Case Law - Deposit Fines/ Sanctions
Much of the case law below has now been superceded by the implementation of the Deposit Legislation ammendments contained in
revised Legislation introduced April 2012.
The 2004 Housing Act clearly defines the Landlords obligations with regard compliance of Tenants Deposits (Schedule 10 of the Act
sections 213 - 215 deals with penalties. The
Localism Bill (Royal Assent on 15 November 2011) introduces further definitions for non-compliance with Deposit Protection.
The following cases determined a Tenant cannot bring a case for breach of Deposit Legislation for Tenancy has ceased to exist nor may they sue where monies are protected prior to court.
The above defences are now superceded with the introduction of the
Localism Bill and the 2004 Housing Act will be amended as follows.
- Deposit protected within 30 days (no longer 14 days)
- Issue Prescribed Information (The PRESCRIBED INFORMATION) ORDER 2007 No. 797 within 30 days (no longer 14 days)
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Where 1 & 2 above not complied with, return the deposit in full (or deductions only with Tenants' consent) otherwise no Section 21 Notice can be relied on until the court awards damages being ; return the deposit or and fine not more than three times the value of the deposit.
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"grounds for an application to a county court" also applies in a case where the tenancy has ended, and in such a case the reference in subsection (1) to the tenant is to a person who was a tenant under the tenancy.”
Below we review samples of where Tenants have been awarded 3 times the Deposit as compensations, used non-compliance to counter claim against rent arrears and had Section 21 Eviction Notices set aside (invalidated).
Draycott & Draycott -v- Hannells Letting Limited
High Court clarifies tenancy deposit protection. 12th Feb 2010
Landlord not fined even though late compliance failing to protect the deposit with the 14 day requirement. The High Court has provided much needed clarification to the tenancy deposit protection scheme under the Housing Act 2004. Mr Justice Tugendhat ruled that while agents are potentially liable for a failure to protect a tenancy deposit, a deposit that has been protected late does not attract any penalty provided it has been properly protected before the tenant commences legal proceedings.
Tiensia v Vision Enterprises Ltd (t/a Universal Estates)
Compensation claim three times the deposit Judge determined it is not the failure to protect within the 14 days period which is important, but the failure to protect at all. Therefore, the relevant time by which the landlord needs to have protected the deposit, is the date of the court hearing. Not 14 days after the deposit money was paid. Or the date when court proceedings are issued.
A section 21 and subsequent claim for possession would remain invalid
Bihari v House Trader (UK ) Limited
Central London County Court 14 January 2010 While we wait for the forthcoming High Court and Court of Appeal decisions in tenancy deposit cases, here is a tenancy deposit appeal, but, alas, only to a Circuit Judge, so not binding. Mr B rented a two bed property from September 2006 and paid the deposit of £850.00 in respect of that AST in September 2006. The AST was renewed in September 2007 and the landlord/agent House Trader (UK) Limited did not protect the deposit after renewing the tenancy. The landlord rejected Mr B’s representations that it should be protected and the claim came to Uxbridge County Court. At first instance, the District Judge accepted the landlord’s argument that s.212-214 Housing Act 2004 did not apply to renewed tenancies where the deposit had initally been paid before April 2007. HHJ Faber at Central London County Court allowed the tenant’s appeal, apparently on the basis that there was a deposit paid in relation to the premises and there was a post April 2007 tenancy agreement stating that a deposit had been paid in respect of that tenancy.
The landlord was ordered to pay £3400, being the deposit and 3 x penalty. Mr B was not legally represented, the appeal being conducted with help from a housing support worker, citing previous circuit Judge decisions in Saad v Hogan, Brentford County Court 16 February 2009, and Coutinho v Atkinson, April 2009, Clerkenwell & Shoreditch County Court.
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