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When is a deposit returned? Once more with confusion


Our thanks to Guild of Residential Landlords for this note of a county court possession case. It is a counterpoint to an earlier County Court case on a similar issue, Ahmed v Shah, Bradford County Court. June 2015 (link is to our note).

Yeomans v Newell, Canterbury County Court 25 May 2016

An assured tenancy was granted to N by Y in 2011. A deposit of £300 was taken but not protected until November 2015, when it was protected with DPS.

On 22 December 2015, the landlord, Y, authorised the return of the deposit to N with DPS. On 23 December 2015, a s.21 notice was served. N did not actually receive the deposit money via DPS until 19 February 2016.

N defended possession proceedings on the basis that the deposit had not been returned in full when the s.21 notice was served.

Y argued that, by analogy with return of the deposit by cheque even when the cheque hadn’t been cashed (presumably in reference to the principle in Coltrane v Day [2003] EWCA Civ 342 ), the tenant ‘had the ability’ to obtain the deposit money once it had been authorised for full repayment.

The Court agreed, holding that the deposit had been ‘returned in full’ on 22 December 2015 because it was ‘available to the tenant’ from that date, prior to service of the s.21.


This appears to be the exact opposite of the finding in Ahmed v Shah. Both are county court, so neither binding. That said, in Ahmed, there was no evidence that the tenant had been told by DPS that it was the full deposit that the landlord was seeking to return, nor had the letting agent told the tenant this and the court relied upon that.

Still, I am not convinced by the analogy with a cheque, or that ‘had the ability’ equates to having been returned. While there is plenty of case law (for instance about clearing arrears at court before a possession hearing on ground 8) about payment by cheque being good on receipt of the cheque, a notification that the deposit has been authorised for return is not an equivalent. It isn’t clear if either court heard evidence on, for instance, whether the authorisation could be countermanded, or payment mechanism and timing, and whether this was clear to the tenant.

No doubt some of these issues will end up before a higher court before too long. In the meantime, both landlord and tenant will be taking a lottery punt on which way a county court will go on the issue.


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.


  1. Romain

    I think that there is, or should be, a crucial difference between giving a cheque and, in effect, instructing an associate to give a cheque.
    No payment has been made at all in the latter case and there is no guarantee that it will ever actually be made.

    Instructing an associate to make a payment is not making a payment.

  2. ianringrose

    The problem is that if the tenant does not contract DPS to confirm how the deposit should be returned, it will NEVER be given to them; therefore a tenant can stop a S21 for ever, unless you consider it to be like a cheque.

    Once again the deposit laws prove to be unworkable………….

    • Romain

      Very good point, Ian.

  3. Erol Topal

    A deposit is taken to provide protection against breach of covenant, it never belongs to the landlord. Under the various schemes a landlord may assert an entitlement to some or all of the deposit where breach of covenant occurs – most commonly for failure to pay rent or dilapidations – and sometimes recovers that loss from the deposit. By informing the scheme that the deposit can be released to the tenant the landlord, either expressly or by implication, waives any right to seek deductions from the deposit and any contractual rights are given up too. For me therefore the landlord need do no more to ‘return’ the deposit.

    • Giles Peaker

      Except that, a) that would mean a significant difference between custodial and insurance schemes as to when deposit returned, b) waiving deductions and contractual rights does not, in itself, amount to return.

      The parallel would be a landlord saying to the tenant, ‘I won’t make any deductions and I’ve told the managing agent holding the deposit to return it to you’. That would not be sufficient to be a return.

    • Giles Peaker

      Yes, although confused in that case by the landlord having served a s.21 before the DPS confirmed the release of the deposit. And again, just a county court case, so nothing binding.

  4. Dambudzo Tenner

    Yes, it is only county court and I hadn’t meant to give the impression that I thought it was binding, I had just meant it was another case that had been decided differently to the one in the post. I do find it interesting that in Ahmed the Defendant refused repayment even though release had been authorised and she still succeeded. Although I suppose as you say the fact no mention of the deposit being released in full was considered. Your note says deemed service of the s21 was on the same day the landlord received confirmation of the credit release of the deposit. Still think it is at odds to the above post, ie confirmation of release of the deposit by credit (not date of return) vs authorisation of release (date of return). As you say a higher court is bound to have the final say soon. Thanks for running such an informative blog.

    • Giles Peaker

      In Boudia, the landlord served the s.21 on the same day as sending the authorisation request to DPS, so jumped the gun by any measure. From the note on Newell, we can’t tell whether the landlord had received confirmation of authorisation of return by the date of service of the s.21, but it appears so.

      Of course the tenant can refuse return of a deposit – if payment and holding of a deposit is a contractual term of the tenancy agreement, the tenant can insist upon it as just as much as the landlord.

  5. Dambudzo Tenner

    I had read the post in Boudia as stating the s21 notice was deemed served on the same day as the landlord received confirmation from the DPS of the credit release. Also your post on Newell says the court held the date of return as the 22.12.15 ie the date the landlord authorised release, or have I misunderstood that?

    I see your point on refusing the deposit return but guess had just taken the court wouldn’t take too kindly to such a tenant who had refused the repayment from what the High Court said in Lingfield No2 (though on cheques) about tenants not using the statutory scheme as a ‘blunt instrument to defeat a labdlord’s interests’. It is still surprising how much litigation the tenancy deposit scheme has produced.

    • Giles Peaker

      Ah, yes – authorisation on same day as deemed service of s.21. Sent on same day as authorisation request. So thoroughly unclear which was ‘first’ in any event.

      Cheques are an entirely different matter. Hence why I think it is a bad analogy for the court to have gone with in this case.



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