Tenant's Deposits - Court of Appeal ruling.
The Court of Appeal has decided that no penalty can be imposed on a Landlord who fails to register a tenant's deposit within 14 days of receipt despite this apparent requirement when the law was first introduced.
The Appeal Court recognised that under the Housing Act 2004, section 213, landlords must protect a tenant’s deposit in one of three schemes and give the tenants “prescribed information relating to such protection” – and do so within 14 days. Section 213 also requires courts to impose sanctions on a landlord who has breached these obligations, one sanction being an order requiring the landlord to pay the tenant three times the amount of the deposit.
The Court of Appeal said the issue was the circumstances in which sanctions must be imposed. It looked at three possible time limits for providing the prescribed information – within 14 days, before a tenant lodged a claim, or before the case was heard.
The court ruled that so long as a landlord has protected the deposit with one of the schemes, and given the required information to the tenant, before a court hears the claim, then the tenant is not entitled to the penalty payment.
According to the Government the deposit legislation was always meant to be a way of making sure that tenants had a means of getting landlords to comply. In reality, though, it was giving tenants a way of collecting an unjustified windfall
At Chinneck Shaw, we have always made sure that tenants deposits are lodged with TDS within two weeks of receipt and will continue to maintain this practice.