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Deposit penalties. How many breaches is too many?


Howard v Dalton, County Court at Dartford, 7 May 2019 (unreported, note of judgment with grateful thanks to Rea Murray of 4-5 Grays Inn Square).

A quick note, because Rea Murray has done the heavy lifting for me. We’ve seen the ‘claims for multiple deposit breaches’ issues before, although in the guise of whether a claim could be brought for a number of tenancies at once. This was a county court appeal to a circuit judge on exactly what counted as a claimable breach, and how many could be claimed per tenancy.

Ms H was the tenant of Mr D. The first tenancy was in 2007. A deposit of £900 was paid, then on signing the tenancy agreement, a further £845 was paid to Mr D, with a receipt given saying ‘deposit remainer’. There were a further seven tenancy agreements entered into between the parties.

At first instance, it was found as fact that the deposit was not protected in a scheme until 2014, and no prescribed information was ever served.

Ms H brought a claim. Mr D defended, but both parties were unrepresented and Mr D did not attend first instance trial. Ms H’s particulars claimed breaches of Housing Act 2004 s.213(3) (failure to protect) and s.213(6) (failure to provide prescribed information) in respect of eight tenancies, but did not specify a sum.

The first instance district judge held that there had been two breaches (failure to protect and failure to provide prescribed information) for each of the eight tenancies, so 16 breaches. The award was three times the deposit of £1745 for each breach, giving a total of £83,760.

Perhaps unsurprisingly, Mr D appealed.

On appeal, the circuit judge held:

S.214 Housing Act 2004 provided a point of access for damages for either a breach of s.213(3) or s.213(6). A single award of damages was intended regardless of the number of individual breaches.

A failure to protect under s.213(3) would inevitably give rise to a failure to provide prescribed information under s.213(6). It was not Parliament’s intention that damages should be awarded for each breach, rather than only either breach. The requirement to provide prescribed information could not be independent from the requirement to protect.

The penalty was therefore one penalty per tenancy.

Mr D had raised limitation on appeal, and this was valid as the pre-action correspondence had not set out that eight tenancies would be relied upon at trial. 6 years limitation was applied, reducing the tenancies claimable to four.

The second payment of £845 was rent in advance, not a deposit – applying Johnson v Old (2013) EWCA 415 (our report).

The penalty was reduced from three times to two times the deposit, (not entirely clear why).

The deposit penalty payable to Ms H was therefore £7,200.


While slightly raising an eyebrow that Mr D succeeded on factual points (the rent in advance) on appeal despite not having turned up to trial, the legal points strike me as right.

S.214(1) Housing Act 2004 provides

(1) Where a tenancy deposit has been paid in connection with a shorthold tenancy on or after 6 April 2007 , the tenant or any relevant person (as defined by section 213(10)) may make an application to the county court on the grounds—

(a) that section 213(3) or (6) has not been complied with in relation to the deposit, (…)

So, stated as in the alternative, not additionally. At least per tenancy.

On the other hand, the finding that Superstrike Ltd. v. Rodrigues (2013) EWCA Civ 669 meant that claims for breaches in respect of each subsequent tenancy could be brought in one claim also strikes me as right. (Subject to any limitation defence, of course – 6 years prior to issue of the claim).

The reduction from 3 times penalty to 2 times penalty is also somewhat mysterious, but such is the nature of the court’s discretion in this regard.

The usual caveats apply – this is a county court appeal, so not binding and persuasive at best, save in the CJ’s immediate area. But it makes sense, at least on the number of breaches that can be raised.




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. kjetilniki

    I do not know the full facts of the case and there may be other matters contradicting my thoughts.

    Mr D had raised limitation on appeal, and this was valid as the pre-action correspondence had not set out that eight tenancies would be relied upon at trial. 6 years limitation was applied, reducing the tenancies claimable to four.

    As I read the posting
    1 in pre-action corresp T did not set out that all 8 tenancies would be claimed.
    2 T did claim for 8 tenancies
    3 L did not plead limitation
    4 an award was made for 8
    5 L appealed
    6 the Circuit Judge allowed L to claim limitation for the 1st time on appeal

    As I understand it, limitation has to be pleaded to amount to a defence and that it is too late to raise it for the first time on appeal. Not mentioning it in pre-action correspondence does not seem to me to be a relevant reason to allow it ion appeal, (as opposed to T having been positively misleading)

    • Giles Peaker

      I’d broadly agree. However, it seems that the particulars mentioned 8 tenancies, but the prayer did not set out a specified sum. So it may also be that the pleaded case was not clear on extent of claim.

  2. Michael Barnes

    S214(1)(a): it is my understanding that “or” in English is an inclusive or, not an exclusive or (i.e. at least one of the items, not exactly one).

      • Tim Taylor

        Ryan Hocking at Gatehouse chambers agrees rather with Michael fairly convincingly to my mind that the statutory language is rather ambiguous than so clearly cut as suggested by the circuit judge:

        “ It is an open question whether breaches of sections 213(3) and 213(6) are cumulative – each giving rise to a separate entitlement to damages under section 214.
        The wording of section 214 does not suggest a clear answer to this question. The wording of sections 214(1), 214(2), and 214(2A) means that an entitlement to damages hinges on whether “section 213(3) or 213(6) has not been complied with in relation to the deposit”. The question is whether the word “or” renders these different routes to an entitlement to damages mutually exclusive or cumulative.

        In the face of that ambiguity, broader and less technical arguments are available. At the core of those arguments is this: where a landlord has breached section 213(3), compliance with section 213(6) is impossible. Whereas a breach of section 213(6) is capable of standing alone, a breach of section 213(3) must inherently also be a breach of section 213(6).

        On the one hand, this suggests that damages ought to be higher: a failure to protect is arguably more serious than a failure to provide information, and this “doubling up” takes account of that without interfering with the assessment of quantum for each breach. Further, this approach ensures that each of the obligations under sections 213(3) and 213(6) are taken seriously by landlords, as each carries its own penalty.

        As against that, this interpretation effectively results in a double penalty arising from one omission. That is an inherently surprising result, and one which is not made explicit in the wording of the statute. Further, landlords are still incentivised to comply with both obligations under sections 213(3) and 213(6), as the amount of damages payable does not necessarily reduce merely because the first step of complying with section 213(3) is taken.

        In the author’s view, these arguments are finely balanced, and neither can be regarded as plainly correct in the absence of authority on the point.”

        • Tim Taylor

          Okay, let’s try that one more time:

          “Ryan Hocking at Gatehouse Chambers agrees with Michael fairly convincingly to my mind that the statutory language is rather more ambiguous than so clearly cut as suggested by the circuit judge”

  3. Darren King

    This is an interesting case but I don’t understand the application of the 6 year limit. The Limitations Act specifically allows for the postponement of the limitation period where a deliberate commission of a breach of duty takes place in circumstances in which it is unlikely to be discovered for some time. Surely a tenant is most likely to become aware of the non-protection of their deposit at, or towards, the end of their tenancy and so the limitation period should run from when they became aware of it rather than from the date of the actual breach of duty. It is also very difficult to see how a landlord could claim that such a breach is anything other than a deliberate act. Maybe, as the claimant was unrepresented, he failed to make this point in court.

    • Giles Peaker

      I very much doubt it was pleaded. However, I doubt it would work anyway. The requirement at s.32 Limitation Act 1980 is for fraud or deliberate concealment by the Defendant. That would require considerably more than just not protecting the deposit. I don’t think s.32(2) rescues the position either, as the claim was in part for failure to provide the prescribed information, which the tenant arguably should be aware of at the time – that was not concealed.

  4. Darren King

    I can’t believe that this principle has never been properly established in court. The important bit is in s32(2).

    The LA 1980 s32(1) b allows for the postponement of the limitation period if ‘any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant’
    s32(2) For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to a deliberate concealment of the facts involved in that breach of duty.

    A landlord can’t simply avoid the penalty by saying he didn’t deliberately fail to protect the deposit as this would amount to ignorance of the law, or honest mistake, being accepted as a legitimate defence. The decision not to protect must therefore be considered a deliberate commission of a breach of duty and, as it perfectly reasonable to accept that a tenant wouldn’t immediately discover that their deposit hadn’t been protected, this must surely amount to a deliberate concealment.

    I think the understanding of the word ‘or’ is possibly a bit fuzzy but as the prescribed information can’t be provided when the deposit isn’t protected it seems reasonable to to say that the plaintiff can claim against the landlord for either not protecting the deposit or for failing to issue the prescribed information but not both for the same breach of duty.

    • Giles Peaker

      A breach is ‘likely to be discovered’ immediately where, as here, it includes not providing the prescribed information.

    • Tim Taylor

      I don’t see any conflict there: ignorance of the law is no excuse when it comes to obligations under s213, but how can an omission possibly be considered deliberate when there are massive incentives that typically outweigh any others that would counterweigh in favour of not complying?

      So how can omissions based on ignorance then possibly give way to a finding of deliberate concealment or deliberate anything else for that matter?

      Doesn’t make any sense to me Darren.

  5. Darren King

    This assumes that the tenant knew that they should receive it. It must surely be difficult for the landlord to argue that the tenant should have been more ‘in the know’ about deposit protection law than the landlord was. If the Landlord can say he didn’t protect the deposit simply because he didn’t know he had to, then the tenant must be able apply for the limitation period to be postponed if he didn’t realise that he should have received the prescribed information. Surely this is why not supplying the information is also a penalty carrying offence. It can never have been the intention of the law to allow the worst offending landlords simply to get away with it after 6 years of being in breach of duty and this must be why the LA 1980 makes allowances for this type of situation.
    I believe that another part of the LA 1980 also offers postponement of the limitation period in situations where the plaintiff is at a disadvantage to the defendant in some way. eg A longterm tenant (of more than 6 years) may not want to start proceedings until the end of his tenancy for fear of facing a retaliatory eviction.

    • Giles Peaker

      No, it doesn’t depend on the tenant’s actual state of knowledge. A breach which results in not providing the tenant with something that the tenant could or ought to know that they should receive is not ‘unlikely to be discovered’. Quite the reverse. Nor is the landlord’s state of knowledge relevant for limitation.

      6 years is the absolutely standard limitation on contract/statutory claims. There is no reason why deposit penalties should be different. It would be easy to make an argument for the unfairness of limitation on every kind of case, deposit cases are not special.

      There is no other postponement of limitation of the kind you suggest.

  6. Darren King

    Once a tenant has paid their deposit and moved into a property they really aren’t likely to give it much thought again until they are in the process of moving out. Are you saying that, in the eyes of the law, the tenant is held to have a duty to investigate the workings of deposit protection law within days of moving in and then to identify any legal shortcomings in the behaviour of the landlord. What if the landlord said that the deposit would be protected and the tenant simply believed him? Does this not amount to ‘concealment’?

    • Giles Peaker

      It does not depend on whether or not the tenant was actually aware of what they should receive. The test is whether the circumstances are such that the breach is unlikely to be discovered. A failure to provide the prescribed information is not a breach that is ‘unlikely to be discovered’ because it involves not providing the tenant with something that should have been provided. It is an overt breach.

  7. Darren King

    I think we may end up going around in circles a little on this one.
    I concede that there is a difference between something being ‘unlikely to be discovered’ and it being ‘undiscoverable’. Clearly, it would be ‘possible’ for the tenant to discover that the landlord is in breach of his duty by reading up on deposit protection laws and processes and contacting all of the government approved schemes. However, the normal circumstances surrounding a rental deposit are that, once paid, it is unlikely to be thought of again by the tenant until the end of the tenancy, therefore making the landlords failure to protect it ‘unlikely to be discovered for some time’ especially if he has lied about doing so.
    How is the tenant to know that the prescribed information should arrive when there is no statutory requirement on the landlord, or anyone else for that matter, to tell him it would be sent? So something he isn’t expecting doesn’t arrive! I’m not sure that would ring alarm bells for me.
    I think you are putting too much onus on the tenant, who may not have the capacity to investigate and make judgements as to the landlords compliance with the law, to identify that the landlord is in breach of his duty.

    • Giles Peaker

      No, not circles, as you are stuck on the tenant’s actual knowledge of the law, which is irrelevant. Ignorance of the law is an individual state, not true of all tenants, by a long shot. So, that cannot amount to ‘circumstances in which it is unlikely to be discovered for some time’.

      Look at it this way, the landlord couldn’t possibly know what the specific tenant knew or didn’t know about deposit rules, so it is not in effect concealment.

      Recall the How to Rent guide, which must also be provided, makes the requirement for the prescribed information clear, though that is not a vital factor.

  8. Darren King

    Ok, straight lines with a brick wall at the end.
    It’s not that I’m stuck on the tenant’s knowledge of the law but I have been desperately racking my brain as to where, using your interpretation, s32(1) b / s32(2) could ever be applied. I can’t think of a single situation where, if the potential plaintiff had spent enough time, effort and money on investigation, it would have proved impossible for him to discover, within a very short space of time, a breach of duty, etc, against him.
    Out of curiosity, was the ‘How to Rent Guide’ available as long ago as 2009? Even if it was, just suppose that the same landlord who declined to protect a deposit had also failed to provide a guide to his tenant that could give a clue as to his possible breach of duty. Might that happen?
    I just find it depressingly disappointing that you are saying that there is absolutely no recourse to the law for a long term tenant who has been intentionally mislead by a rogue landlord who lied about protecting a deposit for a period of over 10 years. Basically, if you can maintain a lie for long enough, eventually you get away with it! I just don’t believe that the Limitations Act 1980 was designed to offer protection against prosecution for this class of landlord.

    • Giles Peaker

      There are plenty of situations where it might apply. Even with deposits – imagine a landlord faked a deposit certificate.

      It isn’t about ‘time, effort and money on investigation’. Plenty of tenants were aware of deposit rules. And that, by itself, means that you are talking about the individual tenant’s state of knowledge.

      Look at limitation on tort/negligence claims. Where there is a ‘knowledge’ exception, that runs from when the claimant knew or ought reasonably have known that they had suffered a loss – not when they knew that had a cause of action, and not when that specific person knew, but when a reasonable person would have known.

      And limitation of 6 years means you can claim in respect of breaches within the 6 years prior to date of claim. So on your example, there would have to have been no renewal tenancies, or no statutory periodic arising within the last 6 years to avoid a penalty. You’ve also changed your example to being a landlord who had lied about protecting the deposit. That might be different – s.32(1)(b) – depending on what the landlord did. Active steps to hide the breach would be deliberate concealment. What you were arguing was the application of s.32(2) in a situation where the landlord had simply failed to protect the deposit. That is not workable, I think.

      Again limitation applies to all cases. It could be argued to be unfair in all cases (eg why does a tenant only get 6 years claim period for disrepair, when a leaseholder gets 12 years?). Deposits are not a special case and there is nothing to make them a special case.

  9. Sara

    Have there been any other cases on the limitation point since this one? Presumably in the case of an AST starting over 7 going to renewal as a periodic tenancy a year later (over 6 years ago) the tenant would now be out of time to raise any claim or counterclaim in respect of deposit breaches? Do you agree that a Section 21 notice however still remains invalid unless the deposit is released? Under DPS if the tenant does not confirm acceptance of the deposit arguably it has not been returned to the tenant before issue of a S21. In these circumstances would you consider that a landlord is able to successfully issue S21 proceedings on the basis that the tenant cannot counterclaim for deposit breaches in light of expiry of the limitation period?
    If a deposit breach is still within the limitation period can a tenant counterclaim for deposit breaches in respect of any S8 proceedings raised by the landlord?

    • Tim Taylor

      My opinion is that a tenant can claim or counter claim after 6 years expire, and they will only be barred from so doing if the defendant pleads the LA1980 in defense. And furthermore that LA1980 and its relevant periods only apply to compensation claims such as under S214, and accordingly have no bearing whatsoever on defence in S21 possession proceedings based on prescribed requirements under which S21 possession must be refused.

      • Giles Peaker

        The limitation point is settled. See – Deposit penalty claim falls under s.9 Limitation Act.

        (1) An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.

        And that disposes of the ‘plead it and get away with it if the defendant doesn’t raise limitation’ argument too.

        A breach invalidates a s.21 notice until remedied/deposit returned/a new tenancy with compliance.

        • Tim Taylor

          I want to say that someone here, possibly yourself, had suggested that LA1980 wouldn’t come into play unless invoked as a defense. And logically, how would it? Would every DJ as a matter of course proactively check for LA1980 periods? Actually it is not so difficult to imagine this being the case.

        • Giles Peaker

          Not on s.9. On a contract claim, yes.

  10. J

    Why is it a 6 year limitation period? Surely a deposit claim by a tenant (or ex-tenant) is an action on a specialty (i.e. a statute) and so has a 12 year limitation period?

    • Giles Peaker

      6 years under section 9 Limitation Act? Sums recoverable by statute?

      • Sara

        Thanks Giles
        Do you have any comment on the other issues re validity of S21 if deposit breaches out of time and whether a tenant can counterclaim for these in S8 or S21 proceedings? Is there any relevant case law on these issues?

        • Giles Peaker

          Blimey – all of this is dealt with elsewhere on the site if you care to look. But…
          S.21 remains banned if deposit wasn’t protected, can’t be served until return of deposit, regardless of limitation (as limitation only applies to claims). (Different for failure to provide prescribed information, which can be provided late for a s.21, but is still a penalty breach, subject to limitation).
          Tenant can counterclaim for deposit penalty (if within limitation) in both s.21 and s.8 possession claims (if s.8 claim is for rent arrears and there is a defence of set off).
          There isn’t any case law on these specific issues because as far as I can see there is no argument about them.

      • J

        Collin v Duke of Westminster [1985] 2 W.L.R. 553? Is it a debt which is recoverable by statute (if so, then agree 6 years) or is it a cause of action which is created by statute (if so, then 12 years). I lean towards the latter.

        • Giles Peaker

          Hmm. Interesting. Arguable either way, I think. One to watch out for.

        • Tim Taylor

          Giles, I’m having difficulty even working or how to conceive of a “counterclaim” to S21 possession proceedings. What did you mean by that (in reply to Sara; for some reason I’m apparently not able to reply to that particular comment)?

        • Giles Peaker

          Tim, it isn’t hard to conceive. Section 21 possession claim, defended on basis of invalid s.21 due to deposit rules breach, counterclaim for penalty.

        • Tim Taylor

          Well it was just hard to conceive because a S21 possession claim can’t involve money so it was hard to imagine just how a money claim would constitute any sort of “counter” when S21 possession isn’t founded on debt to begin with, although on second thought if it’s not accelerated then it certainly can involve a claim for money (I think), so that’s far from inherently the case; touché.

          That said, it still isn’t fully a counter in every sense because even if the S214 succeeds as a “counter” to the S21 possession claim, …well, I was about to say it still wouldn’t have any basis for changing the outcome of the S21 possession proceedings. Which upon second thought does remain partially true: it is the breach of S213 that invalidates the S21 NSP. So that is somewhat distinct and independent of any (counter) claim for money that a tenant would or would not like to make under S214. Whether or not a tenant pursues this penalty amount doesn’t change the fact that the breaches of S213 would invalidate the S21 so the possession claim would have to fail. In this sense it is hard to imagine how it can meaningfully be a “counterclaim” other than toward the end of combining the proceedings, saving the tenant from having to pay a separate court fee, and generally making the court’s admin etc all around more efficient.

        • Giles Peaker

          A counterclaim is not a defence (though it can be part of one by way of set-off). It is simply a related claim.

    • Jenny

      Hi, I’ve just been reading all the comments on here. Perhaps MY case needs to be tested? I have been passed from pillar to post. Even solicitors cannot get the answer correct. My tenancy has been statutory periodic since 2011. All agreements, up until this date, mentioned the deposit was registered in a scheme.
      Section 21 issued this year, deposit protected with a different scheme, on the same date of the issue. Its just been discovered it was never protected anywhere prior to the sec21.
      This lay undiscoverable for well over 10 years and only discovered with information received from a scheme and NOT the landlord. Why? Because of false information on 4 TAs and no more information ever provided from 2011.
      Apparently I have no rights and passed 6 Yr limitation, regardless if I knew or not.
      Nobody can do anything = Landlord gets away with it

      • Giles Peaker

        Hi Jenny

        Sounds fairly straightforward to me:

        1. If tenancy deposit not protected within 14 days (in 2011) of the start of the most recent tenancy, or when the tenancy became a statutory periodic then the s.21 notice is invalid unless the deposit was returned before the s.21 notice was served. From what you say, the section 21 notice served on you is invalid.

        2. If your tenancy went statutory periodic in 2011, then you are out of time for a deposit penalty claim on the failure to protect.

        3. As one of the prescribed requirements for deposit protection is that the tenant is provided with the deposit certificate, it wasn’t ‘undiscoverable’. Indeed, it is very possible to check whether a deposit has been registered with all of the schemes. You may well have been misled, but it wasn’t undiscoverable.

        4. If it is correct that the s.21 is invalid, your landlord can’t do anything about it without returning the deposit to you and then serving a fresh section 21.

        • Jenny

          Hi Giles, when the tenancy went into periodic it was going by the earlier terms on the agreement dated 2010, no new signed agreement was ever issued after this date. Also, If no infornation was given on the original statement about the requirement to register with any scheme, within the ‘scheme details’ on the TA, no certificate issued at ANY time, could it not be argued that the knowledge of requiring to protect deposits within a scheme and all the law required with it as to rights, was therefore concealed by the landlord as to avoid and eventually be free from any penalties? This seems extremely unfair to all tenants who have been on long term periodic tenancies and are only made aware of the law when they are asked about the validity of section 21s issued. Due to previously ‘false information’ on their fixed term agreements they had no reason to question anything due to the law being correct at the time.?

        • Jenny

          I would also like to add that the responsibility of obtaining correct information shouldn’t be blamed on the tenant as the tenant was already in situ pre 2007, I.e, pre-DP legislation with the periodic rolling into pre-localisms act. If this is the case then the tenant is not at fault as they can’t possibly know anything unless the requirement to trigger is suggested by means of a section 21 OR the tenant is to be required to have SERIOUS knowledge of the law and all its updates?

        • Giles Peaker

          No, it doesn’t matter that the first tenancy was pre 2007. What matters were tenancy agreements entered into after 2007.

          It was always a requirement for the tenant to be provided with the prescribed information, from 2007 onwards. What the landlord did, on your account, was not correct in law at the time.

          If the landlord had provided you with a fake deposit certificate, there might, just might, have been an argument on fraudulent concealment, but this was apparently not the case.

          Ignorance of the law is not a defence for a landlord who failed to protect a deposit, but equally, I’m afraid, it is not a basis for a late claim by a tenant.

        • Tim Taylor

          Sorry I must say this doesn’t seem in my mind to hold water Giles… as you say, ONE of the requirements of S213 is to provide PI, but S214 allows applications on grounds of breaches of both S213(3. & 6).

          Firstly it seems quite arguable to me that even if it wasn’t so “unlikely to be discovered” as you suggest it inherently so clearly wasn’t, doesn’t it seem that the landlord certainly still took active, presumably-deliberate steps to conceal the cause of action from the tenant’s mind, and to suggestively dissuade them of the existence of any cause under S214, even if savvy tenants, even if taking the false information in the ASTA at face value, might only be dissuaded of the existence of one of the grounds for an S214 claim?

          Secondly, what stops Jenny from simply specifying her claim to be on the ground of S213(3) rather than on that of S213(6) and then pleading that she was dissuaded of the existence of this ground for so long that the period should not be found to have begun until recently?

          Finally, if it was me then I would defend the S21 on grounds of lacking PI, not fatal unprotection, since the deposit was actually protected at the time of serving S21. Then let the LL serve the PI, pay another S21 filing fee, wait for their second hearing, and then defense on fatal non-protection and let them serve another new S21, let it expire again, and go through the whole merry-go-round yet once more. Is that a sadistic bluffing tactic? Perhaps from one perspective, though from another HMCTS can surely use the extra bobs amid all the austerity.

        • Giles Peaker

          Tim. On defending – it is a good thing you aren’t, to be honest. Step by step…

          A deposit can’t be protected late to enable a s.21 notice (at least not within the same tenancy). It has to be returned to enable a s.21.

          Prescribed information can be given late to enable a s.21, if the deposit was protected in time. Will still be a penalty breach, of course.

          On Jenny’s case, the tenancy had been statutory periodic since 2011, with no intervening tenancies. So, the late protection of the deposit does not enable a s.21. However, it is likely that the prescribed information for that late protection was given with the s.21 (as it sounds like the landlord had legal advice. Wrong legal advice, but still.)

          So, the best defence was failure to protect within the required period and no return of deposit.

          On extension of limitation, my reply to Jenny suggested there might have been a chance at it, but the failure to provide the prescribed information made it doubtful. You can’t realistically rely on ‘Well, I could reasonably of known about that breach (PI), but not the other one (failure to protect), because the landlord told me it was was protected.’ for an extension of limitation. The s.32 Limitation Act test is ‘could with reasonable diligence have discovered it’. The failure to provide PI would, at the least, be an alert that there may be an issue with the deposit.

  11. Sara

    Thanks for clarifying Giles. As a valid S21 is dependant on return of the deposit which in the case of DPS is dependant on the Tenant accepting its return, theoretically it can never be open to the landlord to use after an initial deposit breach

    • Tim Taylor

      Okay, Giles. (Sincere) thanks for your roasting mockery.

      But that said, 1. While I reckon – on the limitation issue – that you are completely legally correct as to what a judge *should* do under the law, I would have major qualms, especially in a case such as Jenny’s, not to encourage one in her position to give the S214 counter claim a fling: in a counter claim there is I gather no filing fee, and the worst a judge can say is no, so there seems literally no reason not to try. In Jenny’s case however, the LL was so flagrantly deceptive that – especially given how much discretionary latitude HHJ Luba KC recently afforded himself to prejudice a party whom he had found unpalatable – we have also to remember that judges are only human and are certainly influenced and biased by their perceptions of what just desserts for the parties would be.

      See (“Are judges influenced by legally irrelevant circumstances?”)

      And 2. she said in her original vignette, on the one hand nothing about PI having been received, on the other hand “only discovered with information received from a scheme and NOT the landlord” although this admittedly was perhaps suggestively in reference to the having “been discovered it was never protected anywhere prior to the sec21,” not necessarily the subsequent protection. So I was going on the assumption that LL has protected the deposit and then served S21 NSP, but not to date ever served any PI.

      In this case, one seems to have two options in defending the S21 possession claim:

      1. Plead that they have never received any PI while being fully prepared to truthfully concede that perhaps the deposit has been protected.
      2. Raise the more fundamental and sustainably relevant issue of the fact that the deposit had never been protected until too late.

      Both would result in the defeat of the first/instant S21 claim, but I would personally prefer in this scenario to play dumb as to the second route of defence until I am truly out of other cards to play, because if I defeat the S21 claim on the second basis, then the next S21 claim may well be invulnerable to defeat as defence #1 will also have been rendered moot in the LL’s endeavours to mitigate #2. Certainly the landlord will be quite likely to return the deposit before service of the next NSP, thereby rendering defence #1 moot. By running defence #1 in the first round and saving defence #2 for the next go around, I’ll likely get an additional 3 or more months without having to move homes, or perhaps conditions will change altogether and the LL will forget about their desire to oust me.

      It’s unfortunate that Jenny’s case is probably now past and moot, but that’s what I was getting at (merely a different tactical approach rather than disputing any legal point). I reckon that seeming a little “naïve” on the law and not always accounting for every single insight that may have some relevance but holding some cards close to the vest can sometimes yield a greater tactical benefit than scoring 100% essay marks by raising every observation there may be to do about an issue. Like housing advisors who suggest that “you may want to let your LL know that their notice is invalid.” … like, why? What would that accomplish for a tenant over letting the LL find that out for themselves?

      In other words, what made the more fundamental and likely more enduring #2, as you say, the “best defence” rather than defence #1? Both would seem to fully defeat the S21 and remove any judicial discretion as to that outcome, as well as to equally give rise to S214 counter claims.

      • Giles Peaker

        If the deposit was not protected in time, it cannot be protected ‘late’ during the same tenancy so as to allow a section 21. There is therefore no point in defending just on the basis of no PI, as that admits the possibility that the deposit was protected (and can simply be remedied and a fresh s.21 served if so). The best defence is therefore deposit not protected, with no PI as a second string (and an unnecessary one).

        If the deposit is returned, then the whole breach of deposit protection hence invalid s.21 defence would fall away, but of course the landlord is likely to readdress the whole deposit position after losing on ‘no PI’ (and indeed would certainly face questions about when the deposit was protected at a hearing in any event). So I don’t think your ‘two bites’ idea is practical (and may face an argument of Henderson v Henderson abuse of process).

        On the limitation point. i) We don’t give individual advice here, ii) There may have been a shot at it, as I said, but not one that I had any confidence in, iii) Was the landlord deceptive? They could easily just have been using a standard form tenancy agreement which said deposit protected. You assume far too much there. Getting over enthusiastic on very limited details is always a hazard.

        Separately telling the tenant deposit was protected, providing false prescribed information and so on would go to active deception. Using a standard form tenancy agreement which mentions protection – you would seriously struggle to meet the threshold with that.

  12. Theo

    Has there – to your knowledge – been any judicial consideration of the principle that there is an award per tenancy as opposed to a single aware (of up to 3 x deposit) for a single application relating to multiple tenancies? (It is not clear to me whether it was argued in the above case that only one award ought to be made per application, regardless of a series of tenancies). I appreciate the point about the use of the singular ‘tenancy’ in s. 214, but the point seems to me to be properly arguable, in circumstances where there is (arguably) a single deposit which is simply rolled over a number of times in ‘renewal’ tenancies.

      • Jenny

        So basically, there’s no way for a tenant to give rise to postponement of limitations at all? Would it never be considered that the overall date of 2015 to comply as per the deregulation act could be considered as the date of breach and not 30 days from the start of the periodic? Also, if deposits are considered to be the tenants money and the landlord still had it sat in his bank account, possibly with a load more, earning interest, could it be argued that either; 1, due to the landlord not complying, all interest earned belongs to the tenant as he’s holding it illegally, 2, the start date of the return of the deposit before issuing a section 21 would be the end of the 2015 date, 3, claim for that interest should be sought, if a deposit was still being held within 6 years of making the claim alongside the claim for the return of the deposit?

        • Giles Peaker

          No. None of that.

          And the deposit isn’t being held ‘illegally’.

        • Jenny

          Apologies, “unlawfully” not “illegally” as I mentioned. Now all this confusion has led me to mix one issue with another on a different site. I quit before I get myself wrapped up in a straight jacket. Headache pills on the way Mr Peaker. Honestly though, you’ve been brilliant. Takes a special person to answer so many questions in short spaces of time. I’ve been a pain. Hahaha.

    • Tim Taylor

      Are you not literally describing the insights of Superstrike v Rodriguez? It’s hard to imagine someone writing your comment without having read a case in which the principle of that one was at least applied.

        • Tim Taylor

          “ any judicial consideration of the principle that there is an award per tenancy as opposed to a single aware (of up to 3 x deposit) for a single application relating to multiple tenancies”

          How is this not simply the central insight of Superstrike? Or is the comment proposing that claimants should have to bring separately atomised claims with their own fees and claim numbers, for each separate tenancy being claimed for, and that tenants should not be able to combine multiple tenancies’ breaches into a single claim?

        • Giles Peaker

          Superstrike did not address the multiple award point at all. As for the rest a) raised in my original post, and b) there is now a circuit judge decision for multiple penalty claims, not an authority but highly persuasive. Can I suggest you check more recent case notes on the issues before launching into lengthy but redundant comment on old posts?

        • Tim Taylor

          Hi Giles,

          Of course your suggestion is well noted, and I think it may actually be time to peel myself from the Internet for today and to go outside. And perhaps also to admit that I may be slightly addicted to your blog… The first step after all is to admit that one has a problem! :P

          Best regards

  13. Dave Keeley

    Can I get a transcript of Howard v Dalton ?

  14. Darren King

    It does seem a bit of an anomaly that if a landlord breaks the law, and then continues to be in breach of the law for a period of 6 years without being discovered, that the crime disappears, and that the victim, who is still is a position of disadvantage, has no recourse. I am sure that UK law must be full of similar examples but I can’t believe that this type of situation was ever the intention of the limitations legislation.

    • Jenny

      This is what I’ve been trying to understand too. Seems like there is a missing subsection just begging to be added somewhere in the Limitations act under contract claims. I can understand if it had been 6 years and the landlord had indeed cleaned up his act, but the intention of the deposit legislation was to stop rogue landlords. A landlord who carries on ignoring the law to his advantage by ways of reducing or escaping penalty, to me, suggests ROGUE.

      • Giles Peaker

        There is still a penalty, the landlord cannot serve a s.21 until the deposit has been returned to the tenant. That is not time limited. The date of breach – that which gives the tenant a right to bring a penalty claim under s.214 Housing Act 2004 – is the date the landlord fails to comply with the deposit requirements – to protect and provide prescribed information within 14 days of receiving deposit (pre October 2015) or 30 days (post October 2015). It is not a continuing breach, it is at that specific point (for each tenancy).

        Actually, before October 2015, the landlord could have protected the deposit late and escaped a penalty anyway.

        • Jenny

          So a failure to protect, let’s say, for arguments sake, on 10 renewal tenancies the breaches occurred. That non-time limited penalty is applied to all 10 breaches but the penalty only allows for a deposit to be paid back prior to the issue of section 21? Am I correct in reading that the landlord is not allowed to deduct anything other than rent arrears from that particular penalty? Wouldn’t that leave the door open to a later claim (if any) by the landlord, for any excessive payback of losses from damage or beyond wear and tear to items that should have been deductable (subject to restricted percentages) from the deposit?

        • Giles Peaker

          No, the non-time limited (s.21) penalty applies at all times that the deposit has not been correctly protected and prescribed information served. As far as the most recent tenancy goes, the s.21 penalty applies if the deposit was not correctly protected etc in respect of the current tenancy. (Ie, it doesn’t matter whether or not is was protected for previous tenancies, only for the one on which the landlord wants to serve a s.21 notice).

          In order to serve a s.21 the landlord has to repay the deposit. The landlord can seek to make deductions from the deposit for anything that the landlord would usually seek to make deductions (rent arears, property damage, whatever), but – and this is the crucial bit – the landlord can only make those deductions if the tenant agrees. Any tenant knowing that the landlord is returning the deposit just so that they can serve a s.21 notice would be foolish to agree any deductions at all.

    • Giles Peaker

      It isn’t an anomaly and it isn’t a crime. It also doesn’t ‘disappear’.

      6 years limitation is absolutely standard across most civil claims, and is less for personal injury. The ‘victim’ does have recourse as no section 21 notice can be served by the landlord until the deposit is returned to the tenant. That is not time limited.

      • Jenny

        Thank you for clearing up a lot of confusion. Also there’s some ongoing confusion. As to the compliance again the date the deposit was first paid. Some are stuck giving advice like, if you first paid before 2007 and first renewal began before 2007 except for those turning period, then any notice served would still be valid. Being a long term tenant myself, I took this to mean everything was correct and it has taken many questions and answers from yourself and others to confirm what was true. Even citizens advice seem to think my notice is valid as they are going by when the deposit was first paid. I’ve had to correct them myself due to a little fact that I knew. Even though I was living here, my name didn’t was never on the tenancy until a few years later. Would a deposit breach be likely to be picked up if the Tenancy start date on a protection certificate was different to the start of the tenancy? And also, does a tenant have to defend in order for the judge to take action on non compliance?

        • Giles Peaker

          Jenny, if the tenancy began before 2007, the deposit didn’t have to be protected at that point. It would have had to have been protected on any renewal tenancy after 2007. And in any event, even if there were no renewal tenancies, it would have had to have been protected before a section 21 notice was served – section 31 Deregulation Act 2015.

          It is up to the tenant to raise a breach of deposit requirements. Nobody else is going to somehow ‘pick up’ on it.

          All the date based variations are ste out here –

  15. Jenny

    Following on, if a landlord does seek to make deductions from a deposit that should be returned, and the TA mentions the deductions are made AFTER the tenant leaves the property. Would this cancel it out considering a section 21 could not be issued? Would they still be able to raise disputes?

    • Giles Peaker

      After the tenant has left, they have lost their bargaining chip, so yes, will be a standard deposit dispute over deductions.

      • Jenny

        OK thanks Giles. What does a landlord need to prove if they went for a possession order? Would a judge still grant the order if the tenant hasn’t raised an issue of late protection? Its my understanding a judge has to make sure all paperwork was in order and a tenant can only defend/counterclaim if they were given a section 8 for rent arrears.?

        • Giles Peaker

          Jenny, we aren’t here to teach the basics of civil procedure. But , no if the landlord says the deposit was protected according to the rules, and it isn’t obvious that it wasn’t, it will be up to the tenant to put in a defence that the the s.21 isn’t valid. Judges are under a lot of time pressure and likely won’t catch the details by themselves, even assuming that they are apparent from the claim the landlord had put in.

          The tenant can defend a s.21 claim if the notice is invalid or defective. They can counterclaim for a deposit penalty, if there is such a counterclaim.

  16. Alan

    Hi Giles, very informative I must say. Can you provide some insight for me please? If a deposit was lost by the landlord but supposed to be held against subsequent tenancies, could it be seen as paid but not received on those following agreements? Does that affect the rules?

    • Giles Peaker

      A landlord can’t ‘lose’ a deposit. They are holding the tenant’s money on trust. So if they have ‘misplaced’ it, they will still be treated as holding it. And yes, it would be taken as received afresh on each subsequent tenancy.

      • Alan

        It’s a very complicated with periodic. On an AST it’s described within the tenancy what is expected during the ‘period’ But, on a rolling tenancy, its considered as a monthly or set period depending on contractual or statutory with no fixed end date. If the ‘period’ is monthly then the landlords responsibility should be every month he accepts the rent at the start of each month for that upcoming period and therefore classed as a breach of duty if he doesn’t comply within a particular month. With a deposit, its held over for each month or particular period that the continuing tenancy states. I suppose you could say ‘mini tenancies’

        • Giles Peaker

          No, a statutory periodic is a single tenancy, however long it goes on. A contractual periodic is a single tenancy and, depending on the wording of the agreement, simply be a continuation of the fixed term as the same tenancy.

  17. Peeta

    Has there been any successful cases where the ‘doubling up’ of penalty for breach of s213 (3) and (6) was accepted ? i.e breach of (3) and (6) was considered separate breaches giving rise to different penalty and possibly with different quatum of (1-3x)?

    • Giles Peaker

      No, the reverse, tried unsuccessfully. All our reported deposit cases are in the ‘deposits’ archive (via the top menu), so you can do your own research.

      • Peeta

        Thanks Giles, went through them all the way to 2015, but could not find any. But could not find this argument either: ‘Since, technically a PI can be served first along with the contract and then later deposit could be protected later (not the correct way of course), so s213 (3) and (6) can be mutually exclusive’. This means the counter argument, breach of s(3) will inevitably result in breach of s(6) might be negated to a lesser degree. But, I take it no one has been successful with it, but I am sure an argument could be made nevertheless

        • Giles Peaker

          It is actually in this post, the very one you are commenting on. And no, PI can’t be served without protecting the deposit, as it has to include the protection I formation.

  18. David

    Here’s one thing I don’t understand about the six year limitation on deposit penalty actions: why should the accrual of the cause of action always be dated to the initial failure to protect the deposit?

    For example, S.214(1)(b) of the Housing Act 2004 gives the tenant the right to apply to the court on the grounds “that he has been notified by the landlord that a particular authorised scheme applies to the deposit but has been unable to obtain confirmation” &c. Suppose, after the tenancy ends, that the landlord (re-?)notifies the tenant that a particular scheme applies, and the tenant discovers at that point that the deposit has been improperly registered with the scheme and is consequently unprotected. It’s only at that point that the tenant has grounds to make an application, so shouldn’t the accrual be counted either from the date of the notification, or even from the date of the tenant’s failed attempt to obtain confirmation (rather than from the date of the landlord’s failure to protect the deposit)?

    The situation seems different from the general (incorrect) argument that accrual should always date from the point of discovery, since in this case the notification itself forms part of the grounds for action (in addition to the failure to protect).

    • Giles Peaker

      Limitation would apply from first notification, not ‘re-notification’. If the tenant was told, or the tenancy agreement states, deposit is with X scheme, that will be the key date, as can’t rely on the happenstance of when the tenant might check (or if it does, there are hefty arguments about when the tenant did check, and the likelihood of it being the later claimed date). There may be a limitation point on what would be a highly unusual set of facts – the landlord, years after the deposit was taken, volunteering the false information that it is protected with x scheme.

      • David

        Thank you, Giles. That’s helpful.

        > There may be a limitation point on what would be a highly unusual set of facts – the landlord, years after the deposit was taken, volunteering the false information that it is protected with x scheme.

        Here’s one plausible scenario:
        (a) 2014: the landlord initially registers the deposit with Scheme A.
        (b) 2015: the landlord & tenant sign a new fixed-term AST, but the landlord fails to re-protect the deposit as Scheme A’s conditions require.
        (c) 2018: the landlord transfers the unprotected deposit over to Scheme B, supplying incorrect details (e.g. the dates of the initial AST rather than the active one), and notifies the tenant.
        (d) 2022: the tenancy ends, and the tenant discovers that the deposit is unprotected

        The deposit is unprotected from 2015-2022. If the accrual dated to the initial failure to protect the deposit (2015), the limitation would have expired by the time the tenancy ends. But, since it dates from notification (2018), the court can/must impose a penalty.

        • Giles Peaker

          Well no. Because on those facts, the tenant would have been able to get confirmation. There would have been a failure to protect in 2015, of course.

        • David

          How could the tenant have got confirmation? Since the dates given in 2018 were incorrect, the deposit was not held in accordance with Scheme B, as the tenant would discover on contacting the scheme administrator.

        • Giles Peaker

          No, you said the deposit was lodged with scheme B (albeit with incorrect tenancy dates). S.214(1)(b) just says tenant not able to confirm it is lodged with the scheme, but they would get that confirmation. If they find out not in accordance with scheme requirements, s.214(1)(a) applies.

          I’m sorry, but these increasingly convoluted scenarios don’t really go anywhere.

        • David

          > S.214(1)(b) just says tenant not able to confirm it is lodged with the scheme

          No, it doesn’t. It says “held in accordance with”, not “lodged with”.

        • Giles Peaker

          And the scheme would say that was the case, unless they had reason to believe that the details they had been given were wrong, in which case they would not have accepted the deposit in the first place. So what you are looking at is a s.214(1)(a) breach.

          S.214(1)(b) really dates to the days when it wasn’t known whether tenants would be able to search the scheme to check if the deposit was registered. Practically, now, it just restates s.214(1)(a) – s.213(3) and/or (6) has not been complied with.

        • David

          Why should the scheme administrator accepting the deposit in the first place be decisive? The scheme administrator accepted the deposit because he was led to believe that the details supplied were correct. If the details were actually incorrect (e.g. if the dates, the deposit amount or the address were wrong) then the deposit isn’t being held in accordance with the scheme.

          You raise an interesting point about the history of S.214(1)(b). But one reason it doesn’t seem to me to be a simple restatement of S.214(1)(a) is that the accrual dates are different: for S.214(1)(a) accrual dates to “has not been complied with” and for S.214(1)(b) it’s “has been notified … but has been unable to obtain confirmation”. My example where notification occurs some time after failure to protect is intended to highlight that difference.

        • Giles Peaker

          In your hypothetical, the scheme administrator would confirm to the tenant the deposit was being held in accordance with the scheme, because they would not know otherwise.

          S.214(1)(a) and (b) have nothing to do with limitation – they identify prerequisites for a s.214 claim to be brought, they do not identify when the cause of action arises. The date of breach – which is the date for limitation, remains the same.

          (After all, there has to have been a failure to correctly protect the deposit/provide the prescribed information. If the deposit was correctly protected, the landlord told the tenant that the correct authorised scheme applied, but the scheme messed up and couldn’t confirm that to the tenant for some reason, then there would be no claim – the landlord would have the defence of no breach of s.213 and the court would not be satisfied that either s.214(2)(a) or (b) applied).

        • David

          It’s conceivable that both the tenant and the scheme administrator discover the discrepancy at the point the dispute is raised (e.g. because the scheme administrator asks the tenant to confirm the tenancy dates at that point).

          But I’m more interested in your points about the breach, which bring us neatly back to the beginning of this comment thread. What is the basis for the claim that the date of breach (i.e. of the failure to protect the deposit) is the date for limitation? Another case involving limitation, Patel v Patel [2009] EWHC 3264, looked at a credit agreement (entered into over 12 years prior) that gave rise to an unfair relationship. The claimant argued that the defendant was barred by limitation, but the court found that the cause of action did not accrue until some 16 years after the agreement was entered into; in particular, it did not accrue at the date of the agreement that established the unfair relationship.

          The judge’s reasoning was similar to the complaints of other commenters on this post:

          > “It seems to me that it would be a serious flaw in the legislation if the claimant were correct that the time limit for seeking an order under s.140B expires 12 years after the credit agreement giving rise to an unfair relationship was entered into. This would mean that in cases where unfairness to the debtor has persisted for a sufficient length of time, including cases where the very length of time that the creditor has waited before taking steps to enforce the agreement is itself a cause of unfairness, the court would be powerless to grant relief.”

          While it’s not a precise parallel, it does seem to me to show that the date of accrual is not always the date of breach.

          > they identify prerequisites for a s.214 claim to be brought, they do not identify when the cause of action arises

          I’m missing something here, I think. Can there be a cause of action for sums recoverable by statute if the prerequisites set out in the relevant statute are not met?

        • Giles Peaker

          On the scheme administrator etc – yet more baroque elaborations and happenstances. But it doesn’t matter, because that is not the limitation date.

          There are lots of different limitation periods. It depends on the cause of action. There is, I’m afraid, no point in a comparison with Patel v Patel, as it is a completely different cause of action. Nor is there any point in comparison with cases where the cause of action arises on loss, as there is no loss involved – these are penalty claims. The relevant cause of action in a s.214 claim is clear and set out at s.214(2) – either s.213(3) and/or (6) have not been complied with or the court is satisfied that the deposit is not being held in a scheme. That cause of action arises on breach – the failure to protect the deposit and/or provide the prescribed info within the 30 day period. It is perfectly possible for the tenant to find this out on day 31. Limitation does not depend on the happenstance of when they did find out. The 6 year limitation period applies, from breach.

      • David

        A bit more on this:

        > can’t rely on the happenstance of when the tenant might check (or if it does, there are hefty arguments about when the tenant did check, and the likelihood of it being the later claimed date)

        Here’s one circumstance in which a tenant might convincingly argue that he only checked at a late point: a Section 21 notice was served, a possession hearing held, and a possession order granted, and the tenant didn’t contest the validity of the notice. If the tenant subsequently made an application under S.214 he might then argue that his earlier failure to contest the validity showed that he hadn’t failed (or, indeed, attempted) to obtain confirmation at the point of the possession hearing.

        I’d be interested in views as to whether such an argument would be likely to succeed.

        • Giles Peaker

          I think it highly unlikely. Indeed those sound like circumstances in which one would expect the tenant to have checked!

          I just don’t think the complete happenstance of when the tenant checks determines limitation. The breach is the landlord telling the tenant the deposit is protected when it isn’t.

          In fact, I’m pretty much of the view that s.214(1)(b) is largely pointless.


  1. Deposit Penalty – Multiple Breaches and Limitations | GRL Landlord Association - […] thanks to NearlyLegal for reporting this one. In Howard v Dalton, County Court at Dartford, 7 May 2019, a…

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