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The multiple deposit penalty claim question – yet again


Szorad & Anor v Kohli (2023) EW Misc 12 (CC)

A county appeal to a circuit judge on the perennial question of how many deposit regulations breaches can be claimed for in respect of the same deposit.

(To be honest, I’d though that although we don’t have a higher court judgment on the point, some sort of consensus had been reached. It appears not. Some of the history is here, and here, and here and here and here. )

Mr Szorad and Ms Kozmar were the assured shorthold tenants of Mr Kohli initially on a 12 month tenancy from July 2019, then on a statutory periodic until they left in December 2020. A deposit of £1,326.92 was paid. The deposit was never protected and was not returned to the tenants. The tenants brought a claim for the return of the deposit and statutory penalties for breach of the deposit regulations.

At first instance, the claimant tenants sought two penalties, one for the initial tenancy and another for the statutory periodic, arguing, as per Superstrike Limited v Rodrigues (2013) EWCA Civ 669 that the deposit was received again on the stat periodic tenancy arising.

The Deputy District Judge rejected this argument, holding

“(7) Those requirements under section 213 all presuppose that, once the deposit is received, it must be dealt with in a particular way, and of course there is an obligation to return it. But what they do not say, and what they could have said in clear terms (and I think this is germane to the interpretation of the obligations under the Housing Act) is that upon the creation of a statutory periodic tenancy, the deposit having not been secured in relation to the assured shorthold tenancy, a new obligation or a new right to compensation based upon that failure can be founded distinctly and separately on the subsequent alleged breach.

(8) In my judgment, although Superstrike is clearly authority for the proposition that it makes (see paragraph 5 above) it cannot be used for the purpose of construing the 2004 Act to give rise to what would in effect be the separate and distinct entitlement to another penalty in relation to the non-compliance with the deposit security requirement by reason of the creation of an SPT. In my judgment, although the claimants are entitled, due to the failure to protect, to claim the penalty in relation to that, they are not entitled to claim in relation to the subsequent failure to protect on the creation of the statutory periodic tenancy. Had the law wanted to do that, it could have done that in very straightforward and clear terms. So far as that is concerned, I find the entitlement is in relation to one breach, that breach being in relation to the failure to notify and secure within 30 days of receipt of the deposit.”

The DDJ added their view of what Superstrike meant.

“The relevant passages in the judgment really begin at paragraph 35. Lloyd LJ in that case held in effect that where a tenancy deposit was held under an assured shorthold tenancy which then converted into a statutory periodic tenancy, the deposit would continue to be held in relation to the statutory tenancy as it was held in relation to the assured shorthold tenancy. Any other interpretation of the relevant statutory provision would have necessitated the deposit having to be returned and then redeposited. It was perhaps therefore unsurprising that the correct interpretation of the statutory provision avoided this otherwise cumbersome administrative process.”

So a penalty of three time the deposit for a single breach only was awarded.

The tenants appealed to a circuit judge. HHJ Johns KC allowed the appeal.

Superstrike was authority for a statutory periodic tenancy being a new tenancy on which the obligation to protect arose again and the deposit previously received to be treated as received again.

S.215B Housing Act 2004 made no difference to that in that it treated deposits as protected for a replacement tenancy (new fixed term or statutory periodic) where the deposit had been protected during the original tenancy. This did not undo Superstrike save in those specific circumstances, which were not the case here.

The analysis in Superstrike not being altered by section 215B and that section not applying to this case, what I regard as the consequence of the analysis in Superstrike is not undone by the section. That consequence, as I have said, is that there must be multiple awards in this case. I will therefore allow the appeal and make the decision as to the level of the further award for the failure to deal with the deposit in accordance with an authorised scheme on the commencement of the statutory periodic tenancy.

Ms Alvarez asked for an award at a level of three times the value of the deposit. In my judgment, the right level is two times the value of the deposit. My reasons are these. The following factors, some of which inform the award made by the judge for the failure relating to the original tenancy, mean that an award in the amount of the deposit only would not be sufficient to do justice: (1) the respondent appears to be a professional landlord; (2) the deposit was not returned; (3) the respondent failed to participate in these proceedings, now including the appeal; (4) the respondent has failed to comply with the judgment, even by repaying the deposit.

However, two further factors point away from the further award being at the top end of the scale: (5) there has already been an award at the maximum level for the original failure between the same parties in respect of the same property having regard to some of the same factors; (6) it is hard to say that a landlord must have appreciated that there was a further failure on the commencement of the statutory tenancy in circumstances where the judge below did not accept the tenant’s argument. This reduces culpability in relation to this further failure.

So, overall 3x the deposit on first breach, 2x the deposit on second breach. And return of the deposit, which the landlord still hadn’t done.


I’ve always maintained the validity of ‘multiple penalties for multiple tenancies’, though it is a bit of surprise to see a full on misreading of Superstrike going on, rather than arguments over the extent of s.214 Housing Act 2004 in permitting multiple claims.

That said, reducing the penalty to 2x because the landlord had won at first instance, so shouldn’t be considered as culpable for the second breach, seems a bit of stretch. The landlord had never protected the deposit, or returned it, at all, and still hadn’t post first instance judgment. As the award is a penalty against the landlord, not compensation to the tenant, this was generous to him, I’d say.

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. Julie

    I specialise in supporting landlords who have failed to protect the deposit and I agree with the ruling here. I will always inform LLs that a stat periodic is a new ast and the penalty will apply again
    It’s a surprise the first judge was not so sure of the interpretation of Superstrike ruling and the benefit of the 215b insert
    But a stat is a stat and the appeal worked in the LLs favour here.
    But ultimately the law has been in place since 2007, it’s hardly something new that any LL can be forgiven for not being aware of

    What I do object too, it the ambulance chasing law firms who feel it there god given right to tell their client (tenants) they WILL get 3x Depo and send the most horrifically threatening letters demanding the same

    Yes if a penalty is due let the penalty for the crime, but it shouldn’t be an excuse for law firms to print money and scare people

    • Giles Peaker

      Hi Julie

      The appeal didn’t work in the landlord’s favour. He was hit with an additional 2x penalty.

      Anyone advising their clients that they *will* get 3x penalty is obviously iffy. But they are entitled to seek it, so a letter of claim seeking 3X penalty is entirely valid. Very much dount that these are law firms though. Solicitors don’t do this work by and large, not on a conditional fee agreement – I’d lay odds they are claims farmers.

  2. Ben Reeve-Lewis

    If claims farmers are doing DPP claims isn’t that a breach of the Legal Services Act in respect of litigation? I say this without actually knowing of any firms offering this service.

    • Giles Peaker

      Only if they do litigation. Pre issue demands aren’t litigation

  3. Daisy

    This judgement will be very helpful in negotiating settlements without going to Court.

    The simple argument that could have been made at the initial hearing was that if Legislators wanted to fully nullify Superstrike, they could have used the amendments brought in via the Deregulation Act 2015. Instead they chose to amend it so that if a Landlord corrects their defect and the deposit remains fully protected thereafter, then the deposit will be deemed as protected for subsequent tenancies. The fact that they did not fully nullify it shows they wanted it to continue to apply in the circumstances of this case.

    You are right Giles that these claims are primarily brought by claims farmers, I have had a fair amount of experience dealing with these firms and how they work, some of them are not very ethical (that is all I can say on a public forum). They have quite a slick business process, but had actually started to decline new cases simply because they can make more on other conditional fee claims in medical etc.

    However, I differentiate these firms from claims starting from “Tenant Support” organisations, again I will not name them even though I have found them to be generally pretty ethical, you can find out who I am referring to by checking out the employment history in Linked in profile of the claimant’s representative in this case.

    Personally, I think this is good bread and butter business for local Solicitors who can work with local housing charities, it can be very effective at preventing homelessness, dealing with arrears and providing a cushion for the Tenant in a new property, all without having to go to Court. For those that do go to Court, the largest case I have seen involved over £30,000 of sanctions and the highest costs I have seen were around £9700 including VAT but I have heard of higher.

    As for the Landlord in this case, the Judgement reflects the fact that they did not turn up to Court and they had not returned the deposit at the time of the hearing, as for the third element,

    “it is hard to say that a landlord must have appreciated that there was a further failure on the commencement of the statutory tenancy in circumstances where the judge below did not accept the Tenant’s argument. This reduces culpability in relation to this further failure.”

    I do not agree, this legislation has been around since 2007, Landlords are warned by the claim firms at the pre-action claim that it applies to each tenancy where the law was not complied with. Just about every Landlord organisation reports on this and informs Landlords of the risks of ongoing failure to protect the deposit. Ignorance of the law is not an excuse, I would have actually done it the other way around, 1x for the first failure, 1x for not engaging with either court and 2x for not protecting the second tenancy. My logic is that the longer it goes on the worse the failure and so the bigger the penalty should me.

    Time to escalate the claim to High Court Enforcement me thinks.

    • Giles Peaker

      Hi Daisy. I frankly don’t think it is good work for local solicitors. It would have to be conditional fee work, and recovery of costs and damages is frankly a high risk. Plus the costs occasioned by a daft but determined litigant in person landlord can be huge, and likely to be taken as disproportionate.

      But there may be solicitors interested in the work, I suppose.

  4. MGW

    Really helpful discussion, thank you!
    Just wanted to confirm that if prescribed information hasn’t been provided correctly, then multiple penalties would also be awarded; for each AST and statutory periodic tenancy.
    If the deposit amount is changed, would that constitute a material change to the deposit, requiring prescribed information to be re-issued, and an additional penalty if not?

    • Giles Peaker

      My view is that there should be an award for each (repeated) breach, at least in the last 6 years. But some judges still take the view that it can only be a single penalty. I think that is not right, but does mean that currently decisions vary.

      If the deposit amount is changed – I’m not sure if it requires PI to be re-issued. If it is increased then yes as that is a further deposit. If if it is decreased, I am less certain.

      • MGW

        Thank you for the clarification. When I had a deposit reduced, the scheme re-issued the deposit certificate. Could this imply that the prescribed information should be reissued?

        • Giles Peaker

          Possibly. It is not an argument that I would have any great hopes of success on.

          The trigger for prescribed info is whether the deposit has been received (or received again). An increase in deposit is obviously a fresh deposit. A decrease (or partial repayment, if you like) doesn’t seem to be an obvious new receipt of deposit to me.

  5. Monika Budjonova

    As a landlord currently going through this (being taken to court for multiple breaches), I am surprised that I have been told by several solicitors that the tenant has a claim for four breaches when her rent arrears in the original tenancy were the same amount as deposit. Having read the Superstrike case carefully, I cannot see how multiple breaches can occur if the tenants’ breach of obligations is the same amount of higher than the deposit as in this particular instance. I understand the principle and analysis in Superstrike. It seems to me, however, that precisely because of that principle and analysis, the deposit cannot carry over to the SPT if the amount owed by the tenant at the end of the original tenancy swallows it. Do you agree?

    • Giles Peaker

      We can’t give advice on individual issues.

      But you are wrong.

    • E

      Hi Monika,

      So sorry to hear you are going through this. Any update on the outcome? Unfortunately I have am going though this myself and just wanted to know the outcome.

      • Monika Budjonova

        Hi, somehow missed your message. This is still ongoing but will not be going in front of a judge. As a portfolio landlord however, I am keen to follow similar cases. How is your case going? You can contact me on

        • Giles Peaker

          Monika, I can only presume you didn’t ask your solicitor (or any of the several you consulted). The answer is simple. A deposit is not automatically reduced or extinguished by arrears of rent. The landlord has to request the deduction and, if the tenancy is ongoing, the tenant agree to the deduction. So the simple existence of rent arrears, without any further action by the landlord, at the point of a renewal tenancy, or an SPT arising doesn’t make any difference to the landlord receiving the deposit anew. There might of course be a counterclaim against the tenant for the arrears.

  6. Monika Budjonova

    I appreciate your answer and I am not looking for individual advice. Simply trying to understand how based on :

    “The defendant should be treated as having paid the amount of the deposit to the claimant in respect of the new tenancy, by way of set-off against the claimant’s obligation to account to the defendant for the deposit in respect of the previous tenancy, given that the claimant did not seek payment out of the prior deposit for the consequences of any prior breach of the tenancy agreement.”

    The claimant in this case is the landlord. So, he is entitled to seek payment out of the prior deposit for the consequences of a prior breach of the tenancy agreement according to this. By what mechanism does it follow that the payment is not considered to have been made and the deposit carried forward? In other words, how would it possible that the tenant didn’t discharge his liability under the old tenancy agreement for which the initial deposit was taken?

    • Giles Peaker

      I can only suggest you ask your solicitor, who I presume is being paid to advise you.

  7. davidrose6226ebbb41

    is it only one penalty for not protecting the deposit or is an additional penalty awarded for not providing prescribed information either? and if the deposit was protected but prescribed information not given correctly would that incur a penalty?

    • Giles Peaker

      If deposit not protected and PI not given, that is just the one penalty.

      If deposit was correctly protected but prescribed information not correctly given, that is one penalty.

      • davidrose6226ebbb41

        if half the deposit is protected and the prescribed information is given but is incomplete would that allow for 3x for the deposit not being protected AND 3x the prescribed information not being served correctly?

        • Giles Peaker

          No, it would still be one breach – failure to protect. That inevitably means the PI is wrong, so not given properly. Not a separate breach.

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