Nearly Legal: Housing Law News and Comment

Too soon? Prescribed information before a deposit taken

Siddeeq v Alaian. K00BF465 County Court at Mayor’s and City of London County Court. HHJ Hellman. 9 August 2024 (unreported).

A County Court Circuit Judge appeal from a possession claim at Brentford County Court, on the validity of a section 21 notice due to arguments over the deposit prescribed information. The key question was whether information given by the landlord could be ‘prescribed information’ in relation to the deposit if it was given to the tenant before the deposit was paid.

The tenancy agreement on this AST was signed on 12 November 2021.  The tenancy agreement, as is common, had a section setting out various items of the ‘tenancy deposit prescribed information’  and stated the deposit value. The end statement of the agreement said that the signature was the landlord’s certification of the information, and the tenant’s confirmation of its accuracy to the best of their knowledge. A Mydeposits scheme leaflet was provided with the tenancy agreement.

The deposit was paid by the tenant on 13 November 2021. The deposit was protected on about 19 November 2021 and the deposit protection certificate provided to the tenant, although not signed by either.

So the only signature as to the accuracy of the prescribed information where those of the landlord and the tenant on the tenancy agreement, signed before the deposit was paid.

The landlord served a section 21 notice on 3 November 2022 and a possession claim via the accelerated procedure issued on 24 April 2023. A defence was served. At first instance trial the District Judge held that the prescribed information could be given before the deposit was paid. The tenant sought permission to appeal, which was granted by HHJ Luba KC.

At the appeal, HHJ Hellman allowed the appeal. On the requirements of the Prescribed Information Order 2007, the Judge held (NB counsel’s note, not approved):

Both s213(5) and (6) and Article 2 of the Prescribed Information Order all require steps in respect of the deposit after receiving the deposit. In so far as the district judge said there was “no requirement” for those steps to be taken after receiving the deposit, he erred in law. It is not contested that information was given before the defendant paid the deposit. Therefore, I am satisfied that the grounds are made out. As Mr Gannon submitted, prescribed information is defined as being provided after the deposit has been paid.

It is not sufficient that information required to be provided is just provided. It must be provided as prescribed, i.e. after the deposit has been paid.

There is a legislative steer to this effect in para 2(1)(g) of the Prescribed Information Order which provides not only that the information has been given but also the amount of the deposit paid. If information is given before the deposit is paid then it is hard to see how the landlord or tenant could in good faith certify the amount of the deposit paid. No deposit had been paid.

On the landlord’s argument that a prohibition on serving a section 21 notice did not apply so long as section 213(6)(a) Housing Act 2004 was complied with, even if done before the deposit was paid, the Judge held (again, counsels’ note, not approved):

Mr Gannon’s answer is persuasive. Section 213(6) cannot be complied with as information before the deposit is paid is not prescribed information. Prescribed information is defined as information given after the deposit is paid.

There is a legislative steer towards this construction of s215 because s215 says the notice cannot be given until such time as s213(6) is complied with. If it is not a further step would be necessary. I am satisfied that this construction of the statute and the Prescribed Information Order is clear and straightforward and best gives legislative effect to protect the deposit and deal with disputes. It sets out what needs to be done and when it needs to be done and how breaches can be remedied. A construction which allowed the provision of information prior to the deposit promotes uncertainty, for example how long can it be provided before the deposit is paid for it still to be prescribed information?

Appeal allowed.

Our thanks to Kevin Gannon of Garden Court and Haroon Sarwar of TV Edwards solicitors for the note of judgment.

Comment

This may be of relatively limited application, as it is perhaps unusual for a deposit not to be paid at least at the same time as signing the tenancy agreement, but it is an illustration of of the risks of incorporating the majority of the prescribed information into the tenancy agreement itself.

I think the Court’s interpretation of the Prescribed Information Order has to be right. The information cannot be in respect of a deposit which is hypothetical or not yet received.

So, always check the sequence of prescribed information (in whole or in part) being given and the deposit being paid.

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