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Much of the case law below has now been superceded by the implementation of the Deposit Legislation ammendments contained in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 Localism Act 2011 Legislation introduced April 2012. Where a Landlord (or their Agent) fails to comply with the Deposit Legislation
they are excluded from using the
Section 21 Process to evict their Tenants.
The Deposit Protection Law changed 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.
JUNE 2014 Latest CASE LAWS POST LOCALISM ACT
CASE PRE LOCALISM ACT ARE UNLIKELY TO BE VIABLE DEFENCE
The cases prior to the
Localism Bill ( 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. However the
Localism Bill (basically ended the use of these defences)The above defences are now superceded with the introduction of the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.
Hashemi & Johnson v Gladehurst Properties Ltd
O’Brien v Hill
Barnet County Court 22 September 2009 12 month AST granted on 9/6/08. Sec. 21 notice served on 12/6/08. Deposit received on 2/7/08 and registered with the DPS within time on 7/7/08. Landlord later sought possession relying on sec. 21 notice served on 12/6/08. Claim was initially struck out on basis that sec. 21 notice invalid as sec. 213, HA2004 had not been complied with. Landlord applied to restore the claim on basis that sec. 213 did not apply as no deposit had been received at the time when sec. 21 notice served. This was accepted by the judge and a possession order was made.
Delicata v Sandberg
Central London County Court 2 June 2009 Ms Sandberg was granted a 12 month AST in July 2007. The deposit was not protected until August 2007. The landlord had served a s.21 notice on the same day the tenancy agreement was signed. In April 2008, Ms Sandberg was sent to prison. She had notified the landlord in advance. While she was in prison and without warning to her, the landlord issued accelerated possession proceedings relying on the s.21 notice from July 2007. A possession order was obtained and then in April 2009 a warrant of possession, both while Ms Sandberg was in prison and without her having been served with papers there. She returned to the flat on her release in May 2009. The landlord applied for a warrant of restitution. At court, the DJ accepted that the possession order should be set aside. The landlord could not rely on a s.21 notice served while the deposit was not protected – s.215(1) Housing Act 2004 – as it was invalid.
Woods v Harrington
Haverfordwest County Court 19 May 2009 12 month AST granted in May 2008. Section 214 claim issued by tenant after tenancy ended via surrender in March 2009. In April 2009 landlord paid deposit into scheme and counter-claimed for damage. Judge refused to accept late compliance and ordered triple payment + return of deposit. Directions were given on landlord’s counter-claim.
Ansbro v Tag & Co
Darlington County Court 13 May 2009 Section 214 claim against an agent dismissed on grounds that sec. 214(4) only effective against a landlord. However, the tenant has sought leave to appeal as sec. 212(9)(a) makes clear that references to landlords includes references to people acting on their behalf.
Da Costa v Pinter
Bromley County Court April 2009Tenant issued the claim after the tenancy had ended. Deposit was protected and prescribed information given prior to the hearing. Judge was not satisfied with late compliance and ordered landlord to pay 3x deposit £6750 + return of deposit £2250.
Beal v McCartney
Plymouth County Court 12 March 2009 Former tenant started 214 claim and claim for breach of quiet enjoyment after having been evicted following repossession claim by landord’s lender. Judge ordered landlord to repay deposit, pay triple compensation amount and awarded £500 damages for breach of quiet enjoyment.
Seghier v Rollings
Bow County Court 6 March 2009 Landlord failed to protect the deposit within 14 days. It had been protected by time of court hearing but prescribed information had not been supplied. Judge ordered landlord to repay deposit + triple payment totaling £2780.
Universal Estates v Tiensia
Croydon County Court 23 February 2009 Landlord failed to protect deposit within 14 days and only protected it with Tenancy Deposit Solutions Ltd (trading as mydeposits) once possession proceedings had been started for rent arrears. Tenant counter-claimed for triple payment on basis that initial requirements of the mydeposits scheme had not been complied with – the scheme rules stated that the full amount of the deposit should be protected within 14 days of receipt from the tenant. Judge agreed that to comply with this particular scheme’s requirements, the deposit should have been protected within 14 days – there was no scope for late compliance. Landlord was ordered to pay tenant 3x deposit (£7200). The Case was appealled and over turned
Piggott v Slaven
Great Grimsby County Court 23 February 2009 Deposit paid for tenancy prior to introduction of tenancy deposit legislation. Tenant moved to another property of the same landlord after the introduction of the legislation. Landlord returned £75 and retained £525 of original deposit describing it as ‘rent in advance’. Landlord served section 21 notice and started possession action. Tenant defended possession claim on basis that deposit had not been protected and counter-claimed for triple payment. Judge found that £420 was not held as ‘rent in advance’ as the tenancy was a weekly periodic tenancy with rent of £105 payable weekly in advance. The £420 was therefore a deposit and should have been protected. Possession claim under sec. 21 dismissed as landlord not entitled to serve section 21 notice and landlord ordered to pay 3x deposit £1260 within 14 days.
Saad v Hogan
Brentford County Court 16 February 2009 Deposit of £1000 paid for fixed-term tenancy prior to introduction of tenancy deposit legislation. In November 2007 a further fixed-term tenancy was granted in the same property. The new tenancy agreement provided for payment of a £1000 deposit but no new deposit was physically handed over – instead the original deposit was retained by landlord.In June 2008 landlord issued section 8 notice based on rent arrears. Tenant defended on basis that landlord had failed to protect deposit and asked that the triple payment compensation due to her be offset against the rent arrears. By the date of the hearing there were 4 months’ rent arrears. Judge did not accept tenant’s defence and made outright possession order under Ground 8. Tenant appealed to circuit judge who accepted her defence. Landlord was ordered to pay £3000 which was offset against rent arrears.
Unknown v Diamond Properties
Leeds County Court 8 January 2009 Deposit was not protected within 14 days of receipt and prescribed information was not given to tenant until proceedings had been issued. Solicitors acting for the letting agent argued that the intention of the legislation was not to penalise landlords/agents who failed to comply within 14 days of receipt of deposit but to penalise those who had failed to protect the deposit by the time the case comes to court. Judge accepted this and triple payment claim was dismissed.
Ferguson v Jones
Birmingham County Court 5 November 2008 Landlord failed to protect deposit within 14 days and only protected it once possession proceedings had started and the tenant had counter-claimed for disrepair. Judge ordered landlord to repay 3x deposit and said that to interpret section 214 in any other way would be contrary to intention of parliament.
Harvey v Bamforth
Landlord’s appeal to a circuit judge - Sheffield County Court 8 August 2008
A landlord who had provided information about a tenancy deposit scheme later than the specified period of 14 days was not liable to pay the penalty of three times the value of the deposit. Information was provided after 14 days but before the section 214 claim.
Badhan v Singleton and Hill
Wolverhampton County Court 2 July 2008 Tenant counterclaimed for 3x deposit during possession proceedings for rent arrears. Court accepted this and matter was settled by a consent order that there were no arrears. Harvey v Bamforth Sheffield County Court 8 August 2008 Landlord’s appeal to a circuit judge – A landlord who had provided information about a tenancy deposit scheme later than the specified period of 14 days was not liable to pay the penalty of three times the value of the deposit. Information was provided after 14 days but before the section 214 claim.
Stankova v Glassonbury
Gloucester County Court 10 March 2008 Tenant issued the claim prior to the end of the tenancy. Although the deposit had been protected by the time of the hearing, the tenant had never been provided with the prescribed information about the scheme. Landlord ordered to pay 3x deposit £1800 + court fee of £75.
Ford v Adjarkoh & Gold Crown Lettings Services Ltd
Bedford County Court 28 February 2008 Tenant entered defence to possession claim by landlord on basis that deposit paid to agent had not been protected. As the section 214 liability arose out of agent’s negligence, agent agreed out of court to make a payment to landlord. This was offset against the tenant’s alleged rent arrears in return for the tenant dropping the section 214 claim.
Drozd & Matusyk v Borsellino Bedford County Court 19 December 2007
Tenant issued claim prior to end of tenancy. Landlord had failed to protect deposit as required and was ordered to repay £350 deposit + 3x deposit £1050 + £220 costs within 14 days.
reference
with thanks to Nearly Legal and Shelter