s.213(3).

Under s.213(5), B argued that the landlord had failed to provide a personal address and telephone number under the prescribed information. The landlord had provided an address and phone number in the tenancy agreement, pursuant to s.48 Landlord and Tenant Act 1987. The address was the agent’s address. B argued that the Housing (Tenancy Deposits)(Prescribed Information) Order 2007 required a personal address for the landlord. The landlord had in fact provided a personal address before B made her application, and, in agreement with HHJ Bullimore in Harvey v Bamforth (our report here), there is no breach where the prescribed information is provided after 14 days but before and application was made by the tenant. But in any event, it was not found that a failure to provide a personal address rather than an agent’s or business address was a breach. The Order did not provide that it must be a residential address if that is different to an address for notice and service under s.48(1) L&T 1987.

Under s.213(3), B argued that the tenancy agreement did not comply with the initial requirements of the TDS scheme in that the TDS required their ‘members’ to include certain specified clauses (the ‘G Clauses’) and these were not in her tenancy agreement.

J and the agent argued that including the clauses, or the information they contained, in other documentation was sufficient. B had had the tenancy agreement, inventory, prescribed information and a leaflet called ‘What is the Tenancy Deposit Scheme’, (this leaflet was unfortunately not in the evidence). B had also requested from TDS the content of the G Clauses and had been provided with them by TDS.

The Court found that the information that had been provided was also to be provided under the TDS initial requirements, so seemed unlikely to by itself remedy the lack of the G Clauses. The provisions on the G Clauses in the TDS rules of membership were clear – the clauses were to be included in the tenancy agreement and their wording was not to be changed or amended. TDS had apparently confirmed in correspondence with J and the agent that they considered that the tenancy agreement was in breach of their conditions, although they did protect the deposit. It was not clear, as argued by J and the agent, that the issue was a mere technicality and didn’t prejudice B, as the G Clauses did contain significant information and further, the TDS had stated that due to the breach, their arbitration service would not be available.

S.214(2) was engaged. Contrary to the argument of J and the agent that the words ‘as the court thinks fit’ in s.214(3) meant a discretion as to whether to make any order at all, the only alternatives were to order return or protection of the deposit. The deposit had been registered, but could not be dealt with under the TDS dispute resolution scheme. Ordering the return of the deposit was the only viable option. Having made such an order under s.214(3) an order for the 3 x penalty must be made under s.214(4) – so the order was for a payment of £3,800 to B.

On the disrepair, the items complained of that engaged s.11 Landlord and Tenant Act 1985 and that had caused loss of enjoyment and inconvenience were:

  • Rising damp to one wall of the dining room with raised wallpaper and some damp spotting, sufficiently serious to require remedial action. Complained of in August 2008, should have been remedied by October 2008 at the latest, so damages for a period of two months, albeit that the inconvenience was relatively minor.
  • No hot water due to a defective boiler following a leak. The boiler was off for a week and should have been repaired within 4 days, so damages for the remaining 3 days.
  • Kitchen floor, damaged in the boiler leak. Part of the kitchen floor was removed and not replaced in early October 2008. J and the agent argued that the delay in repairing was due to difficulties with the insurers, who would not authorise works for over a month. This was not a valid reason for delay. It was not reasonable to wait for the insurers to deal with the claim. Damages for a period of 7 weeks.
  • Kitchen door – the frame was pushed out of the wall by the expanding floor boards due to the boiler leak, leaving a gap between frame and wall. There were no drafts or water penetration, so the inconvenience was solely not being able to use the door, which was a minor inconvenience as there was another door to the garden. 7 weeks damages.
  • Boiler and wiring left exposed after works. J’s enjoyment affected as she had to take care to ensure the safety of her children while in the kitchen.
  • Boiler debris and loose decking. Boiler parts were left on the outside decking and a piece of decking had been left out of place. Both were at best minor inconveniences. The boiler parts could have been moved by B.

All together, damages for disrepair assessed at £500. Rent was £950 per month and the longest period of damages – the damp – was two months.

The remainder of the items claimed by B were either not capable of being disrepair under s.11, had not been reported and/or had caused no inconvenience.

The set off of £1700 in unpaid rent against the awards to the tenant had been agreed by the parties.

Comment
Apart from the disrepair claim being an illustration of how tenants tend to routinely over value claims – B’s view was the withholding the last two months rent was an appropriate recompense for her inconvenience – this is an interesting (although County Court DJ and non-binding) decision on the meaning of ‘complying with the initial requirements of the scheme’. While Harvey v Bamforth on late compliance in providing the prescribed information is expressly agreed with, it appears in this case that a breach of a Scheme’s requirements for something like the terms of a tenancy agreement could fall foul of ‘the initial requirements of the scheme’ and be non-remediable at a later point.

However, how such a breach is to be discovered is another matter. B’s evidence, entirely reasonably, was that she was unaware that there had been such a breach. Unless the other documentation provided to the tenant sets out the requirements of the Scheme for its members, or the required inclusions such as the G Clauses here, how is the tenant to realise that there has been a breach, unless or until the Scheme refuses to provide the arbitration? B apparently discovered the omission only at the end of the tenancy when she approached the TDS about their dispute resolution scheme, only to be told that the omission meant TDS could not deal with the dispute.

In short, what this looks like raising is a form of breach with is both irremediable by the landlord and unlikely to be discovered by the tenant until the Scheme refuses to provide arbitration services – at or after the end of the tenancy. So, yet another Jubjub bird to beware of in the Housing Act 2004 provisions, or is it a frumious Bandersnatch to shun?

(I do wonder why the landlord didn’t simply return the deposit in full and then seek to argue that no order under s.214(3) could be made, so no award under s.214(4), but perhaps the TDS would not allow that once proceedings had begun.)

For all tenancy deposit scheme posts, click here.

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Waiting For Tiensia

Published
by
David Smith
on 17/06/2010
in Assured Shorthold tenancy, FLW case note, Housing law - All and Possession
. 5 Comments

Qurat-Ul-Ain Zia v Mourtada Central London County Court 09/02/2010

This case in Central London County Court has been reported briefly in Legal Action [but we have had the transcript - NL]. While this post makes reference to the Tiensia case this matter actually concerns an issue which will probably not be dealt with by the Court of Appeal. Specifically, it deals with the question of whether a tenancy deposit taken prior to the introduction of the tenancy deposit protection schema should be placed into protection on the renewal of a tenancy.

Facts
The facts are simple. A number of consecutive tenancies had been entered into between Q and M, the most recent commencing on 6 December 2008. The tenancy agreement for this tenancy made reference to a deposit of £1400 described in the agreement with the words “Deposit £1,400 (already held)”. A further clause in the agreement made provision for the payment of a deposit by M to Q to hold for the term. This clause apparently was a reference to the deposit already held by Q. M fell into arrears of rent and Q issued a notice under section 8 of the Housing Act 1988 for possession. M counter-claimed for the usual penalties for an unprotected deposit to be offset against the arrears of rent.

Received
The argument revolves around the wording of s213(4) of Housing Act 2004 which states that a tenancy deposit taken in relation to an AST must be dealt with in accordance with the legislation “as from the time it is received”. For M it was contended that the money was received anew each time the tenancy was renewed. Q argued that the word ‘received’ should be given its natural meaning and the deposit monies were not received in December 2008 but much earlier, prior to the introduction of the requirement to protect in April 2007.

Judgement
The Court was not prepared to follow the arguments advanced for Q. It was held that the deposit, while not physically repaid and paid again at each tenancy renewal was, nonetheless, received anew each time. The Court drew a distinction between the “nature and function” of the monies and the manner in which they had physically been held. Accordingly, it was held that the deposit had been ‘received’ in December 2008, had not been properly protected, and therefore judgement was given for M for the usual penalty of three times the deposit.

Discussion
With respect to the Court (and possibly courting the opprobrium of he masses) I am going to suggest that this decision is incorrect. If we consider the ruling of Longmore LJ in the Court of Appeal decision in UK Housing Alliance v Francis (which we discussed here) he states that the Act contains a “pervading reference to money ‘paid’ by the tenant to the landlord, ‘received’ by the landlord and ‘repayable’ by the landlord to the tenant”. Admittedly this judgement was given in reference to a situation in which the tenant had never transferred any money to the landlord but had had a sum that was potentially due withheld. However, this reference to payment as highlighted by Longmore LJ would seem to require a transfer of monies at each stage. It is clearly not the case that M paid money to Q on each renewal and therefore I would venture to suggest that the suggestion that there is a form of virtual receipt on each renewal is an overly strained construction.

With thanks to Alan Mullem at Moss Beachley Mullem & Coleman for the copy of the full judgement.

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Tenancy Deposits- A Novel Argument on Hold

Published
by
David Smith
on 01/06/2010
in Assured Shorthold tenancy, FLW case note and Housing law - All
. 12 Comments

Hashemi & Johnson v Gladehurst Properties Ltd, HHJ Cryan, Clerkenwell & Shoreditch County Court, 9 December 2009, Unreported

This matter is by way of an appeal from a decision of DJ Stary refusing to set aside a decision of DJ Manners to strike out the Claimants claim for the usual penalty of three times the deposit pursuant to s214 of the Housing Act 2004 as a response to the Defendants failure to register it with an approved scheme.

The tenancy agreement had implied that the deposit would be registered but it required the Claimants to request this and pay an additional administrative fee. They did not do so and the deposit was never registered. The Claimants vacated the property in 2008 and after the Defendant made deductions from their deposit they commenced a claim for the return of the deducted money plus the normal three times the deposit figure.

The claim had a number of procedural issues. For one, although there were two tenants, and therefore two Claimants, only one of them, Mr Hashemi, appeared to be bringing the claim, Mr Johnson apparently having returned to America. By the time of the hearing before HHJ Cryan J had produced a witness statement which appeared to make H his agent in the case, however the precise nature of the relationship and the consnet given was not clear.

Perhaps the most interesting aspect of this case is the differing views of the tenancy deposit provisions on the part of all three judges involved in this matter.

  • DJ Manners struck out the claim on the basis that the tenancy had ended before the application was made.
  • DJ Stary refused to overturn the decision of DJ Manners on the basis that the Claimants had acted unfairly by not notifying the Defendant during the tenancy of its failure to protect the deposit when it might have been able to remedy the situation. DJ Stary also seemed to feel that she had a degree of discretion in the making of any order in regard to an unprotected deposit, something not provided for in the Act.
  • Finally, HHJ Cryan, set aside the decision of DJ Stary. He got the law right but still made an error, albeit a trivial one, in stating that there were two custodial deposit schemes and one insured scheme as opposed to the other way around. He dismissed the argument advanced for the landlord that as the Act stated that the application could be made by ‘the tenant’ it could only be made during the currency of the tenancy and not after it had ended.

HHJ Cryan has restored the claim for the Defendant. We understand that there is a permission to appeal request pending in the Court of Appeal but that this has been stayed until after the decision in the conjoined matters of Universal Estates v Tiensia and Honeysuckle Properties v Fletcher.

This case is interesting in respect of the argument that the tenant can only claim during the lifetime of the tenancy which was dismissed; the suggestion by DJ Stary that a tenant should not deliberately wait until after the end of the tenancy to ‘ambush’ the landlord with a claim, also dismissed; and finally the suggestion that where there are joint tenants they must make the claim together, a point which was not decided due to the involvement of the second tenant by the time of the appeal but one which has apparently swayed judges in other County Courts.

The full judgement can be found here.

With thanks to William Ford of Osbornes who provided a copy of the judgement.

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Two weeks, three months, whatever. TDS in the High Court.

Published
by
NL
on 12/02/2010
in Assured Shorthold tenancy, FLW case note and Housing law - All
. 22 Comments

Draycott & Draycott -v- Hannells Letting Limited [2010] EWHC 217 (QB)

This is the first High Court judgment on the tenancy deposit scheme element of the Housing Act 2004 and thus the first that is binding on all lower (County) Courts. This is therefore a significant decision.

This was an appeal by Hannells from a Circuit Judge decision. The Draycotts had entered into a 12 month AST with Derby Build Ltd (the landlords) on 28 February 2008. A deposit of £2,700 was paid to the agents, Hannells, who, according to the tenancy agreement, were to hold the deposit as stakeholder. The deposit was credited on 4 March 2008. The deposit was not registered with the DPS until 19 May 2008 and the Draycotts informed of the details on 21 May 2008. On 27 November 2008, the Draycotts brought a claim under s.214 Housing Act 2004 on the basis that the deposit had not being registered and information given within 14 days of it being received. The claim was brought against the agents.

At first instance, the Circuit Judge held that the claim could be brought against the agents on the basis that the definition in s.212(9) ‘references to a landlord include references to a person or persons acting on his or their behalf in relation to the tenancies’ [my paraphrase] applied to s.214(4), the requirement to pay three times the deposit. The Circuit Judge also held that s.213 meant that the deposit had ‘to be dealt with in accordance with an authorised scheme from the time it was first received’ and s.213(3) did impose a 14 day requirement. Accordingly he awarded the 3x penalty, observing that to do otherwise would permit an unscrupulous landlord to simply avoid a scheme until a claim was made, then comply, ‘driving a coach and horses’ through the Act.

On appeal, there were two main issues:

i) Whether an agent can be pursued for the 3 x deposit penalty under s214 due to the deposit being unregistered; and

ii) Whether the penalties under s214 take effect after a failure to comply with the 14 days requirement or only if the deposit is unregistered when the claim comes to court.

Mr Justice Tugendhat held:

On i) the words of s.212(9) are clear and unambiguous, with no need to consider extraneous material. The words ‘the person who appears to the court to be holding the deposit’ in s.214(3)(a) are not otiose, but rather limit the scope of a possible order to the person holding the deposit and exclude anyone else who might be defined as falling under the term ‘landlord’. S.214(4) has no such limitation, it is penal and the penalty is imposed on the person who is responsible for the failure to comply with s.213 and protect the deposit. Where the failure was the agent’s, there was no reason why they should not have a s.214(4) claim brought against them.

On ii) while a failure to pay a deposit into a scheme is certainly a breach of s.213(4), it cannot simply be equated with the requirement to protect the deposit within 14 days of receipt.

“The requirement that there be payment into the Scheme is the initial requirement of the the Scheme, and not the requirement that it be done within 14 days. The time limit of 14 days is a requirement of s.213(3)”.

For s.214 to bite, the requirement is that ‘the initial requirements of the Scheme’ have not been complied with, so the breach is governed by s.213(4), which states

For the purposes of this section “the initial requirements of an authorised scheme are such requirements imposed by the scheme as fall to be complied with by a landlord on receiving such a tenancy deposit.

So ‘initial requirements’ do not necessarily include the 14 days unless required by the Scheme itself, and the DPS scheme, at this time, did not impose a 14 day requirement, although it did state that the landlord or agent was responsible for ensuring that the deposit was submitted for protection within 14 days of receipt.

Once a deposit had been lodged with the Scheme, and, on the basis above, the initial requirements complied with at least before the hearing of a claim, the Court could not make an order under s.214(4).

S.214(2)(a) states that an order under s.214(3) and (4) is triggered if ‘the court is satisfied that [the initial] requirements [of an authorised scheme] have not … been complied with in relation to the deposit’. Accordingly, if the deposit can be and is protected in accordance with the initial requirements at any point before the hearing of the claim, the claim under s.214(4) must fail, although if the deposit was unprotected at issue of the claim the landlord faces an order for those costs. [para 51]

To the objection that this leaves the unscrupulous landlord free of penalty, there is the counter view that s.215 is untouched. It is not possible for the landlord to serve a valid s.21 Notice until the deposit is protected.

Appeal allowed on this issue.

Where does this leave us?

Firstly, the agent point is quite clear and I’d say, entirely correct in terms of the meaning of s.212(9). Agents are potentially liable if they are the ones handling the deposit and who failed to put it in a scheme.

The late compliance point is not as straightforward as it looks at first reading. The finding here is that there is no requirement within the terms of the Housing Act 2004 itself that the deposit must be protected within 14 days of receipt that will incur the 3 x penalty. Thus, in terms of the Housing Act 2004 by itself, late compliance up to the very doors of court is possible and will allow the landlord to avoid a 3 x deposit penalty.

But does this mean that landlords (and agents) are home free on the late compliance point? No. While there is no 14 day requirement in the Act, the requirement is to comply with the initial requirements of an authorised scheme. Failure to do that may well trigger the 3 x penalty. The question then is what are the initial requirements of the scheme?

The initial requirements of the specific scheme in this case – the DPS scheme in March to May 2008 – did not include a requirement for submission within 14 days of receipt by the landlord/agent. But what if the specific scheme that was used did include such a requirement at the time the deposit was received? On the analysis here, s.214(4) might be be triggered by any delay over 14 days. Or is it the requirements in force for a scheme when the deposit is submitted to it? After all, when a deposit is not being paid into a scheme, which of the schemes’ requirements are potentially not being complied with?

Compliance with a scheme’s requirements is one of the issues at stake in the Tiensia case [reports here and here] which is due to be heard in the Court of Appeal next month.

We may have had clarity on one point, only to open up a new layer of complexity. What were the specific initial requirements of the authorised scheme at the time? And is that the time the deposit was received or submitted to the scheme? And if received, then the requirements of which scheme?

In the meantime, this has made s.214(4) 3 x deposit claims very difficult for tenants – if late compliance is enough to defeat the claim under the Housing Act 2004 – and, for the moment at least, any legal representation for the claimant tenant will have to be paid in full, because a CFA on a claim that can be defeated at the landlord’s whim is a non-starter.

By the way, Painsmiths acted for the appellant and we have had good reason to link to Painsmith’s blog often in the past.

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Tenancy Deposit – renewal of tenancy again

Published
by
NL
on 01/02/2010
in Assured Shorthold tenancy, FLW case note and Housing law - All
. 3 Comments

Bihari v House Trader (UK ) Limited. 14 January 2010, Central London County Court

While we wait for the forthcoming High Court and Court of Appeal decisions in tenancy deposit cases, here is a tenancy deposit appeal, but, alas, only to a Circuit Judge, so not binding.

Mr B rented a two bed property from September 2006 and paid the deposit of £850.00 in respect of that AST in September 2006. The AST was renewed in September 2007 and the landlord/agent House Trader (UK) Limited did not protect the deposit after renewing the tenancy. The landlord rejected Mr B’s representations that it should be protected and the claim came to Uxbridge County Court. At first instance, the District Judge accepted the landlord’s argument that s.212-214 Housing Act 2004 did not apply to renewed tenancies where the deposit had initally been paid before April 2007.

HHJ Faber at Central London County Court allowed the tenant’s appeal, apparently on the basis that there was a deposit paid in relation to the premises and there was a post April 2007 tenancy agreement stating that a deposit had been paid in respect of that tenancy. The landlord was ordered to pay £3400, being the deposit and 3 x penalty.

Mr B was not legally represented, the appeal being conducted with help from a housing support worker, citing previous circuit Judge decisions in Saad v Hogan, Brentford County Court 16 February 2009, and Coutinho v Atkinson, April 2009, Clerkenwell & Shoreditch County Court. Good work there, and thanks to Diana Ambrusne-Szoke for the details.

Now we wait eagerly to see what a higher court or two makes of the issues.

[For all tenancy deposit case posts click here]

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Tenancy Deposit Protection on Sale and Leaseback

Published
by
David Smith
on 29/01/2010
in Assured Shorthold tenancy, FLW case note and Possession
. 5 Comments

UK Housing Alliance (North West) Ltd v Michael John Francis, Grimsby County Court, 18 June 2009, unreported

An interesting case this involving issues of tenancy deposit protection, contractual penalties and the Unfair Terms in Consumer Contract Regulations 1999.

UK purchased a house in Grimsby from F in October 2007. They let it back to him on an Assured Shorthold Tenancy for a term of ten years at a rental of £520.83 pcm with annual increases of 5%. The purchase price was £125,000 to be paid in two tranches – the first, in the sum of £87,500 to be paid on completion while the second, of £37,500, on the giving up of possession at the end of the 10 year term. F would not receive the final payment if UK terminated the tenancy under their rights to do so or if he terminated it himself during the first 6 years. If F terminated after that point he would receive a percentage of the final sum on a sliding scale. F fell into arrears and possession proceedings were taken under the usual grounds as set out in Schedule II of the Housing Act 1988. After several adjournments the matter eventually came before Ms Recorder Stocken.

F, through Counsel, advanced three arguments:

  1. The final payment constituted a tenancy deposit as defined by s213 of the Housing Act 2004.
  2. The ability to withhold the final payment was a contractual penalty and was therefore unenforceable under the principles laid down in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1914] UKHL 1.
  3. The provisions of the agreement were unfair pursuant to the Unfair Terms in Consumer Contracts Regulations 1999

To work in reverse order. The Recorder was satisfied that all the terms of the agreement were in plain language and further found that F had been legally represented at the time of entering into the agreement. She was not, therefore, prepared to find the agreement to be unfair.
The Recorder also did not accept that the power to withhold the final payment constituted an unenforceable penalty. She found that the amount of the final payment was similar to the rent that would have been payable in the last four years of the tenancy and therefore found the final payment to be a reasonable estimate of loss and not a penalty.
Turning to the deposit point. The Recorder considered the wording of s212 and particularly the definition of a deposit as:

money intended to be held (by the landlord or otherwise) as security for—
(a) the performance of any obligations of the tenant, or
(b) the discharge of any liability of his

F argued that the deposit was paid in ‘money’s worth’ by the holding back of the final payment and that this final payment was designed as security for the tenant paying his rent and keeping to the terms of the tenancy. The Recorder did not accept this. She found that the final payment could be lost not just through failure to keep to the terms of the tenancy but also by the agreed right of F to terminate the lease after 6 years. After that date the deposit would also, in effect, change in value as F became entitled to receive more of it after termination. Further, the agreement contained no mention of the deposit. Finally sections 213 and 214 of the Act make mention of the deposit having been paid and repaid. The Recorder was not prepared to accept that monies had, in fact, been paid and considered that the attempt to define the final payment in this way was a “strain of the language”.

F accordingly had a possession order made against him. However, permission to appeal was granted and we understand that this matter is to come before the Court of Appeal on the 8th or 9th of February 2010 making it the first tenancy deposit matter to reach that Court.

[by NL - our thanks to Neil Wylie, Counsel for the Defendant/Appellant for letting us know about this case.]

[For all tenancy deposit case posts click here]

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Catching up with LAG

Published
by
NL
on 16/01/2010
in Assured Shorthold tenancy, Disrepair, FLW case note, Housing law - All, Introductory and Demoted tenancies, Unlawful eviction and harassment and assured-tenancy
. 6 Comments

The January 2010 Housing updates in Legal Action have some County Court case reports that hadn’t reached us. You will naturally have already read them in Legal Action, but for our archives…

Tenancy Deposits
O’Brien v Hill Barnet County Court 22/09/2009
Mr O’Brien granted Mr Hill a 12 month AST on 9 June 2008. He served a s.21 Notice on 12 June 2008. On 2 July 2008, the landlord received the payment of the deposit from Barnet Council, which had agreed to pay the deposit on Mr Hill’s behalf, and the deposit was protected on 7 July 2008. Some time later Mr O’Brien brought accelerated possession proceedings relying on the June 2008 s.21. Mr Hill defended on the basis that the s.21 was invalid as at the time it was served there had not been compliance with s.213 Housing Act 2004.

DJ Silverman ordered that the claim be struck out on the basis that the s.21 was invalid, but gave the Claimant permission to restore the claim if he thought that the order should not have been made (!). Unsurprisingly, Mr O’Brien did apply to restore the claim and this time DJ Silverman made a possession order, accepting that no deposit had been received at the time of service of the s.21 and that therefore s.213 did not apply.

This surely has to be the right decision and the first strike out order is frankly a bit odd. It appears DJ Silverman wasn’t entirely happy with it at the time either.

Harassment and Unlawful Eviction Quantum
Odera v Iqbal Luton County Court 3 September 2009
The Claimant had an AST of a room in a three bedroom house with shared facilities, where she lived with her 11 year old daughter. The landlord allegedly harassed her throughout the tenancy by entering without warning. In January 2008, he gave her a defective Notice. The Claimant began looking for alternative accommodation. On 17 February, she backed her belongings and told the Defendant landlord she was on her way to pick up keys for new accommodation. The new landlord refused to give her the keys unless she handed over the full deposit. She returned to the premises. Later that evening, the Defendant and another man removed her belongings and put them outside the property. The Defendant dragged the Claimant and her daughter out of the bedroom, down the stairs and out the property. The police were called but accepted the Defendants word that the Claimant had no right to remain. The police asked the Defendant to store the Claimant’s belongings until the next day (Top work there, Luton constabulary). The Claimant stayed in emergency accommodation, then for 3 days with her sister in Watford. When she returned to pick up her belongings, she found them discarded in the back garden, soaked and rain damaged.

At trial, the Claimant’s evidence was accepted. Damages:
£500 for breach of covenant of quiet enjoyment and trespass for the two weeks prior to the eviction.
£1000 for the assault and method of eviction.
£1500 aggravated damages, particularly in view of Claimant’s daughter witnessing the assault and being assaulted.
£1000 exemplary damages as the landlord sought to increase his income by letting the property as a whole.
An inquiry into special damages – later settled at £750.

Cashmere v Walsh, Downing and Veale Central London County Court 27 October 2009
The Claimant had an assured tenancy of a flat in Docklands from 1990. In 2000, Downing bought the flat as bare trustee for Walsh. Veale was Downing’s mother and a business associate of Walsh.

Between 2000 and 2003 there was minor disrepair at the flat (defective light fitting, non functioning storage heater). There was further disrepair from 2003 onwards – a further non-functioning heater, broken handle on the toilet cistern following a refurbishment of the bathroom, and poor floor covering in the bathroom. The Claimant began spending more time at his girlfriend’s home. Downing and Veal promised to carry out repairs. In December 2007 they asked the Claimant to move out for the duration of works. The Claimant moved out and allowed the landlord to clear the flat of his belongings which were piled in the corridor. The works were completed in a week, including a new front door and lock. When the Claimant asked for a copy of the key he was told he could not have it because there were rent arrears. After being turned away by the Defendants on several occasions, the Claimant engaged solicitors. Pre-action letters received a response from Walsh saying that he was now the owner of the flat and had a new tenant in. On this basis an application for re-entry was not made. The annual rent was £10,920

On a claim for damages, the Court acknowledged that there were ‘historic’ rent arrears of about £7,000 and that the Claimant had caused noise nuisance to his neighbours, but neither of these were the reason for the eviction. The Defendants had chased housing benefit, it was not until the locks had been changed that they demanded payment from the Claimant personally. The true reason for the eviction was the desire to sell the flat, which was achieved after the eviction. Damages under s.27 and s.28 Housing Act 1988 were appropriate, without deduction under s.27(7)(a). Damages on this head £47,000 against Walsh.
Disrepair – £9,200 (4% of rent for the first 3 years; 15% of rent for the next 5 years).
£8,000 against Downing and Veal for their part in the deception and the refusal to hand over keys, which amounted to trespass. The Claimant had taken over 18 months to find suitable alternative accommodation.
£500 for failure to return a deposit.
£6,515 against Walsh and Downing for the loss of the Claimant’s belongings, which were never recovered.
Aggravated damages of £10,000 against all three Defendants. The Claimant had been duped into handing over the keys, even assisting in the removal of his belongings. His belongings had been dumped and the Defendants never told the Claimant where they were. The Defendants has lied about the whereabouts of the belongings to the Claimant’s solicitors, had denied the eviction and denied control over the flat at the relevant time. They had also lied about a new tenant being in place.

Introductory Tenancies
Plymouth City Council v Hill Exeter County Court, 6 November 2009
Mr & Mrs Hill were introductory tenants. Following a valid s.128 Housing Act 1996 notice on grounds of rent arrears, a possession order was made. Plymouth applied for a warrant and a bailiff’s appointment was set. The Hill’s sought further time to pay the arrears and applied to suspend the warrant. A DJ ordered the warrant to lie on the file, as an administrative act. There were two further applications for bailiff’s appointments, two further applications to suspend and two further orders that the warrant lie on the file. At a further hearing, some 5 months after the date of possession, the DJ ordered that the warrant lie on the file for 21 days pursuant to his powers under s.123 County Courts Act 1984. Plymouth appealed on the basis that the power to order the warrant lie on file did not exist, or if it did, the DJ could not suspend execution of the warrant beyond the 6 week period specified in s.89 Housing Act 1980.

Held by the Circuit Judge:
The Court could hear the appeal although the outcome was now academic.
The DJ was exercising a judicial power, not an administrative one.
The power to order that the warrant lie on file in this case did not exist.
The correct power was the one to suspend and this was limited to being up to 6 weeks under s.89 HA 1980 and there was no judicial or administrative power to delay it after that time.

As ever, thanks to Jan Luba QC and HHJ Madge for the updates.

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Tenancy Deposit – Tiensia revisited

Published
by
NL
on 22/11/2009
in Assured Shorthold tenancy, FLW case note and Housing law - All
. 9 Comments

We reported the County Court hearing of Universal Estates v Tiensia in this post. Since then we have heard of developments in this case, with a tantalising hint of a higher court judgment in the offing.

Tiensia at County Court first instance found that late compliance in protecting the deposit and sending the required information was not ‘complying with the initial requirements of the scheme’ (s.213 HA 2004) because the requirements of the scheme itself, Tenancy Deposit Solutions Limited, required this to be done within 14 days of receiving the deposit (and, apparently, also so did s.213).

Now it turns out that Universal Estates appealed, presumably to the Circuit Judge. The appeal was granted on the basis that the sanctions in s.214(3) and (4) don’t apply where the landlord has complied with the requirements of the scheme, and provided the information to the tenant, by the date of the hearing of the HA 2004 claim.

Apparently the Court of Appeal has granted permission for a second appeal. This means this issue might finally get in front of a court of record.

I know nothing further, so all information gratefully received.

[For all tenancy deposit case posts click here]

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Tenancy deposit – late compliance again

Published
by
NL
on 07/11/2009
in Assured Shorthold tenancy, FLW case note and Housing law - All
. 20 Comments

Da Costa v Pinter Bromley County Court April 2008

With thanks to the November Legal Action housing updates. This was a tenancy deposit and 3 x deposit penalty claim. The rent was £1,950 a month. The tenancy agreement also stated ‘Payment required in advance of £4,200′. The invoice from the landlords agents said that of this, £2,250 was ‘a deposit’.

At the end of the tenancy, the deposit was requested by the tenant, but not returned. There was also no trace that the deposit had been protected in one of the schemes. The tenant brought a claim for deposit and the penalty. After the issue of proceedings, but before the hearing, the deposit was put into one of the schemes and details provided to the tenant.

DJ Burn ordered return of the deposit and the 3 x penalty. The DJ stated:

The purpose of the Act is to try to ensure that landlords secure tenancy deposits in a recognised deposit scheme at the start of the tenancy, so that the deposit can be returned to tenants quickly when the tenancy ends, and that disputes about the deposit can be resolved under the schemes’ procedures without the need for court proceedings.

Landlords who describe a deposit as something else, who do not secure it promptly in a deposit scheme as required by the Act, then fail to return the deposit when the tenant leaves (especially if this is without good cause, thereby forcing the tenant to start court proceedings to recover the money) but who then at the last minute after the tenant issues proceedings, pay the deposit into a scheme, are clearly flouting the spirit of the legislation and, on my interpretation, the letter also.

If the s213 and s214 remedies are not applied in a case such as the instant one, the Act would be rendered virtually toothless when landlords flout its provisions.

We are, of course, still in the land of the County Court lottery on the late compliance issue. None of these cases are binding on other courts. Harvey v Bamforth went one way and other cases, including this one, have gone the other. There does seem to be a distinct view on the spirit and purpose of the legislation emerging, through which the, to put it charitably, ambiguities of the Housing Act 2004 are viewed. But until we have a higher court judgment on the issue, there is no certainty.

[For all tenancy deposit case posts click here]

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Bits from August LAG 1: Tenancy Deposits

Published
by
NL
on 11/08/2009
in Assured Shorthold tenancy, FLW case note and Housing law - All
. 26 Comments

As ever, the lovely Legal Action housing updates have some interesting County Court cases that hadn’t reached us. A couple in the August edition concern tenancy deposit cases. Nothing binding (and when will some of these cases reach a higher court?), but interesting.

Woods v Harrington, Haverfordwest County Court. 19 May 2009. Ms Woods had a 12 month AST from May 2008. The tenancy agreement stated that there was a £600 deposit ‘as security for the faithful performance of the terms of the lease’. The deposit was not paid into a scheme. During the 12 month term, Ms Harrington, the landlord agreed to accept notice to terminate the tenancy early and possession was given in March 2009. The deposit was not returned. After two weeks, Ms Woods issued proceedings for the return of the deposit, without warning. Ms Harrington counterclaimed for damage and paid the deposit into a scheme in April 2009. At trial, the DJ noted that the requirements of s.213 Housing Act 2004 had not been met during the life of the tenancy. The late payment was made in the hope of avoiding the repercussions of s.214. This was not only contrary to the letter of the law but its spirit and the public policy it embodied. Parliament could not have intended that a landlord could ignore the legislation then avoid its effects by late compliance after the end of the tenancy. Return of the deposit and 3 times deposit payment ordered and directions given on landlord’s counterclaim.

This is one of a number of cases now where the County Court judges have taken the view that late compliance is not sufficient, in this case specifically compliance after the end of the tenancy. It is still a lottery, of course.

Delicata v Sandberg, Central London County Court. 2 June 2009. Ms Sandberg was granted a 12 month AST in July 2007. The deposit was not protected until August 2007. The landlord had served a s.21 notice on the same day the tenancy agreement was signed. In April 2008, Ms Sandberg was sent to prison. She had notified the landlord in advance. While she was in prison and without warning to her, the landlord issued accelerated possession proceedings relying on the s.21 notice from July 2007. A possession order was obtained and then in April 2009 a warrant of possession, both while Ms Sandberg was in prison and without her having been served with papers there. She returned to the flat on her release in May 2009. The landlord applied for a warrant of restitution. At court, the DJ accepted that the possession order should be set aside. The landlord could not rely on a s.21 notice served while the deposit was not protected – s.215(1) Housing Act 2004 – as it was invalid.

This may be quite an extreme case, but confirms what we have always said. A s.21 notice served with the tenancy agreement is invalid unless the deposit has been received and protected beforehand, which is unusual.

[For all tenancy deposit posts, click here.]

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