Deposit scheme mandatory award

Just a quick note to say that Housed has a report on a County Court judgment on a claim for failure to put deposit in scheme and notify tenant within 14 days. (Stankova v. Glassonbury 10th March 2008, Gloucester County Court. Initial report apparently via Consumer Action, no reference or link)

Result – mandatory 3 x deposit award, with no set off against arrears (because mandatory). It didn’t matter that the landlord had very belatedly put the deposit in a scheme, or that the tenant had left after s.21 notice, or that that the landlord raised deductions from the deposit at Court. The court was apparently persuaded that deductions were irrelevant on the basis that a statutory scheme included arbitration for disputes about returning or retaining deposit monies. Apparently the DJ wasn’t happy making the award but found he could do no other.

There is an unaddressed issue about validity of an s.21 Notice, as the tenants had moved out.

Thanks Housed. Useful stuff for many tenants.

[For all tenancy deposit case posts click here]

About Giles Peaker

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 +.
Posted in Assured Shorthold tenancy, Deposits, Housing law - All and tagged , , , , .

43 Comments

  1. There is an interesting contrast betwen this judgement and article just posted to Property Law (subscription website) -“Tenancy Deposit Schemes”. That article suggests landlord may escape sanction if s/he complies before hearing.

  2. Who is the article by?

    I’d admit that I wasn’t clear on this point myself, although I’d have thought the landlord would have a stronger case if they complied before issue, rather than hearing. We appear to have a County Court judgment that late compliance makes no odds, but I would like to see an authoritative judgment, otherwise, it may be a lottery by District Judge. Given the nature of the beast, this higher court case is unlikely to happen, though.

  3. There is support for the view that Parliament intended that the sanction of payment of three times the deposit would only apply where the landlord has not complied by protecting the deposit before the hearing. Para 84 of the Explanatory Memorandum to The Housing (Tenancy Deposits)(Presribed Information) Order 2007 says “If a landlord has not complied with the Act by the time of a court hearing, the court must order him to pay to the tenant an amount equivalent to three times the deposit”. This seems to make more sense and avoids a substantiall windfall for the tenant where the deposit is protected and there is no loss.

  4. Michael,

    Certainly it is an arguable point, although that would leave the landlord free to not use a deposit scheme right up to the point of being notified of a hearing date, with no penalty (save the s.21 notice validity, which itself would only be an issue for possession proceedings). But Stankova was a first order County Court judgment and therefore not binding in any way. No doubt other decisions will go otherwise.

  5. If the deposit is not protected as sson as practicable (with a 14 day grace period) after being collected then the tenant’s money (his deposit) is at risk due to insolvency or whatever of the landlord or agent. So “protecting” it before a hearing is not the comprehensive protection that tenants should expect. The late “protection” does make the deposit subject to arbitration – but that is small consolation.

  6. Both fair points, but if the landlord (although probably not the holding agent) becomes insolvent before the hearing and the deposit is lost, then presumably the penalty itself would also be academic (although it looks like a fine, it is civil, being payable to the injured party). Hopefully the courts will give some guidance as to what the legislation means, but I wonder if it might not have been better to have provided for the tenant to be able to comply with the tenancy agreement simply by paying the deposit directly into one of the authorised schemes.

  7. I agree that the penalty would be academic if the deposit holder became insolvent – but surely the point of the legislation is to protect the tenant’s cash. The chosen route of doing that is to force the landlord to protect it as soon as practicable – within 14 days. And that in itself is quite reasonable and offers a high level of protection as the money is at risk only for 1/12th of the term of say a 6 month AST. If the legisaltion does not in practise force the landlord to protect it in a timely fashion then the legislation is flawed, not the argument.

    In fact, if landlords can legitimately escape the need to protect until they want to issue a Section 21 notice, there is an argument for saying that the whole industry of “deposit protection” will collapse through lack of business.

    We are a reputable lettings agency who have always been scrupulous about tenant’s deposits and the trouble this protection business causes us is immense. We are helpless in the face of a tenant who says “use my deposit for the last month’s rent” (we don’t have it, it is in the DPS scheme and we cannot institute a single claim process until 14 days after the tenancy ends. If we ask the tenant to co-operate in returning the deposit before teh end of the tenancy we are accepting that they are breaching the tenancy agreement which disallows the tenant the use of the deposit for the last month’s rent and that sets entirely the wrong tone for managing the tenancy). Tenants who abandon the tenancy early are just as bad. Again we have to wait for 14 days after the formal end of the tenancy however created. Tenants who die are marginally better if the family of the deceased can find the paperwork and are co-operative.

  8. This is a problem I flagged up at an early stage. The legislation is clearly drafted and, as drafted, only permits the court to impose the 3 x rent penalty if the landlord is in default at the time of the hearing.

    s.215(3) strengthens this conclusion: if the landlord has already paid the money into a scheme, it would be rather odd for the court to have a power to order the landlord to pay the deposit into the custodial scheme (leaving 2xdeposit protected).

    Yes, this means that a cynical landlord is able to abuse the system. There are two caveats to that:

    1. Any s.21 notice will take just that much longer (since the landlord will have to first comply with the requirements and then serve the notice).

    2. If the tenant does sue and the landlord then complies, the tenant ought to get their costs.

    Mind you, clear wording of a statute has never stopped courts from avoiding it to do something they consider “better”. Its quite possible that the courts will decide that (contrary to their drafting) the TDS was intended to provide a much greater protection and that, having failed, a landlord will be permanently at risk of the 3 x deposit fine.

    It will be interesting to see.

  9. What do you think the position would be where a tenant sues a landlord after the expiry of a shorthold assured tenancy for a failure to have protected his deposit during that tenancy?

    Clearly the landlord cannot, at that late stage, put matters right by protecting it, since it has now been returned and this strict liability offence has already been committed.

    Any thoughts?

  10. @Sandy: If I recall, something of this situation was involved in Stankova v Glassonbury, County Court only. That resulted in the mandatory award being made. But that is not a precedent, of course.

  11. One DJ refused to allow the 3x provision to be pleaded as a counterclaim in possession proceedings as he considered that it was a penal provision and was to be construed narrowly. I had argued that the ‘renewal’ of a tenancy after April 2007 where the new tenancy agreement referred to a deposit being carried over fell within the TDS provisions. These are the issues:

    (1) Where there is no physical transfer of funds do the provisions apply. My DJ held they did not as the provisions were penal and had to be construed narrowly.

    (2) Whether the 3x amount can be pleaded as a counterclaim.

    I am planning to issue a stand alone Part 8 Claim once the tenants leave. See what happens. Certainly it appears that we require some appeals to clarify the situation.

  12. Supremo (!) the position on ‘renewal’ of tenancy post April 07 is certainly arguable either way. My view is that it is a new tenancy, and so the deposit provisions are also new, no matter if the landlord already had the money – technically, as it requires the tenant’s consent, the deposit is returned and taken anew. But I have to admit I can see (and could make) the argument otherwise. Not sure what your DJ means by penal, but strict liability would mean careful attention to the exact ‘offence’, I’d have thought.

    The counterclaim issue is interesting. Even if it has to be a separate claim, though, there is a clear argument for a conjoined hearing and set off against arrears, I’d have thought. But surely in those circumstances, the landlord would just put the deposit in a scheme and provide the info?

  13. You see if my argument is not accepted (that a physical movement of the monies is not required) then it open us the possibility of a landlord requiring a payment to be made prior to any tenancy agreement being signed. In other words the landlord could demand a payment up front for which he would promise to offer a tenancy agreement (essentially a collateral contract) and thereby creating a debt in favour of the (future) tenant. The Landlord then offers a tenancy agreement which refers to this debt as being the amount that would be set off against any losses of the landlord sustained under the tenancy agreement.

    Another interesting point is in relation to Ground 8 and 3x deposit amount. Could it be pleaded that the amount owed is below the Ground 8 level by virtue of the 3x amount?

    Your state that the Landlord could rectify the situation by protecting the deposit. The legislation is clear that the initial requirements have to be met. the initial requirements stipulate that the deposit must be protected within 14 days. Either that has been done or it has not. I suspect that the only reason judges are reluctant to apply the law is because they sympathise with the landlords. It is also possible that many judges are also Landlords and do not support this legislation.

    In relation to this point, there is a Lords Hansard entry that apparently states that “…if the court directs a landlord or agent to pay the deposit into a scheme and he refuses, the court must order the landlord to pay the tenant three times the deposit amount…” This is not refelected in the wording of the legislation! Or maybe their Lordships were under a misapprehension as from that text it implies that there would be more than one hearing ie that the Judge orders the depoist to be protected and then at the next hearing makes an Order for 3x deposit.

    Only a matter of time before these issues are dealt with by the Courts.

  14. @Housing Supremo: First, on the physical movement of monies point. As I said, there are arguments to be made on both sides. However, I don’t see your argument, for two reasons. Firstly, any money taken/received as a deposit in respect of the tenancy is caught, regardless of whether it is paid immediately at the commencement or not. Secondly, what you describe is, in effect, a payment of rent in advance. This is not caught under the act, regardless of when it is paid. An advance of rent is not a deposit.

    On 14 days – yes, the requirement is that the deposit is in a scheme within 14 days. But read the legislation very carefully, this is not a trigger for the mandatory award. To avoid the mandatory award the landlord need only comply with the section that says the deposit must be in a scheme and the tenant notified. This must be so by the time of the claim/hearing. There is no penalty for the landlord failing to comply within the initial 14 days – none at all – if the landlord later complies.

    Ground 8? Maybe – counterclaim and set off, along the lines of disrepair, perhaps. But high risk, given the ease with which the landlord can avoid the award. (There is a view, again, one I can see argued both ways, that the relevant date is the date of the hearing, not the date of claim. This makes avoiding the mandatory award trivially easy, if the tenant is still in residence).

    A phrase from a debate in Hansard is pretty much by the by, unless the intent of parliament is seriously unclear. This legislation is badly drafted, but not unclear enough in the relevant sections for this passage to be considered at all.

    I think these issues are going to take quite some time to reach the higher courts, where a meaningful binding precedent can be set. Who is going to fund a bloody expensive appeal or two?

  15. Pingback: Illegal Eviction and Disrepair damages

  16. given the open nature of this blog with agents (see William above) accessing it one is a little bit leary of open comment

  17. I forgot to say that that was a general comment and I cast no aspersions on William or his agency whom i do not know at all

  18. Nikki, this is an open blog for the discussion of housing law matters. It is read by a lot of people involved in the sector. If you feel that you are unable to comment for that reason, then we’re sorry you feel that way. Nobody discusses actual cases that they have under way – or not until they are over and done – so there is no breach of confidentiality, but the issues of law discussed here are hardly private.

  19. I wonder if you can offer a private landlord some advice.

    I took on tenants on housing benefit. The rent payable was £775 pcm and a deposit of £775 was taken. The local council agreed to pay the tenants rent, however this was paid to me in arrears and was sporadic.

    The council paid a deposit of £750, the tenant paid me £25. The council made it clear to me that the £750 should be repaid to the council and not the tenant at the end of the tenancy. I did not pay the deposit monies into the DPS scheme (as i was having cash flow issues due to the late / sporadic payment of rent – although this is clearly no excuse).

    The tenants left my property in a poor state and refused to go through the inventory or return to the property to make right the things highlighted to them. I wrote to the tenants detailing the dilapidations (including photographic evidence) and gave a detailed breakdown of costs i had incurred (including receipts).

    I asked for a response. I have received an e-mail from a firm of solicitors (copied and pasted): We act for the previous tenants of the above property Mr and Mrs J Turner who have forwarded to us copies of your various communications together with your letter of the 23rd October setting out your proposals for dealing with the deposit. We do not propose to discuss these at length since it is very clear that you have failed to comply with the provisions of the Housing Act as regards the requirement both for dealing with the deposit on receipt and also notifying the Tenant within 14days of receipt by you of the deposit as to where you had placed the same. This means that our client because they believe the deposit has not been appropriately safeguarded and /or they have not been given the required information can apply for a Court Order. If the Court finds that you failed to comply with the provisions of the Housing Act it must order you to pay to our client a penalty of three times the deposit ( £2325.00)within fourteen days of the order. The Court has no discretion as it is a mandatory penalty contained in Section 214 of the Housing Act. It follows that there is no appeal mechanism and no plea of mitigation is allowed.

    We are aware that the inventory is also not sufficiently detailed and you failed to follow the correct procedures for checkout including but not limited to harassment during the last week of the Tenancy.

    We must advise you therefore that on a without prejudice basis our client will accept a full refund of the deposit with interest at the rate of 8.75% (£79.11)together with this firms fees of £235.00 (making a total due of £1089.11)within the next seven days failing which our client will seek full redress through the courts

    I have now paid the tenants deposit of £25 into the DPS scheme and also paid the £750 paid by the council into the scheme.

    I would appreciate any advice.

  20. @C Hopwood: I’m sorry, but we can’t offer advice on individual’s situations or their cases via the blog (no liability insurance and no access to the documents means giving advice would be a very bad idea for us and for you). I would suggest getting advice from a solicitor.

  21. Hello to all.

    I am in a critical dilemma. Wanting to know if anyone (ie:nearly legal or similar) would be willing to represent / ADVISE my case pro bono (in the interest of T’s in England and Wales) as it involves being served an invalid section 21 notice – at least, that would be my defence.

    To date, some 7 months after my initial AST agreement (21(1)(b) expires 11th Jan) my LL /EA have NOT registered my deposit and I have 3 emails (Dec’08) from all schemes to support that.

    Obviously, I could say nothing, leave on expiry date and claim the mandatory award some time there after.

    Can’t see the point in using non register / notification of deposit as defence because it affords unscrupulous LL’s & EA’s time to rectify situation before Court Hearing, making a mockery of the legislation. Haven’t got enough expletives at my disposal to do justice to that gaping loophole.

    However, it would be my preference to actually stay in the property as was originally offered to me just 2 wks before being served section 21 (1)(b). My Mother (82) is in very poor health (dying slowly) and I have been co-ordinating / organising both her and Pa’s health, welfare and housing needs, amongst a variety of other things. It’s taking longer than expected and taking it’s toll on me personally. Moving at this juncture, given the above and recovering from my own severe injury (2.5 cm Achiiles Tendon Rupture) is something I don’t have the time or money for, let alone the energy.

    Have lots of legitimate gripes in respect of LL – quiet enjoyment (serious harassment) and obligations in respect to repairs amongst others, but more interested in staying on in property for a few more months as originally agreed- even tho’ LL a MAJOR PAIN. I also understand that I could possibly receive leniency (given distressing situation with Mum) via possible extension from 14 to 56 days should DJ see fit.

    Overall though, I would prefer to respond to any further action served by challenging the validity of the notice, given that my deposit was not secured with any scheme at the exact time notice was served. (I have a receipt for the ‘FEE’ for the INSURANCE of the deposit, but believe that this is possibly a Trading Standards / Criminal matter in respect to Theft / Fraud – assuming that they don’t actually register before expiry of notice!)

    I understand from Shelter and reading various sites (including this) that as yet, NO ONE has challenged the legality of section 21 being served in absence of deposit being registered / insured at exact time of notice being served. As you are all aware there is NO test case or precedent as yet, ANY TAKERS????

    Unfortunately, I don’t qualify for LA but only just. I can imagine most T’s (or other) walk away because it remains that Justice is not about FAIRNESS, as usual it’s about ADVOCACY. Very worrying, that this piece of legislation is being left to interpretation by provincial / parochial / FEUDAL DJ’s.

    I have not informed LL / EA of my discoveries – don’t intend to.

    So, do I leave and take the cash or stay and try to set a precedent?

    • VW, we can’t give advice via the blog, I’m afraid, but I can make some general comments based on what you say.

      You don’t say where you are located, so I doubt there will be many volunteers for pro bono. In any case, the law is pretty straightforward on this – hence no ‘test case’ having emerged or being needed. If the deposit wasn’t in a scheme when the s.21 notice was issued (and the deposit needed to be in a scheme), then the s.21 isn’t valid. If you put that in your defence to a possession claim, then unless the landlord can show the deposit was in a scheme and the required info provided (at least in a manner that you should reasonably have received), then the claim fails.

      It isn’t going to be a big test case, so I don’t think we will be queuing up to do it pro bono, sorry. It is quite possible it won’t even get to trial.

      Whether you leave or stay is entirely up to you. But, should you bring a 3 x deposit claim, it is likely the landlord will put the deposit in a scheme and give you the info. Whether this is sufficient before a hearing but after a claim has been issued has not been decided, even at the lower courts.

    • Regarding NL’s last response, what if the tenant is unsure if the deposit requires registration (due to the landlord renewing an old contract)? Would it be best for the tenant to claim the fine for 3x the deposit before the section 21 notice ends so he’s sure of the defence? Also, if he wins can the landlord still just ussue a further s.21 notice to evict?

    • If the tenancy was renewed after April 2007 (or arguably if it became a periodic tenancy after April 2007) then there is an argument that the s.21 isn’t valid if issued when the deposit is not protected. Whether that argument succeeds depends on the view of the County Court judge involved, at present.

      Whether the tenant wants to bring a 3X claim before a possession claim defence, or at the same time as one, is up to them. Makes no odds to the argument (although it may make a difference to a subsequent 3x deposit claim when it appears that it could have been brought earlier, I suppose).

      Once the deposit has been protected, or is no longer held, then a further and valid s.21 can be issued.

  22. I am a non-practicing solicitor and am also personally dealing with this legislation myself atm. I am quite keen to pursue my claim and would be grateful for the help of other lawyers (with some housing experience!) if anyone is interested.

    My partner and I moved into our London flat end of Oct 08 and it’s been a disaster – LL is clearly broke and a crook. None of the conditions on the lease for works to be done within the first 2 weeks of the tenancy were done until much hassling and several months passed and you should see the ‘repairs’! Central heating didn’t work properly for the first 3.5 weeks and then boiler broke completely meaning no hot water.

    We then got an eviction notice after 3 weeks because LL defaulted on his mortgage (obviously well before we moved in). We had 3 working days before being kicked out and discovered LL had not secured the deposit (over 3 weeks after tenancy started). It took about 2 weeks longer after that date before it was we secured (we are still in the flat – we got confirmation a few days after eviction notice that the eviction had been cancelled as he’d paid his arrears, presumably with our deposit).

    We’ve agreed we will be leaving at end Jan 09. We obviously do not believe he has the money to give us back our deposit (it’s in the insurance-based deposit scheme so still ‘held’ by LL) so asked that our last month’s rent come out of our 6 wk deposit (leaving over 350 pounds still to be returned after we leave). He would not agree saying he needed the money. That made it clear we would have to fight for our deposit back bc he simply doesn’t have it.

    We have completed but not lodged a claim for 3x deposit bc LL has not provided us with the relevant information under section 213, despite much dialogue in this regard. He showed us the certificate (presumably legitimate) and had us sign it, but took it away to ‘copy’ and was going to give us that and the information the next day – about 2 weeks ago now.

    My thinking was that with a claim on foot we could settle for agreement that the last month’s rent is paid out of the deposit and payment of the remainder of the deposit back immediately, along with the court fees, i.e. I don’t really care about getting the 3x deposit (although the amount of time, energy and money spent dealing with this mess deserves some compensation) but it would be good to ensure we get our full deposit back quickly and can walk away without any substantial financial loss.

    But having read about the cases so far (as junior as the courts are) I’m concerned that I’d just be wasting time and energy and maybe money if LL just gives us the information and then contests the validity of the claim (and I can’t see why he wouldn’t do that). I’m tempted to do it anyway because it’s an area of law which clearly needs sorting out – surely it cannot be the intention of a law to protect tenants’ money that tenants have to pay 150 in court fees to get their deposit secured and the information provided to them, with then no penalty to be paid by the LL. That would be offensive, but that seems like the effect of the latest judgment.

    Apologies for the lengthy post – I really am interested in pursuing this though, if anyone fancies helping…it’d be much appreciated!

    • Emily, we can’t give specific advice via the blog, for obvious reasons. That said, by way of general comment…

      As you clearly realise, it is about balancing negotiating positions. I doubt very much that any County Court will find differently on the notification issue – although the issue of date of issue v date of hearing of claim hasn’t been tried out yet, to the best of my knowledge – until the matter has been to a higher court. And, frankly, good luck with finding someone to take the matter to the Court of Appeal pro bono against a broke landlord – no hope of costs! I agree that the Court fees issue is a bit of a sod, but it wouldn’t be the first time that such things had escaped parliament’s notice. My sense is that the court should be prepared to award costs if the landlord has complied post issue, (assuming that the 3x award isn’t made) but there is no precedent, or even county court example of this that I know of.

      Check the terms of the insurance on the TDS. My limited understanding is that this covers LL’s default, but I could well be wrong – not my turf particularly and right now, I’m too lazy to check.

      But – if the mortgage possession had reached eviction stage, it is likely (although not certain) that your landlord had a possession order against him for the property before he let to you (on the timescale you give). That sounds like a possible claim against the LL for breach of quiet enjoyment if you were evicted, but might also raise a question about the validity of the tenancy agreement – you might only be an ‘unlawful occupant’ if the lender had not consented in any way to the tenancy. Could be worth a look in terms of enforceability of the tenancy agreement. No commitment to this argument on my part – just a thought.

    • Thanks for the thoughts, NL. I’m not sure whether it’s better or worse for us to be ‘unlawful occupants’! We have in writing agreement to terminate the lease on 30 Jan 09, and we intend to leave before then (anticipate harassment if we lodge s214 claim and particularly if we decide not to pay the last month’s rent so that we only have to chase/claim £400, rather than the full deposit of £1380).

      Question – would be grateful for advice from NL or those who work with claim forms regularly – can I use the online moneyclaim.co.uk for a s214 HA claim (given I’m only after an order for a fixed sum) or do I have to use form N208 (as the county courts guidance says) because the difference would be between court fees of £108 and £150?

      The consumeractiongroup blog suggests people are using N1, N208 and moneyclaim.co.uk…but could my claim technically be struck out if the judge on the day knows/cares that it’s on the wrong form?

  23. Many thanks for this blog and other information on this website. I wish I had found it earlier! I am a landlord and appointed an agent to find tenants for my flat a year or so ago, which they did. Contrary to my instructions, the agent got the tenants to sign the wrong tenancy agreement. A barrister friend of mine incorrectly advised me that, since there was no agreed tenancy agreement, my flat was occupied on the terms of a bare licence not an AST. I therefore did not follow the rules governing deposits. At some point (it is not clear whether this was at the time the tenants occupied the flat or after the tenants left) the agent advised the tenants, incorrectly, that their deposit had been paid into a deposit protection scheme. The tenants left and sought recovery of their deposit in full, despite some damage having been caused to my flat and the flat below, which cost me a relatively small amount to fix. Because I retained this amount from the deposit, the tenants are now suing me for recovery of the balance of the deposit and 3 x the amount of the deposit. Can the tenants now seek an order for recovery of the balance of the deposit and the fine of 3 x the deposit even though they have left the property under s214? Does it make any difference when the tenants were told that their deposit had been paid into a scheme (i.e. at the beginning of the tenancy or after they had left)? Does the fact that the tenants appear to be using the threat of the fine of 3 x the deposit to get all their deposit back despite having caused damage to the flat (i.e. the relatively small deduction is reasonable) make any difference?

    • CRM
      In answer to your last three questions:
      1. Yes.
      2. Not sure what you mean. It should be paid in within 14 days of receipt. In relation to a claim, some county court judgments have found that if the money is paid in and the information given before a claim is made, even if very late, the claim fails. What isn’t clear is what happens if the deposit is paid in and the information given after a claim is made but before the hearing of the claim. There is some suggestion that this would also mean the claim fails, but there are no decisions on this point and nothing binding. It makes no difference whatsoever whether or when the tenants were told the deposit was in a scheme, if it wasn’t. The only point is whether it should have been in a scheme and the relevant info provided, which it sounds like it should have been.
      3. No.

  24. I would be most grateful if someone could advise me.

    I rented a property for my elderly grandmother for eight months, which has subsequently been vacated. The landlord is refusing to return the full deposit. He is suggesting that the twenty year old carpet has been stained by my grandmother, which is ridiculous.

    The landlord did not put the deposit in a rental deposit scheme, and I was not aware of the schemes until after she had vacated the property.

    Can I make a claim to the county court with regard to the landlord returning the deposit and for breach of statutory duty after she has vacated the property?

    If the landlord decides to return the deposit prior to the hearing, can I insist he pays the court costs?

    Also, if the deposit is returned, can the proceedings still be heard for the breach of statutory duty with regard to rent deposit scheme?

    Your advice on this matter would be much appreciated.

    • Claudia, as the disclaimer says, we are unable to give advice on individual’s issues via the blog. I suggest that you contact a housing advisor or solicitor.

  25. I too would be interested to know what the position would be if, after vacating a tenancy, and returning the deposit, the tenant were to sue for breach of statutory requirement with regard to non compliance with rent deposit scheme. Would a tenant be entitled to bring a claim for 3x deposit?

    • Valerie, the simple answer is dunno. But I doubt it. If the tenancy has ended and the deposit returned, then I doubt they would continue to be a tenant or relevant person for the purposes of s.214(1). If the deposit has not been returned, but the tenancy has ended, things are different – Stankova v Glassonbury being an example. This would probably also be the case if the deposit were returned after proceedings were issued.

      But given the widely disparate results coming in from County Courts on these cases, it is hard to be certain about anything.

  26. I am in a situation where my intial 12 month Shorthold Tenancy Agreement was renewed for another 12 months (new lease document was signed) after the intro date for TDS (Oct 07). I have since left the property and almost 6 months on am still disputing my landlords deductions from the bond money which he has only now informed me was not placed into a TDS.

    Has there been any resolution/cases on the matter of whether bond from a renewed contract should have been protected?

    • Lachie, there have been cases either way – either finding that it is a deposit that has been received for the ‘new’ tenancy, or finding that no money was received at the time of the new tenancy. All the cases are County Court, so there is no binding precedent and no resolution of the issue. It is frankly a lottery by District Judge at the moment.

  27. What would be the situation if a tenant’s landlord was itself a tenant of the freeholder and did not protect the deposit. If the freeholder forfeits the intermediate tenancy under s.18 HA 1988 the freeholder becomes the landlord. However, is the freeholder now liable for 3X the deposit?

    • Good question, but I doubt it, unless the reversionary landlord had in some form received the deposit, either from the (ex) intermediate landlord or the tenant. But if it was the case, surely the ‘new’ landlord would have a claim for indemnification against the ‘former’ landlord.

      Anyone else?

  28. Hi have there been any recent developments on the basic question of the 3x deposit penalty? What arguments can a landlord deploy if they have no notice under cpr that proceedings are going to be issued and on receiving notice of an issued claim , immediately place the deposit in gov backed scheme.

    Thanks

    • Rob,

      There have been lots of developments, none binding. Try reading the rest of our reports linked to in this post. I’m not going to list them all for you here, they are just a click and a read away.

      As for ‘arguments a landlord can deploy’ – there is no requirement for notice before issue of part 8 proceedings, which TDS cases are. For the rest, you’ll have to actually pay a solicitor, because, as the disclaimer makes clear, we do not give advice on individual’s cases on the blog.

  29. I have had similar problems twice now with the tenants leaving early, agreeing to give me their release codes for the deposit from the DPS. Then they seem to change their minds and I have to wait whilst I go through the due process of legally recovering the money from the DPS.
    As we know there are some unscrupulous landlords out there but equally so, tenants can be pretty unethical too.

  30. MM

    Sounds unlikely. Why would it be in the tenant’s own interest – let alone ‘unethical behaviour’ to delay their receiving the deposit back?

  31. Thanks for this post and for the lively discussion.

    I’ve advised on this situation down at the pro bono advice clinic so thanks for the update as to the latest state of play.

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