Tenancy deposit dispute finds in landlord’s favour

This week a case was heard in court arising from the legislation for the 2007 tenancy deposit protection scheme. The charge against the landlord was a failure to notify the tenant about the details of the chosen deposit scheme within the statutory fourteen days.

Sheffield County Court heard that the landlord in question had properly placed his tenant’s deposit in a tenancy deposit scheme but had failed to inform the tenant about the details. The statutory penalty is three times the deposit for failure to register or protect the deposit. The County Court judge ruled that in this case the failure to provide information on time did not mean that the penalty was payable because the information was still provided before the tenant submitted his application.

According to the Citizen’s advise bureau there are thousands of similar cases waiting to be heard, so this judgement is very significant.  The judgment clarified that provided the landlord supplies the certificate and other prescribed information without delays outside the 14-day statutory limit, he will not breach the Act.

The tenancy deposit scheme, applied in April 2007, applies to thousands of landlords taking around £1.2bn worth who of tenants’ deposits every year.

Stephen Ludlow of ludlowthompson, LONDON'S LETTING AGENT comments: 'Landlords should not be lulled into a false sense of security over the recent ruling. Many landlords don't realise that those who fail to comply will not be able to regain possession of their properties by the serving of a Section 21 Notice, or be able to enforce the terms of the tenancy agreement. A reliable letting agent will offer landlords access to tenancy deposit schemes so it's easy for landlords to comply.

According to the law, failure to protect deposits properly means that a landlord will have to return the deposit to the tenant and could also be ordered to pay up to three times the amount of deposit if he has not paid up at the date of any court order.'