The Allocation of Housing and Homelessness (Eligibility) (England) (Amendment) Regulations 2016 have (finally) been made to come into force on 30 October 2016. These sort out the anomaly highlighted in Romans v Southwark LBC and SSDCLG and Alabi v SSDCLG about those with leave to remain granted under Appendix FM. Their eligibility for housing and homeless assistance is confirmed. A number of appeals have been stayed pending the regulations, which should now be resolved.

An interesting Scots deposit penalty claim case is here – Russel-Smith & Others v Uchegbu [2016] SC EDIN 64. The Scots deposit penalty provisions are different to those of England & Wales, not least in that instead of an order of between 1 to 3 times the deposit, the relevant Scottish provision is:

If satisfied that the landlord did not comply with any duty in regulation 3 the sheriff— (a) must order the landlord to pay the tenant an amount not exceeding three times the amount of the tenancy deposit;

So, the discretion is effectively unlimited between nil and 3 times the deposit. What is intriguing (apart from the usual wonderful Scottish law terms such as ‘the ish day’, is the approach taken by the Sheriff to the exercise of that discretion.

The landlord had admitted failing to protect the deposit in the 30 days allowed (and had only protected it after the issue of these proceedings), despite several warnings from the council. The deposit had been protected some 270 days late and had subsequently been returned to the tenants.

After accepting that the failure to protect was more to do with the landlord being generally a bit rubbish (I paraphrase) rather than a deliberate flouting of the regulations, and noting the late protection and subsequent return of the deposit (so not actual loss to the tenants), the court went on to find:

i.    Firstly, the lease lasted 334 days, for 270 days of which, the deposit was unprotected and the tenants deprived of protection from the scheme and the proper information. In my judgement, to mark the fact that the defender breached the regulations for a sustained period of time which subjected the tenants and the deposit to a risk the regulations are designed to avoid, the proportionate and appropriate starting point for sanction in these circumstances is £1550 divided by 334 multiplied by 270. This produces a figure of £1253. 

ii.   Secondly, to that sum I will add a weighting to reflect the fact that the landlady was repeatedly officially informed of her obligations and still failed to comply. I do not accept the suggestion this was wilful defiance of the regulations. I am more inclined, on a balance of equities, even if finely judged in this aspect of the case, to accept the submission that the defender was dilatory in attending to her obligations to protect the deposit and advise the tenants of their rights rather than in wilful defiance of the purpose of the scheme. In assessing this aspect I also weigh in the balance the fact that no actual prejudice occurred and in the final analysis the purpose of the regulations was not defeated and the deposit was returned to the tenants, in full, without dispute. I also take into account the early admission of breach in these proceedings and the responsible way the defender has remedied the situation through her agents. I had the benefit of seeing the defender during the proceedings and while it may be said; ‘There’s no art to find the mind’s construction in the face’, I am satisfied the assurances given by Mr Wells, that she deeply regrets the position she now finds herself in, are genuine.  For all these reasons, I will set the financial penalty to reflect this second factor, at £600. 

Accordingly, the total sanction I shall impose on the defender and award the pursuers is £1853.

Comment

In terms of the English & Welsh statute at least, this would be arguably to miss the point. The penalty amount is, as was clear when the legislation was made, intended to punish the landlord’s non-compliance rather than compensate tenants for the effects of non-compliance. To that extent, a calculation by the period of lack of protection would fail to meet the purpose of the Housing Act 2004, as being based upon the risk to the tenant, not the default of the landlord.

However, while the limits on the Court’s discretion may be different between Scotland and England & Wales  (0-3 times v 1-3 times), a broad discretion within those limits is a broad discretion nonetheless, and therefore virtually impossible to challenge or appeal. Unless, perhaps, there is an argument that a wholly wrong basis was used to arrive at an amount…