Making sense of deposits. Nearly.

It started as such a simple idea, the tenancy deposit regulations. But bad drafting and some ‘interesting’ interpretations by the Courts put paid to that. We now have a confusing mess, for both landlords and tenants.

So, in a spirit of helpfulness (and to stop people asking me All The Time), here is the NL guide to where we are now (as of 24 August 2015) on deposits – what should have been done, what happens if it wasn’t done – depending on when it wasn’t done, and what can and can’t be done about it. Penalties, section 21 notices and all.

Deposit taken before April 2007 and tenancy became statutory periodic before April 2007

No penalty claim – deposit doesn’t have to be protected. But…

Charalambous v Ng – and s.31 Deregulation Act 2015 amending s.215 Housing Act 2004 – no Section 21 Notice can be served until the deposit is protected and Prescribed Information (PI) served, or deposit returned.

Deposit taken before April 2007 and tenancy became statutory periodic after 6 April 2007

A former Superstrike situation. Deregulation Act required deposit to be protected and PI served by 23 June 2015. If it was so protected, now treated as always protected.

If not protected and PI served by 23 June 2015, then no s.21 can be served until the deposit has been returned and there is a penalty claim by tenant.

For a tenancy which was renewed after 6 April 2007, even if the first tenancy began and the deposit was taken before April 2007, the deposit should have been protected and PI served at the renewal tenancy. Then it will be treated as being a deposit taken after 6 April 2007, as below (s.215B(3) Housing Act 2004 as inserted by Deregulation Act)

Deposit taken after 6 April 2007 and protected and PI served during ‘original’ tenancy (even if outside required period)

After Deregulation Act and new s.215B Housing Act 2004, this counts as service of PI on any subsequent tenancy of the same property if the deposit is protected in the same scheme.

But now it gets complicated. When was the deposit protected and PI served?

Between 6 April 2007 and 6 April 2012 – 14 day requirement for protection and service of PI.

But if deposit protected late but inside term of original tenancy, there is no effect on validity of a s.21 notice and no penalty claim (as Tiensia applies even on original breach, meaning late protection is good protection).

If deposit not protected and PI served within original tenancy term, a s.21 notice can’t be served until the deposit is returned (or PI served, if the deposit was protected but PI defective or not served). Penalty claim applies, so long as tenancy still exists, (Hashemi will apply.)

However – and this is my reading of s.215B(3), and is not certain – if the deposit was protected and PI served within 14 days of a renewal tenancy, that will count as an ‘original tenancy’ for any subsequent ones, so that the Deregulation Act ‘deemed compliance’ will mean no need to serve the PI again on subsequent tenancies. There would still be a claim on the first breach, so long as the tenancy exists (Hashemi will apply.)

If that is right, then it is also arguable that late protection and service of PI within the term of the ‘renewal tenancy’ will be deemed compliance for subsequent tenancies as an ‘original tenancy’.

After 6 April 2012 – 30 day requirement for protection and service of PI.

If deposit protected and PI served outside 30 days, no s.21 notice may be served during the initial tenancy unless deposit returned (or PI served, if that deposit was protected in time, but defective/no PI served in time). Penalty claim possible.

But if protected/served late but within original tenancy term, and the tenancy has subsequently been renewed or become a statutory periodic, a s.21 notice can be served. However, penalty claim on original default (only the original default).

If deposit not protected and PI served within original tenancy term, a s.21 notice can’t be served until the deposit is returned (or PI served, if the deposit was protected but PI defective or not served). Penalty claim applies on first and any subsequent breaches (on new tenancy/statutory periodic)

However – and this is my reading of s.215B(3) again – if the deposit was protected and PI served within 30 days of a renewal tenancy/statutory periodic, that will count as an ‘original tenancy’ for any subsequent ones, so that the Deregulation Act ‘deemed compliance’ will mean no need to serve the PI again on subsequent tenancies. There will still be a penalty claim for the first breach.

If that is right, then it is also arguable that late protection and service of PI within the term of the ‘renewal tenancy’ will be deemed compliance for subsequent tenancies as an ‘original tenancy’. Though in this case, there would be a deposit claim for each failure to protect in time.

If deposit protected and PI served within 30 days, no need to serve PI again on renewal tenancy/statutory periodic tenancy and no penalty claim. S.21 notice valid.

 

And, of course, for any post April 2007 deposit

If still not protected and/or no PI served at all, no s.21 notice and a penalty claim on each breach – for first tenancy and on any subsequent renewal/statutory periodic tenancy. Deposit must be returned (or PI served if deposit protected but PI defective/not served) to enable s.21 notice.

I trust that is all perfectly clear…

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 , .

117 Comments

  1. Pingback: Making sense of deposits. Nearly. – Nearly Legal | Current Awareness

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  3. Thanks for sorting the comments issue Giles – I’m sure they’ll start flooding in on your posts now! :)

    The comment I wanted to make is that, as a housing advisor, it’s all good knowing when a tenant may be entitled to a penalty payment – and thank you for clarifying – but what that tenant can do about it seems to be another issue.

    In my experience the ‘no win, no fee’ type solicitors that tenants on a low incomes turn to for these cases give up very easily unless the LL comes up with the money after the first pre-court action type letter. Yet the process of making a claim for a penalty payment seems too complicated for tenants to be able to do on their own without legal representation, which shouldn’t be the case.

    Having said that at least the restriction on s.21s is a saving grace for many tenants, so again, thank you for summarising the recent changes.

    • The ‘no win no fee’ types are typically claims managers, not solicitors. They haven’t got solicitors to refer the cases on to. Hence giving up.

      Penalty claims unless worth over £10,000 are pretty high risk for solicitors to do as no win no fee, as they may well get allocated to small claims and hence no costs recovery.

      The claim process is relatively straightforward, but I agree that the thought of court proceedings is frightening to many.

    • Giles –
      a) hello after so long
      b) thank you for this and your earlier work on the implications of Dereg on this hopeless but well-meaning legislative shambles which has been of huge help to me on numerous occasions; and

      c) Have been considering the costs position of a free-standing deposit prot.failure claim by a tenant/former tenant.

      It should be started by the Pt8 process, which has multi-track costs consequences. If it is subsequently allocated to the small Claims Track which (as you indicate) seems almost invariably likely to be the case) I think the whole case would then bear the implications of the small claims track (ie minimal costs able to be claimed by winner).

      BUT If a Pt 36 offer is made by the Claimant pre/on issue to accept ‘penalty’ of one times deposit (which D will not beat) will that entitle an otherwise successful C to the ordinary consequences of a successful C’s Pt36 offer? If accepted by D will they be liable for costs up to expiry of relevant period as the case will never be re-allocated to small claims? (I’m thinking ‘yes’ because until actually allocated to small claims multi-track will prevail.

      I am having to help a few tenants pro bono because of the tricky costs consequences – that said, once advised whether they have a claim, it should be a fairly simple (Pace HMCTS) claim for the tenant to run. I mean it’s not as if my solicitors get any further with the blank wall of Court ‘help'(ha!)lines/desks etc than a lay person able to scream in pain. If MOJ want a new strapline it could be ‘In HMCTS no-one can hear you scream’. Catchy, no?

      Anyway, I just wondered whether you have any experience of this situation – namely the free-standing deposit claim. Generally I think it is one where legal reps will lack experience precisely because of the costs issues.

    • Part 36 doesn’t apply to small claims. CPR 27.2. If case still as a part 8 claim, then maybe applies, but if not accepted and allocated to small claims….

      Welcome back!

    • Indeed, Pt36 does not apply to the small claims track; that’s why I pose the question.
      But if a Pt36 offer to accept 1x deposit is made pre-allocation while the multi-track costs prevail, then will it not be unreasonable of D to continue to defend with the potential (though not inevitable) award of costs under 27.14 (2)(g)?
      Morton’s Fork or Simplywondered’s non-point?

  4. Excellent information – thank you!

    I have a related enquiry, if any NL readers are able to assist?

    The N5B claim form for accelerated possession asks landlords “was a money deposit received on or after 6th April 2007″. In light of this, it is not capturing the information required by the court to identify when a ‘Charalambous’ landlord may be unable to serve a s.21.

    I have been round and round in circles on the HMCTS and MOJ websites, and cannot find any means by which to alert HMCTS to this in order that they can amend their form. ‘Contact the local court to which your enquiry or complaint relates’ isn’t much help.

    Any ideas?

    • That is a good point. The N5B will need amending, not just on that point but all the Dereg Act points. I’ll see about getting it raised.

  5. In the “Between 6 April 2007 and 6 April 2012” section it says:

    “If deposit not protected and/or PI served within original tenancy term..”

    Should that be “… and/or PI *NOT* served …”?

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  7. Legislation regarding tenancy deposits is drafted to apply for a given tenancy.
    Therefore, a s.21 notice should always be valid if served in relation to a tenancy for which the deposit has been protected in time and PI given.

    ‘Renewals’ and statutory periodic ASTs are of course new tenancies and allow to protect a deposit in order to be able to serve a valid s.21 notice.

    The Deregulation Act just removes the requirement to give the PI again but one should still be careful to re-protect (or to comply with any other requirement) if the scheme requires it.

  8. Deposit protected and PI served outside 30 days (after 6 April 2012)

    I have a quick question regarding the above (sorry!). Is it possible to make a claim for non-compliance if the tenancy no longer exists?? Or does the Court of Appeal’s Judgment in Hashemi reasoning apply to deposits protected after 6 April 2012?

  9. Sorry to hark back to an old post, but in respect of deposits received between 6 April 2007 and 6 April 2012, can anyone help me understand why it is the case that if deposit not protected/PI served within original tenancy, s21 can only be served during subsequent tenancy if deposit returned or tenant claim determined/settled/withdrawn. Is it that the ‘late protection is good protection’ (from Tiensa) only applies in relation to original tenancy? Thank you

    • The Deregulation Act protection only applies if deposit protected and PI served within the original term. Tiensia only applies to a s.214 claim, not service of a s.21 notice. And even then, Tiensia only applies to deposits protected late but before April 2012.

  10. Ah, thank you for clarifying (she said, whilst simultaneously face-palming and writing note to self to read the case law properly next time…).

  11. Hi there,

    I have been trying to get my head around tenancy deposits. My understanding is that currently the case-law we have is Tiensia and Gladehurst in which the court eviscerates tenancy deposit protection. The Localism Act 2011 brings in significant changes, my question is, but does it? Or does the confusion prevail for both landlords and tenants, also what impact does the Deregulation Act have. I want to understand the case-law in line with this subsequent legislation. Also does the government amendments signify policy that seeks to rectify the issues within PRS regulation.

    Housing policy is something I am very interested in understanding. At present, it is just not working..:)

    Thank you

  12. Also please clarify for me when Tiensa and Gladehurst apply respectively, what implications does this have? I love the posts where you discuss implications or what this means. Makes it understandable for me! Tenancy deposits are woah complicated!

    • Hannah, I think you will find that this post and our previous posts on deposits cover your questions. As to Tiensia and Hashemi, they are only still relevant for pre April 2012 situations, so, say, a s.214 claim for penalty for late protection in respect of a deposit received between April 2007 and April 2012 (but that would not affect a claim for any subsequent breach on renewal tenancy after April 2012).

  13. Hello, thanks for the info

    I have one question, was there any case of deposit protection failure, where the tenancy was for only e.g. 32 days? Would such a short time make a penalty claim less likely to be successful?

    • Not that I know of, but then I don’t know of any assured shorthold tenancies with a 32 day term. If you think you have created such a thing, no s.21 could be issued for 4 months, or take effect until affect 6 months, even if the fixed term was 32 days.

      But if it was an AST, then the deposit would have to be protected within 30 days. Full stop.

    • Giles,

      Thank you. I signed a contract with a fixed term of one month, and then rolling. I left a the end of the first month, 33 days after sending the deposit to my LL. It may be a sub-tenancy scenario as the agency operates at a ‘guaranteed rent’ scheme with leases on the houses. At least that is my understanding, but it should still be AST (I think).

  14. Gosh, I’ve got more of a headache. I’ve really been studying all the words in the act, my first AST my landlord didn’t protect the deposit until ten months later, when I told him he was breaking the law. He never gave me PI. Also he lied to mydeposits and made up delusional dates starting from the ten months, I know he’s crazy. So real one was 17/1/2014 to 17/1/2015. He made up one from Oct 2014 (sorry exact dates not infront of me) to Oct 2016. So he didn’t just lie about dates, he turned a one year contract into a two year one so mydeposit believes as “they are not the police” they tell me and don’t need to see AST, they take landlords word for fact. Anyway the next contract REAL started 1/6/2015 to 1/6/2016. Mydeposits have just emailed me with new dates yesterday 8/2/2016 to 8/2/2016, more delusions! I rang them and told them they were nuts. It’s untrue, but only the landlord can tell them to correct. He has not given me PI and won’t. I’m not doing him any favours. Both times I’ve contacted mydeposits to see certificate. The law states he has to give me PI, not me ask to look at the certificate. The rest of the PI I have no idea even what it includes. So both contracts he has not given PI. The first contract deposit protected after ten months, but he gets away with that rolling over, but in court I’d beg to differ as all literature with mydeposits is untrue, plus many other things. Neither certificate has real dates on. So where do I stand? Can I do him twice as both times PI not given? Surely this time he had to give within 30 days as he didn’t in initial? I know the intially can be late, but it was never given. I thought I had it all planned months ago, but then saw the deregulation act. Many thanks hope you can reply, and I’m certainly defending myself in court, it’s s shame he doesn’t know the rules like I do. However the wording in the DAis totally confusing in some respects and letting off con artist landlords who don’t follow the localism act. So why have it? If they can get away with protecting late? Only landlords who followed rules the first time should be covered under the DA. But, oh no they let them off even if done both late. Mine can’t turn the clock back, there’s no giving that PI to make up for either. First contract over, second contract 7 months in. Ends in June!
    Also as not renewing do I have to apply to court before contract ends in June?

    • Emily – we can’t advise on individual cases, I’m afraid. But in general, the Deregulation Act ‘get out’ clauses only apply where the deposit was protected and prescribed information served correctly in the first place, before the subsequent breach.

      What has to be in the prescribed information (combined with the tenancy agreement) is here in the Order.

      A claim can be brought after the end of the tenancy for any breach/failure that is after April 2012.

  15. If your second fixed term contract ends and you roll into a SP, can you still claim for never compiling to the law in contract 1 and 2? Or do I need to start claim before 2 ends? This is all post localism act. And deregulation act doesn’t help my landlord as he has never given PI. I’d appreciate your knowledge please as I need to know if I have to start while in a fixed term. You’re the only source of information I’ve found regarding my query. Thank you

  16. Sorry didn’t see your reply and just asked another question. Basically I think you cover it, but want to make sure. If a tennant went into periodic after the failed fixed terms, can they still claim later on the fails? I’ve just read some litrarure floating around stating you can only claim afterwards if you have left the property. Localism act does not state leaving the property though or the mention of a periodic was to arise. So basically after none compliment fixed term tenancies can you still claim compensation if you Stay on a Periodic afterwards? OR is a claim on valid if you start it before the fixed term ends? Hope that makes sense. I’m sure you just answers all that though in the article. Thank you

    • Localism Act changed the wording that had been interpreted as meaning had to claim during the tenancy. It does not matter any longer whether a claim is brought during a tenancy or after it has ended. So it is possible to claim for multiple breaches over several tenancies.

  17. Yes, I knew “after” was fine. However, I have read a few times that it doesn’t apply if you stay a tennant. I’m sure I read that on shelter. That’s what I’m confused about.
    Theres two scenarios:
    1. A tenant leaves the property after FT or SP
    2. Tenant remains in the property under either a new FT or an SP

    So both the above could still claim for the 2 previous contracts, that were never adhered to?

    Many thanks

  18. And another last question sorry.

    This part from the deregulation act

    “b)the initial requirements of an authorised scheme have been complied with by the landlord in relation to the deposit (ignoring any requirement to take particular steps within any specified period)”

    Isn’t this contradicting the localism act where the deadline is 30 days?

    They are basically implying as long as a landlord has at some point protected the deposit and given PI, everything is all
    OK, it doesn’t matter when?

    Or am I reading it wrong? If then do mean that I feel it is totally throwing the law of 30 days out the window.

    The sentence “ignoring any requirement to take particular steps within any specified period”

    And further more it looks like this does not just apply to a first contract, it could apply to any additional ones IF they didn’t comply before?

    Many thanks and I hope I’m reading it incorrectly

  19. Sorry, my iPhone likes to change spellings. I’m hoping they are using the terminology “ignoring” as in, if one has not complied within the 30 days, they are not complying, rather than “ignoring”, in the meaning of, ignore the 30 day rule, as long as you’ve done it at some point!

    • Oh for heaven’s sake Emily. Most of this is in the post.

      No, you can claim for previous breaches at any time, so long as never ‘rectified’ by the Deregulation Act changes.

      No, the 30 day deadline still applies as far as deposit claims go. The Deregulation Act changes only affect whether the landlord has to serve prescribed info again on replacement tenancy – not if they protected deposit and served PI at some point during the previous tenancy (but serving late during the previous tenancy would still be a breach – this is all in the post).

  20. I knew that!!! It was not what I asked!!! They shouldn’t use such stupid terminology about ignoring! Don’t reply if you don’t want to answer! I have two degrees thank you! Don’t run a blog discussing exactly what I am and stating “Nearly” and then again somewhere else stating YOU THINK! You do not write the article as fact! And you are stupid to state you write this in the article as I bloody stated that! if you are going to get annoyed, don’t bother! You obviously don’t have enough clients as you are online doing this! The ignoring part makes NO sense! And you contradict yourself! all over the Internet are different answers. Maybe housing lawyers should all understand, as they clearly don’t giving contradicting answers! Run a group for those! I would not expect you to know all I do about medicine with a doctoral degree! I think I clearly know more than most landlords! And no wonder I get hundreds of websites shut down and sue for a living! I never even require lawyers most the time and the last one was £25,000 for defamation about me on Sky! ive sued a lot more companies than you probably have! That’s being famous, and with a brain! Delete my comments or I’ll report to your provider hosts. You should not open posts discussing anything! Also explains a cheap blog, where one can’t delete posts!

  21. You clearly can’t read! Read it and think! It makes no sense! I know what the act is! And why! They are as stupid as you stating to ignore any mention of time limits! I’m glad a lawyer on YouTube questions all I question. Rectify? You can’t Recify a tenancy that doesn’t exist anymore! And you can’t use a PI certificate that states incorrect dates! It’s invalid! Another lawyer understands that! Yet you didn’t even think of that! You must be one busy man! How dare you write like that! Remove comments please.

  22. HI, Can you confirm what a landlord who has failed to protect the deposit in the 30 day time limit (And obviously then failed to provide the PI) Can now do? I would assume the only options are to return the deposit in full (Regardless of time left on TA) and make an offer of compensation to avoid a potential fine of a minimum 1 times the deposit? Any advice will be appreciated.

  23. This is both fascinating and rather hard for a non-lawyer to grasp.

    Can I ask some questions? (not my situation, honest – I’m a tenant who’s been served a s21 that isn’t valid for much more basic reason – I’m just intrigued by the complexity!)

    Let’s pick a 12 month AST that began 01/01/10, one month deposit paid by tenant, and has continued for several years, being renewed annually, with no other legal/arrears issues. Once the 6 Month requirement is met for latest renewal, the Landlord now wishes to end the tenancy.

    1) If the Landlord failed to protect the deposit during the first year(s) of the tenancy, but did so after the tenancy was renewed, and served the prescribed information at that point – can they issue a valid section 21? From your post, I think the answer is yes, but they must refund the deposit first? I assume the Landlord will be liable for a penalty claim for their initial (and any subsequent?) breach. Does it matter whether the ‘original’ deposit was refunded to the tenant when the protection was eventually taken/PI served?

    2) Can a Landlord argue that protecting the deposit and serving information in year 2/3/4 of the tenancy creates compliance for each renewal after that, even if the deposit was protected/renewed out of sync with the ’14/30 days’ window created by each renewal? eg: Tenancy began 01/01/10 and was renewed annually. Deposit protected and prescribed information served 31/06/13, and renewed annually thereafter. Has the landlord therefore complied from 2014 on, as I read you as saying they would be if they’d protected/served ‘late’ in the original term?

    I think what I’m asking here is essentially – when you say “late protection and service of PI within the term of the ‘renewal tenancy’” does that mean “_at_any_point_ during the renewal tenancy” or “within the 14/30 days for protection/PI service created by each renewal”?

    3) If a Landlord protected the deposit and issued PI as above, would it change either Landlord or tenants position if tenancy became statutory periodic? (eg does that require refund of deposit/new PI within 30 days?)

    4) If the Landlord was in breach beyond the original term, so (I think) cannot serve a s21 without refunding, do they have any options other than making a refund and an offer of compensation and hoping it is accepted? Isn’t there a danger that if the tenant refuses to accept a refund/offer, they create a situation where they cannot legitimately be evicted, at least under s21, for an very extended period, and can use that to demand compensation beyond any reasonable claim to which they’re entitled?

    Apologies for the many questions, and I quite understand if replying would go beyond the scope of your excellent blog, and enter the realm of the expertise which earns you the means to pay your own rent/mortgage!

    (Our own Landlord, by the way, didn’t quite manage to grasp the meaning of “two months” for the s21. They’re not malicious – they just seem to believe that their house is their house and so they can sell it when they want and we have to leave when they do)

    • On 1. They can serve s.21, no need to return deposit.
      On 2. Yes, post Deregulation Act, late protection in one term counts as compliance for subsequent term.
      On 3. No, protection during fixed term now counts as compliance for subsequent statutory periodic (post Deregulation Act).
      On 4. Return of the deposit probably does not require tenant’s consent (only deductions expressly require tenant’s agreement).

    • Hi Sorry if the wrong place but I was after information with regards to the prescribed information, Does the certificate form part of it? And if you have 2 tenants (Joint TA) do you have to make sure both receive if sent by email? Or can one suffice? Its all terribly confusing. Is there an easy “send this” pack anywhere?

    • Your deposit scheme provider should have specific instructions on the prescribed info. But email is not good service unless tenant agrees

    • Thank you for the reply, so the tenant would have to agree to emai? So proof of sending an email wouldn’t be a defense?

  24. Hi Giles,

    many thanks for the reply –

    on 1, you say Section 21 would be valid – I thought the relevant part of your post for a tenancy which started between 2007 and 2012 and was not protected in the original tenancy period was:

    “If deposit not protected and PI served within original tenancy term, a s.21 notice can’t be served until the deposit is returned (or PI served, if the deposit was protected but PI defective or not served). Penalty claim applies, so long as tenancy still exists, (Hashemi will apply.)”

    Did I misunderstand how that relates to the following paragraph? Or does protecting the deposit at any subsequent point remove the need to return the deposit before serving the section 21?

    Glad to hear about 4 – I’m sure it’s far better to take the hit on any dilapidation deposit than to allow the possibility of an infinite tenancy!

    • On 2007-2012 initial tenancies, you missed out the next two paragraphs, which apply to exactly your hypothetical. Those paragraphs remain my view, though I’d accept arguable.

      I said:

      “However – and this is my reading of s.215B(3), and is not certain – if the deposit was protected and PI served within 14 days of a renewal tenancy, that will count as an ‘original tenancy’ for any subsequent ones, so that the Deregulation Act ‘deemed compliance’ will mean no need to serve the PI again on subsequent tenancies. There would still be a claim on the first breach, so long as the tenancy exists (Hashemi will apply.)

      If that is right, then it is also arguable that late protection and service of PI within the term of the ‘renewal tenancy’ will be deemed compliance for subsequent tenancies as an ‘original tenancy’.”

    • Giles,

      Thanks again. Yes, you’re right – I think the bit that confused me was “if the deposit was protected and PI served within 14 days of a renewal tenancy”. My hypothetical wasn’t clear on whether the protection was taken out within that time.

      As I read it, your post says:

      Original Tenancy: 01/01/10.
      Renewed: 01/01/11 and 01/01/12 and 01/01/13
      DP taken/PI Served: 10/01/12 (within 14 days of second tenancy)

      Then no refund required to serve s21 (subject to other requirements)

      I think I was trying (too vaguely) to ask about:

      Original Tenancy: 01/01/10.
      Renewed: 01/01/11 and 01/01/12 and 01/01/13
      DP taken/PI served: 31/06/12 (outside the 14/30 renewal period for second tenancy)

      In that situation, I wasn’t sure if the renewal of 01/01/13 creates deemed compliance for that and any subsequent tenancy. I think you say this is arguable, but perhaps you have a view on which way it would be likely to go?

    • I think it would be. The definition of ‘original tenancy’ in s.215B does not require it to be the first, just a precursor tenancy to a current one.

  25. Sorry wrong email so reposting as might not go through

    Old post I know and apologies in advance.

    Query:
    If a deposit claim could potentially add up to say £15,000, would you have to apply to multi track? As I believe small
    claims are limited to £10,000

    However complications arise due to

    “The Court must order the landlord to pay to the application a sum of money not less than the amount of the deposit and not more than three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order.”

    One doesn’t know what a judge will award for each breech, so do you apply to multi track for the figure of the highest possible amount?

    Or do you just apply for the total
    of breech deposits, say 3 X £1980?
    Not including the compensation costs?
    If that is so, then it would be under £10,000 to start before compensation added.

    Also which forms does one use please if
    A) multi track start or
    B) small track start
    Please?

    It’s very different to when the sum awarded for non compliance was set at 3 times strictly, prior to April 2012. If you don’t know what you will be awarded, figures could exceed £10,000 and a landlord who has never complied will not be penalised lightly.

    Sorry in advance.

    • All deposit claims are technically multi track. But courts are allocating to small claims or fast track depending on value below or over £10,000.

      What do you mean compensation costs? A deposit breach claim is for 3 times the deposit and return of the deposit only. There is no other ‘compensation’. Claim for the 3 times, then is court’s discretion as to what is awarded.

      Forsm – well I’m afraid I’m not going to write out a complete guide to claims procedure.

  26. Even a late compliance counts as passed, so any new AST or SP would be covered, however there would be a penalty for the late compliance post localism April 2012. (2013 actually only counts for Ireland) There’s nothing you can do about pre localism, you could only apply whilst the contact was “live”, not afterwards. Only localism added the past temnant and up to 6 years.

    Also the not being able to give a section 21 would only apply regarding the current tenancy situation. Say you are on the 3rd tenancy and a landlord only complied on that one, well the others don’t count. He could give it if that time he had complied with the 30 days of protection and PI

    Lastly check PI as if that is incorrect it’s invalid. Example wrong dates, one landlord on when’s actually there’s two. It’s insurance and insurance for a black BMW with the number plate JL4 2SH, is not valid when the BMW is blue and the real plate reads JL4 3SH. underwriting fraud and from August this year it must be deliberate and the “good faith” has many changes. however before August 2016 it’s still “good faith”, but they wasn’t the “should have known”, they had to he report everything. There’s a lot lawyers haven’t even put together. Remember this is insurance!

    I’m surprised you didn’t get attacked due to all your questions!
    There’s no “how you read it”, it is what it is!

    • Tom, I have no idea what or whom you are replying to here, but there are a few things wrong.

      Late compliance in protecting deposit doesn’t count as ‘passed’ for the current tenancy. So no s.21 unless deposit returned.

      I can’t see that anyone said anything about 2013 for the Localism Act (which is actually a 2011 Act, but the relevant deposit provisions came into force in April 2012)

      Of course the not being able to give a s.21 would only apply for the current tenancy on a breach. Whether the landlord could have served a s.21 in an earlier tenancy is completely irrelevant if they didn’t, or even if they did then granted a new tenancy.

      On the PI – there are no dates in the prescribed information, so that it is red herring.

      One landlord rather than two could be OK if they are joint landlords.

      And it isn’t insurance so I have no idea where you are going with that.

  27. In cases where a landlord is in breach and remains in breach of the deposit requirements and applies to court for an order for possession based on an (invalid) Section 21. Would the tenant have the option of counterclaiming for the return of the deposit and a penalty payment? Or can this only be done through a separate claim through small claim or multi track as per Sophie’s comment above?

    • There are mixed views on appropriateness of a counterclaim. My view – it is closely connected to the facts of the defence, so can be done. I have done it that way.

  28. I was not referring to a section 21 or I wouldn’t use the word penalty here:
    Even a late compliance counts as passed, so any new AST or SP would be covered, however there would be a penalty for the late compliance post localism April 2012. (2013 actually only counts for Ireland)

    That is in regards to the deregulation act and claims. As long as they protect at some time within a tenancy, they are then ok for the next one. If protected after 30 days it counts as fulfilled for the next one, however there would be a penalty. The deregulation act is about continuing tenants and is there a need to re protect deposits and give PI on every SP or fixed term AST that arises. Note: deposits must continue to be protected but you do not need to give PI again. For a new fixed term you do need to give another certificate. Superstrike noted by law that a SP is a new tenancy. Superstrike is still possible if a landlord never applies BUT post localism there can be multiple breeches and you can claim
    after tenancy ends. You couldn’t do this before localism, only when live.

    Forum messages have not just been regarding section 21s, that is why I am commenting on many issues above. Note please that dates of tenancy could change some things.

    Section 21

    No protection- they must give your deposit back first or it’s invalid

    Protection but no PI- they must give PI before a valid section 21

    Sorry but you make no sense, why are you chirping on about section 21s not valid in old tenancies. That makes no sense! Re read, it’s regarding penalty claims.

    The deregulation act is not about section 21s! Why are you writing a post about it, write one on section 21s! Gosh! Re read all you wrote!

    You write April 2013! It should be 2012! 2013 is Ireland. Also why are you going on about 2011. The law applied from April 2013, it doesn’t matter when it went through parliament! You call yourself a housing lawyer! It’s why you are on Twitter on the time! Seriously he wrote April 2013 and makes no sense! I see I understand the situation better!

    “Even late compliment counts as passé” why would that have to do with a section 21! You only get that right dear it you protect in 30 days and give correct PI in full!

    You don’t even talk about section 21s really in this post!

    You are incredibly stupid statinh no dates with PI! Insane! Mydeposits give a certificate with start date of tenancy and end date of tenancy! If dates didn’t matter no law would apply! The landlord must tell the scheme the dates of AST and they must inform them again and again of dates! If your prescribed information states AST start 1/2/2014 to the 31/1/2015 and that is not correct, the insurance is invalid! It’s why he gets dates wrong! PI is in ACCORDANCE with deposit protection! Everybody don’t worry this so called lawyer states your dates of tenancy don’t apply! Gosh you are too stupid for me to continue.

    • Tom, have you actually read my post? This is not a forum, by the way, these are comments on the original post.

      I have absolutely no idea why you are going on about me saying April 2013 was the relevant date for Localism act. The post makes clear that the date is April 2012. The only mention of 2013 in the comments was in someone else’s example and that was about tenancy dates. You seem to be getting very angry about me saying something I never actually said. If you want to accuse someone of being stupid, it is usually a good idea not to be completely wrong about what it is you are accusing them of.

      My post sets out when penalty claims apply, on failure to protect or on late protection.

      The prescribed information does not set out any dates. However, if the landlord gave the wrong dates for the tenancy to the scheme, that would possibly be a failure to comply with ‘the initial requirements’ of the scheme and so a failure to comply with s.213(3).

      By the way, not all schemes are insurance schemes, some of them are ‘custodial’, where the scheme holds the deposit.

      As for me being too stupid for you to continue, somehow you managed to bring yourself to do so.

  29. confirmation (in the form of a certificate signed by the landlord) that—
    (aa) the information he provides under this sub-paragraph is accurate to the best of his knowledge and belief; and
    (bb) he has given the tenant the opportunity to sign any document containing the information provided by the landlord under this article by way of confirmation that the information is accurate to the best of his knowledge.

    A landlord giving me a certificate statong AST start 4/3/2014 to 3/4/2015 is not valid when it’s a lie and not the dates stated on the official AST agreement! Dates mean everytime! Otherwise no laws apply! Learn about insurance! It’s invalid when it is not correct!

    Also if I were you I’d study the acts must more closely. “In accordance” and “complied with”

    They must give the dates of the AST. 30 days wouldn’t even count if dates were irrelevant. Each tenancy requires new protection actually! They must tell them as they run out after 3 months from the end of AST date and they must pay new fees for a new protection with them! You obviously spend so much time on Twitter and don’t view deposit certificates! Or that their rules ( the tenancy deposit schemes) must be complied with and in accordance with! Mydeposits supply new certificates each tenancy with dates! Why? Exactly! Dates might not be mentioned on the requirements of the act, but everything is about the dates of your AST agreement! The PI is related to that! The PI needs to match the AST agreement and the deposit associated with it!

    • Tom

      I dealt with the dates point in my comment above.

      However, I’m afraid you are wrong about each subsequent tenancy requiring new protection. You will find that some deposit schemes will treat a renewed AST or a statutory periodic arising after fixed term as follows (from DPS T&C):

      If, following the expiry of a fixed term period of a Tenancy, the tenancy continues on a statutory periodic basis or a new fixed term period is agreed, The DPS will continue to protect the Deposit and treat it as if it had been received in respect of the statutory periodic tenancy or new fixed term period tenancy.

      Post Deregulation Act, there is no requirement to serve the prescribed information again on a renewed AST or stat periodic, so long as the deposit was protected and prescribed information served during the original tenancy.

      Now, given that you are perfectly happy to insult me based upon your own inability to actually read, I think your time here is done.

    • Yes, it applies to a deposit claim, obviously. 6 years limitation. So any cause of action accruing 6 years prior to issue of claim is outside limitation and can be defended on that basis. Likewise any defence and counterclaim by way of set-off to a rent arrears possession claim.

  30. Very interesting reading, especially considering the position pre-April 2012. Although (I believe this was mentioned in another article), the purpose of the legislation was to punish bad landlords, case law seems to have departed from this significantly!

    I have a question regarding the position post-April 2012 postion regarding the Section 214 penalty position, where you have stated above:

    “If deposit protected and PI served outside 30 days, no s.21 notice may be served during the initial tenancy unless deposit returned (or PI served, if that deposit was protected in time, but defective/no PI served in time). Penalty claim possible.”

    Given the wording of section 214 (‘the court must order the landlord to pay…. one to three times the amount of the deposit’), I’m having trouble undertsanding why a penalty claim is only ‘possible’. Surely the mandatory wording in the legislation means that even the smallest breach (I think an example of non-compliance by two days was mentioned above earlier) will result in the landlord having to pay compensation of one times the amount of the deposit?

    However, given the previous case law and the courts’ prevention of ‘windfall’, is it now the case that penalty claims by existing tenants are no longer as cut and dry as they should be under the legislation? For example if a landlord had registered the deposit in a scheme after the 30 day period, but had subsequently registered the deposit in the scheme, have existing tenants’ prospects of succes in such cases been damaged by the apparent departure from the legislation?

    Apologies if this has been touched on above.

  31. If a defendant’s solicitor sends the claimant an offer to settle under Part 36 for a Part 8 claim for an amount under £2,000, is it simply irrelevant (as it would be dealt with as a ‘small claim’ and Part 36 can’t be used for small claims)? It’s baffling the client as to why she’s been sent this settlement offer that’s full of conditions and states she would have to pay the claimant’s costs!

    • We can’t advise on individual cases and particularly not where you are already represented. But, if it is a Part 8 claim, it is not a small claim. And a Defendant’s Part 36 offer will mean that Defendant pays Claimant’s costs.

    • Thank you Giles. It’s so confusing. It had to be a Part 8 as it’s for non protection of the deposit, but because of the small amount of money being claimed the claimant was advised it was classed a small claim anyway :/ The landlord wouldn’t have these costs if she’d protected the deposit in the first place, so it seems outrageous that the claimant should have to pay them in order to accept an offer!

    • The offer letter clearly states that the claimant has to pay the defendant’s costs (and adhere to particular rules) if she accepts the offer …

    • PS I understand you can’t comment on individual cases so I was hoping you could answer as ‘in theory, if this happened’ ;) But just so you know, I am the claimant and I am not being represented by anyone!

    • Then it isn’t a part 36 offer.

      CPR Part 36

      Costs consequences of acceptance of a Part 36 offer
      36.13
      (1) Subject to paragraphs (2) and (4) and to rule 36.20, where a Part 36 offer is accepted within the relevant period the claimant will be entitled to the costs of the proceedings (including their recoverable pre-action costs) up to the date on which notice of acceptance was served on the offeror.

    • I am more confused now then!

      “The offer is made pursuant to Part 36 of the Civil Procedure Rules. Accordingly, if you accept this offer within 21 days you will be liable for our client’s costs up to the date on which your written note of acceptance was served, in accordance with CPR 36.13″…

      If a solicitor sent this, would it be classed as non-compliant with procedures?

    • Go back for clarification. I think they have wrongly used the template for a claimant’s part 36 offer, not a defendant’s offer.

    • Thanks so much Giles. You’re a star :) I’m sure you’re right. I’ve read Part 36 and couldn’t understand why they were saying I had to cover their costs!

  32. Hi. Looking for some advice in my various roles of a landlord, tenant and letting agent. Tenant pays the deposit to an agent who gives it to the landlord within 14 days. Deposit is not protected by anyone. Tenant moves out and gets back deposit in full. My question is who should the tenant sue for s.213 breach and why? I am aware of Draycott v Hannells 2010, but does this apply as there was no Housing Act breach in the few days agent held the money?

    Thanks
    Confused

  33. Thanks again for your help, Giles. The solicitor said it was a typo and it should have said I would NOT be liable for the landlord’s costs ;)

  34. If a letting agent registered a deposit exactly 4 months and 10 days after the tenancy start date,is that illegal? I understand this is “late” (and a bit). Let’s say the tenancy started 20/09/13, the agent has 30 days to register the deposit, so 20/10/13 at the latest?

    So 4 months go by and the letting agent remembers to register the deposit. Rules are rules, and they have broken them, there is a price to pay, lesson learned. 1-3 x the deposit as forfeiture.

    What would the consequences be if they tried to cover their tracks? Register the deposit on 30/01/2014 and alter the tenancy start date from 20/09/13 to 20/01/2014?

    Would that be a matter for the County Court, or the police as a matter of fraud?

  35. Hello Giles – as far as ‘renewals’ are defined in respect of an AST. Would an AST under new T&Cs and new rental amounts be considered a renewal – or effectively a new AST?

    Assume an example where the deposit was registered late in a 12 mth AST. A ‘renewal’ is signed by both parties at the end of the 12 mths for a fixed term, but with new T&Cs and rent amount. Per the blog post a renewal would not require reprotection/reissue of PI. But in the instance I described – would the ‘renewal’ actually be considered a new AST and therefore treated under the same requirements that the original AST was?

    Regards

    Sean

    • By the new s.215B HA 2004 (as inserted by Deregulation Act)

      (4)For the purposes of this section, a tenancy replaces an earlier tenancy if—

      (a)the landlord and tenant immediately before the coming to an end of the earlier tenancy are the same as the landlord and tenant at the start of the new tenancy, and

      (b)the premises let under both tenancies are the same or substantially the same.

  36. Thanks Giles – so therefore second (6mth) AST effectively carries forward the (late) protection from the first AST? Would that also be the same if the deposit was both protected late AND incorrectly in the original AST(registered as relating to an SPT rather than the fixed AST)

    Out of interest – are the landlords always the defendants on any compensation claims relating to failures to protect deposits, irrespective of whether or not the agents had been given responsibility to register the deposit. My understanding is yes.

    • Ah, well there is a question – not clear that the requirements of the deposit scheme were met during the first tenancy.

      And no, there have been claims against agents, or both LL and agent.

  37. Thanks – very helpful. There was one final related question then (and I apologise if this is straying into specifics too much) but in the event where deposit protection had been ruled invalid and so a small claim was launched relating to 1) failure to protect deposit and 2) non return of deposit, the defendant *could* be just the landlord – even though the agent was the party that made the mistake. Is there any subtltey if the agent still holds the money under an insured protection scheme

    Thanks

  38. Hi Giles – what would be the position if the Landlord failed to register the deposit throughout the AST (which has now ended) and also failed to give all of the prescribed information to the Tenant and then returned the deposit (in full) to the Tenant after the tenancy had ended. Can the Tenant still bring a claim as its deposit was not protected throughout the entire tenancy?

    Can the Landlord still claim for dilapidations despite the deposit not being registered with the TDS?

    Thanks

  39. Sorry slightly random question, but what’s your opinion on whether the 30 day time limit applies to a new landlord who has acquired the property & tenancy from another landlord? The consensus seems that the new landlord becomes responsible for the deposit, and needs to protect it, but it seems unclear whether it constitutes “receiving the deposit” and therefore the 30 day compliance limit applies.

    Some have suggested that as long as the landlord has not “received” the deposit from whoever is holding it yet, the 30 day time limit does not apply. The Superstrike case indicates however that the “receipt” does not need to be “physical” or “actual”.

    If the 30 day time limit isn’t triggered by change of landlord, it causes a lot of problems when an insurance based scheme is used. The insurance becomes invalid when the landlord changes, so the deposit will be unprotected – but the landlord, having not “received” the deposit yet, merely has to protect it by the time of court hearing – essentially creating a loophole to avoid the consequences of the Localism Act!

    Further, most Scheme Rules require new landlords to prove they already have a valid protection in place before the original deposit funds can be transferred to the new landlord. Therefore, new landlords can indefinitely avoid protecting the deposit by not arranging a new deposit protection – unless they do that, they will never “receive” the deposit and thus will be safe from the protection requirement.

    This of course seems very unfair so I would have thought it will be considered “received”, but what’s your take?

    • Oh I would definitely say it is ‘received’ and so should be protected and prescribed information served inside the 30 days.

      I would run an ‘invalid s.21’ defence and/or deposit penalty claim on that basis.

  40. Thank you for your reply! Slightly related, but will a new landlord be liable for the penalty even if the breach was done by the old landlord?

    Say I buy a flat with tenants in it, and it turns out the old landlord had served the PI wrong. Will I be on the hook for the penalty?

    • You certainly would if you didn’t ensure it was protected and PI served within 30 days of completion on the purchase.

      Assuming you did that, liability for the breach by the previous landlord is… not entirely clear. No decided cases, arguments either way on the wording of statute. My advise to our conveyancers has to always been to seek an indemnity on the sale.

  41. One tiny question: If landlord fails to protect (and serve PI) deposit for first AST, and only protects it (without serving PI) on the second AST, will he be accountable in court for 2 breaches? Were there any rulings on 2+ years of non compliance?

    Thanks

  42. Hi,

    Thank you for sharing your legal knowledge.

    I’m in a dispute with my landlord regarding deposit protection. I had a 12-month fixed term followed by a statutory periodic, which ended in April 2017. My deposit has not been protected at any point.

    I read in multiple places, including your post above, that my landlord and his agent are facing penalty for each agreement separately. However, they claim to have obtained legal advise, stating that fixed-term rolling over into periodic still counts as a single breach.

    Are you aware of any regulations that could possibly support their claim? Or can simply point to:

    Housing Act 1988 section 5 (2) and (3)
    Housing Act 2004 sections 212-215
    Localism Act 2011 section 184

    to disprove their claim?

    Or maybe Deregulation Act 2015 introduced something that makes their case plausible?

    Regards

  43. Thank you very much for you quick reply.

    The second case you brought up I find particularly interesting, as it involves a claim against both the agent and the landlord.

    Let’s suppose that during negotiations the agent and the landlord shift blame onto each other. Is it a reasonable (and legally sound) course of action to claim for damages from them jointly, and let the court decide how to split the bill? It’s not clear from the ruling (https://nearlylegal.co.uk/2015/09/all-of-the-wrong-and-then-some-more/) who actually was found liable for breach of deposit regulations. I imagine Housing Act 2004 section 212 (9) makes the agency as much liable as the landlord, but is it a common practice for the judges to see it that way?

    Regards

  44. Than you, I cannot state strongly enough how much I appreciate your help.

    There’s an interesting twist in my case and I went through your blog posts to find an analogical case, but failed. Then again, English is not my first language, so I might have overlooked it.

    The landlord countrclaims for damages and breach of tenancy agreement. However, instead of fixing the damages, he actually sold the place a few days later. I’m trying to make sense of Landlord and Tenant Act section 18 (1) and see how it applies here.

    If the property is sold shortly after the tenancy, so the exact reversion value is known (sale price), should any claims from the landlord be capped by reduction in sale price, proven to be a direct result of breach of tenancy agreement?

    Is it something you have covered before perhaps?

    I only found one similar case, where landlord claimed for damages (not for reduction in sale price) and his claim was dismissed by adjudicator, but it was not a court ruling.

    http://www.landlordlawblog.co.uk/2014/09/17/was-a-drop-in-sale-price-due-to-tenant-damage-something-the-deposit-adjudicator-have-been-told/

    Regards

    • Sorry Gregor, that is a whole separate, complex issue and would also depend on the facts. Not something we can advise on through the site.

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