Landlords Win Deposit Case
22nd August, 2011
Provisions introduced on 6 April 2007 under the Housing Act 2004 made it a requirement that landlords protect their tenants’ deposits using an authorised Tenancy Deposit Scheme, if they have let the property on an assured shorthold tenancy. The rules require the landlord to notify the tenant within 14 days that this has been done. The Act set up a system of penalties for landlords that fail to meet this obligation.
Recently, however, the Court of Appeal has issued a ruling which will please landlords and dismay tenants. It involved a tenant who took legal action against his landlord because the landlord failed to lodge the tenant’s deposit with one of the authorised schemes.
By the time the action had been brought, the landlord had put the position right. The question before the court, therefore, was whether the tenant could bring an action given that the failure which led to the action had been rectified.
The court concluded, by a two to one majority, that the tenant could not. Where a landlord is late in taking steps to protect the deposit and in notifying the tenant within the 14-day time limit that this has been done, but does so before proceedings are brought by the tenant, the tenant has no cause of action against the landlord.
In practice, this means that a landlord who fails to comply with the law in this respect can do so with impunity up until the point at which proceedings are brought by the tenant. However, landlords tempted to use this ruling to avoid compliance should remember that they cannot obtain possession of the premises unless they have complied with their obligations under the Act.
Please contact Simon Ellis for any further information related to this article or any other commercial property issue at [email protected]
You might also be interested in...
22nd November, 2018
Family Law Partner Sandy Edwards believes there is. Next week, from 26 to 30 November, Resolution, an organisation of 6,500 family lawyers and other professionals, will be promoting “Good Divorce Week” which will focus on how separating and divorcing couples can put their children’s needs first and limit the impact of conflict. The week falls during the government’s divorce... Read More »
16th November, 2018
It is reported that a quarter of all complaints dealt with by the Legal Ombudsman revolve around costs. Therefore to avoid complaints and confusion, it is important to be clear from the outset. The new Transparency Rules (which the SRA have now confirmed will come into effect on 6 December 2018) require that accurate and relevant information is... Read More »
5th November, 2018
Aaron & Partners LLP has once again seen improved rankings in The Legal 500 – a comprehensive guide... Read More »