Following a recent ruling in the Court of Appeal (Ayannuga v Swindells (2012), landlords should be aware that when it comes to tenants’ deposits, they must not only put the deposit into a suitable deposit scheme, but they must also give the tenant all of the prescribed information in relation to that scheme. Failure to do this may result in the landlord being ordered to pay the tenant an amount of up to 3 times the value of the deposit.
The information that must be provided to the tenant is set out in Section 2 of the Housing (Tenancy Deposits)(Prescribed Information) Order 2007, and this must be so provided by the landlord within thirty days of the deposit being received by him. The information includes details about the facilities available under the scheme for enabling a dispute relating to the deposit to be resolved without recourse to litigation. This information (as well as other procedural information) was not provided in the above mentioned case. It was not considered enough that the tenant had details of the scheme (there was evidence that the administrator had written to the tenant), and thus the tenant could have readily obtained the information. The landlord was ordered to repay the deposit plus three times the amount of the deposit (pursuant to section 214(4) of the Housing Act 2004).
This Court of Appeal ruling also upheld a previous High Court ruling on this point in Suurpere v Nice and another [2011]. In this case, the Landlord did not place the deposit into an authorised scheme or provide any of the prescribed information. The Landlord then served the tenant with two notices to quit, brought possession proceedings, and transferred the deposit to The Deposit Protection Service (‘DPS’). DPS provided the tenant with information, but the landlord did not personally provide the tenant with the information. The landlord’s possession proceedings were stayed pending the tenant’s claim. The landlord returned the deposit before the hearing and the tenant’s claim was dismissed on the ground that the sanctions in section 214 ceased to apply when the deposit was lodged with the DPS. The tenant appealed however and the appeal was allowed, because although the landlord had until the date of the hearing to return the deposit, he must also have provided the tenant with all of the prescribed information.
Another consequence arising from non-compliance with tenancy deposit requirements, is that tenants now have an additional means of defending possession actions. From 6th April 2012 new requirements were introduced by the Localism Act 2011, and apply to tenancies in effect on or after 6th April 2012. The consequences of the changes in summary are:
A tenant is now also able to bring a claim against a landlord (for non-compliance in relation to the deposit) after the tenancy has ended.
Holmes & Hills Solicitors offers specialist legal advice to landlords, provided by David Dixey, an expert in Landlord & Tenant Law who offers legal advice to landlords across Essex and Suffolk.
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