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March 7, 2017

LANDLORD’S BREACH OF TENANCY DEPOSIT SCHEME

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The tenant can claim an amount equivalent to 1 – 3 times the amount of the deposit in compensation via the county court! 

So you found the perfect private home rental on a shorthold tenancy and lodged a large chunk of your hard earned savings as a rental security deposit with the landlord.

While it is common practice for landlords of assured shorthold tenancies (AST) to require a security deposit on the granting of a new tenancy, many landlords fail to fulfil their legal side of the bargain by securing your deposit with an approved governmental tenancy deposit protection scheme (DPS) within 30-days of receipt and to then provide you with the details of the scheme and information on how you may claim your deposit back at the end of the tenancy.

TENANCY DEPOSIT SCHEMES

Effective from 6 April 2007 and subject to amendments, Sections 212 -215 of the Housing Act 2004 requires all landlords of an assured shorthold tenancy (AST) to:

  1. Protect any tenancy deposit held by the landlord in an authorised tenancy deposit scheme,
  2. Comply with the initial requirements of such a scheme and
  3. Provide the prescribe information of the scheme to the tenant.

THE INITIAL REQUIREMENTS

Section 213(3) requires a landlord to comply with the ‘initial requirements of the authorised scheme within 30 days of having received the deposit. The essential requirement is to protect the deposit in a scheme.

PRESCRIBED INFORMATION

Section 213(5)-(6) requires a landlord to give prescribed information about the deposit protection to the tenant (and any relevant person such as the person who paid the deposit on behalf of the tenant) in a prescribed form within 30 days of having received the deposit.

Although there is no prescribed form, The Housing (Tenancy Deposits) (Prescribed Information) Order SI 2007/797 sets out the following information to include:

  1. Details of the tenancy deposit scheme used
  2. Information on how the tenancy deposit scheme operates
  3. Procedures about the repayment of the deposit including dispute resolution
  4. Information relating to the tenancy and to any provision under which the deposit may be withheld
  5. Certification by the landlord, including having given the tenant an opportunity to sign the prescribed information document.

SANCTIONS

There are two sanctions where the landlord has not complied with these requirements:

  1. Penalty
  2. Prohibition of serving a section 21 notice

PENALTY

The Housing Act 1994 provides the Court with the authority to fine a landlord up to 3 times the deposit amount for his breach of these duties.

Section 214(1) of the Housing Act 2004 sets out that where a landlord fails to comply with either two requirements of protecting the deposit in a scheme and providing the prescribed information, or complies after the 30 days, then the tenant can claim an amount of 1 to 3 times the amount of the deposit in compensation from the county court.

Replacement Tenancies

If the landlord has protected the deposit and complied with all two requirements within the 30 days then there is no need for the landlord to re-comply every time a new tenancy arises with the same tenant, provided the deposit remains protected within the same scheme.

However if the landlord has failed in his two deposit requirements and then there is a replacement tenancy, then unless the landlord complies with the two requirements within the 30 days off the start of the new replacement tenancy, then another penalty will apply. This will continue for every replacement tenancy until the two requirements are met.

PROHIBITION OF SERVICE OF S.21 NOTICE

There are restrictions placed upon a landlord prohibiting him from relying upon a section 21 notice when he has failed to comply with either of the two requirements of the deposit protection scheme.

Section 215(1) of the Housing Act 2004 confirms that a section 21 notice may not be given at any time when:

  • The deposit was not protected in an authorised scheme within 30 days of the start of the tenancy or
  • Information about the deposit protection scheme (under section 213(6)) has not been complied with.

This is subject to section 215(2A) which sets out that a section 21 notice may be relied upon when:

  • The deposit is returned to the tenant (less any agreed deductions), or
  • A claim for the non-protection of the deposit has been dealt with by the county court under section 214(1) (or when the tenant has taken proceedings against the landlord for non-protection and those proceedings have been withdrawn or settled)

DEEMED COMPLIANCE

Section 213(3) and 213(6) are treated as complied with for all replacement tenancies, if during the period of any tenancy (original or replacement) the deposit is protected and the prescribed information is given and that the deposit remains protected with the same scheme.

However special provisions apply to

  • Tenancies granted before 6th April 20112 where there is deemed compliance with section 213(3) and 213(6) if the deposit was protected and prescribed information was given by 6th May 2012
  • Original fixed term tenancies granted before 6th April 2007 where a statutory periodic tenancy arises after that date there is deemed compliance of section 213(3) and 213(6) if the deposit is protected and prescribed information is provided by the 23rd June 2015.

FIND OUT IF YOUR DEPOSIT HAS BEEN SECURED

If you are a tenant of an AST simply call the three authorised agencies below to confirm that your private landlord has secured your tenancy deposit, as he is legally required to do.

  • The Deposit Protection Service – 0330 303 0030
  • My Deposits – 0344 980 0290
  • Tenancy Deposit Scheme – 0300 037 1000

OUR NO OBLIGATION ENQUIRY FORM

If you discover that your landlord has failed to secure your tenancy deposit with any one of these 3 agencies, or failed to do so within the time limit of 30-days of receipt of your deposit then fill in our no obligation enquiry form and we will call you back for a free consultation as to whether we will be able to proceed with a no win no fee claim on your behalf.

[/vc_column_text][dt_button link=”/enquiry-form/” size=”big”]Fill out our enquiry form[/dt_button][/vc_column][/vc_row][vc_row type=”4″ el_class=”authorcss”][vc_column width=”1/2″ css=”.vc_custom_1488885508821{padding-top: 30px !important;}”][vc_single_image image=”961″ img_size=”full” style=”vc_box_border”][/vc_column][vc_column width=”1/2″ css=”.vc_custom_1488885526036{padding-top: 30px !important;}”][vc_column_text]Contact
Ian Duncan, Legal Services Director
duncan_i@depositdispute.com
6 Branksome, Gower Road, Weybridge,
Surrey, KT13 0HD
Tel: 01932 918 808
www.depositdispute.com
Legal Road Limited, 6 Branksome, Gower Road, Weybridge, Surrey, KT13 0HD[/vc_column_text][/vc_column][/vc_row][vc_row type=”4″][vc_column][vc_column_text]This blog or newsletter is not intended to provide a comprehensive statement of the law and does not constitute legal advice and should not be considered as such. It is intended to highlight some legal issues current at the date of its preparation. Specific advice should always be taken in order to take account of individual circumstances and no person reading this article is regarded as a client of this company in respect of any of its contents.[/vc_column_text][/vc_column][/vc_row]