Our thanks to Bahareh Amani-Kholsari of SSP Law for this interesting County Court possession/deposit case. As per s.215(2A), if a deposit was not protected in the required time, no s.21 notice can be served until the deposit has been returned to the tenant (subject to all the Deregulation Act changes…). So when is a deposit returned? This is a non-binding County Court decision, but interesting and I think right on the date of return point.
Chalmiston Properties Ltd v Boudia. Barnet County Court 27 October 2015
Mr B was the assured shorthold tenant of Chalmiston. The tenancy was for 6 months from 10 September 2008. After that term , it became a statutory periodic tenancy. A deposit of £780 was paid at the start of the tenancy.
On 14 February 2015, Mr B received a s.21 notice (actually deemed served on 12 February 2015). A possession claim was issued.
What had happened with the deposit was less than clear. No prescribed information had been served, either at the start of the tenancy or on the statutory periodic arising. It was not apparent when the deposit had been protected, but at some stage it had been put in the DPS scheme.
It then transpired that on 10 February 2015, the landlord had sent a request to DPS to release the deposit to the tenant. On 12 February 2015, DPS had told the landlord that the deposit was released by direct credit to the tenant. However, the credit to the tenant’s own account took place on 16 February 2015.
The tenant successfully argued that the deposit had not been returned as required by s.215(2A), so the s.21 notice was invalid – it could not be served. The possession claim was dismissed.
The key point to take from this is that ‘returned’ is clearly arguable as meaning exactly that. Not ‘released to’ or ‘on its way to’, but actually received by the tenant. The landlord here jumped the gun by sending a s.21 notice on the same day that they requested that the DPS release the deposit, but even relying on the DPS saying the deposit had been sent to the tenant would not have worked.