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July 23

by mydeposits
Once, twice and you’re out…Court order highlights the importance of understanding Tenancy Deposit Protection

A recent case between a tenant and a landlord in County Court has highlighted just how important it is to understand tenancy deposit protection and comply with the regulations in England and Wales.


The case, which involved two separate court hearings over two years, was based around failed attempts by the landlord to reclaim possession using a Section 21 (S21) notice due to the fact that they had failed to comply with deposit protection legislation.

Hearing 1 – dismissal of possession for non-compliance

In the first hearing the landlord’s claim for possession was thrown out because the landlord had not served the tenant with the Prescribed Information before serving them a s21 notice, despite inviting the tenant to sign the Deposit Protection Certificate (DPC) before then serving the S21. 

During this hearing it emerged that the landlord had protected the deposit in June 2013, despite taking it in June 2011 – so well over the 30 days required. The landlord also eventually issued the tenant with the Prescribed Information during the course of the hearing.

Hearing 2 – dismissal of possession for non-compliance, again

In the second hearing the landlord’s second attempt to regain possession was dismissed because the tenant’s defence rested on the fact that – as had emerged in the first hearing – the landlord had protected the deposit out of time, thus invalidating the use of a S21 notice, and had not returned the deposit to the tenant. 

The landlord argued that he did offer to return the deposit to the tenant at Hearing 1, but the judge did not deem it sufficient enough on the grounds that the tenant did not have the opportunity to take legal advice about the offer, and that the landlord had subsequently not attempted to repay the deposit. Or in the judge’s words the offer… ‘wasn’t equivalent to the money having been paid within the meaning of the statute’.

In this hearing the tenant also successfully counterclaimed for a penalty for non-compliance, and was awarded two times the deposit’s value by the judge. 

Lessons learned?

Above all else, that the most important step is to protect the deposit within the correct timeframes – 30 days in this case. The landlord’s concession that the tenant hadn’t paid a deposit and that the agent was to blame was dismissed, which also shows that judges don’t view ignorance as an excuse. 

In fact, the judge’s decision to impose two times the deposit value as a penalty was an interesting aspect. The judge noted that the landlord ‘ought to have known’ about his responsibility as a well-established and professional operator, and as there was no dishonesty involved on his part it didn’t warrant a full sanction of three times the deposit amount. 

Visit our dedicated page for more information on how to comply with tenancy deposit protection law and make sure that you comply.

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