A recent case from 6th November 2012 shows the absolute importance of adhering to the rules of the tenancy deposit scheme.
New rules for tenancy deposit protection schemes….
A recent case from 6th November 2012 shows the absolute importance of adhering to the rules of the tenancy deposit scheme.
The case is the Court of Appeal decision in Ayannuga v Swindells . This landlord involved in the case had protected the deposit but had not complied with the prescribed information.
The tenant had fallen into arrears of rent and the landlord sued for possession. However the tenant defended and counterclaimed, claiming the penalty under the tenancy deposit protection regulations as the landlord had not provided all the prescribed information.
The landlord, in response to this, admitted that he had not complied fully with the regulations but said that this wasn’t really necessary as all the information was available on the Internet and the tenant could easily find it out for himself.
The important thing (he said) was the protection of the deposit protection – which he had done.
The Judge at the first hearing agreed with him, but the Court of Appeal didn’t. They said that the prescribed information was of real importance, as it told tenants how they could seek to recover their money and how they could dispute deductions, without having to go to court.
The landlord was therefore ordered to pay the full penalty of three times the deposit amount to the tenant and pay back the deposit. And no doubt pay costs.
This highlights that when you take a deposit you MUST within 30 days…
- Protect the deposit, and
- Serve any leaflet provided by your tenancy deposit protection scheme, and
- Serve the rest of the prescribed information not covered in the leaflet (in particular tell them the clause in their tenancy agreement that deals with deductions from the deposit)
If you don’t serve the prescribed information your tenant can claim the penalty of three times the deposit sum AND the return of the deposit at any time during the next six years and you will have no defense. Also your tenant will have a defense to any claim you may make for possession based on rent arrears – as they can ask the court to offset their penalty award against the rent arrears.
source www.propertycore.co.uk
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