As previously reported the Deregulation Bill became the Deregulation Act 2015 on 26 March 2015 and has now been published.
Sections 30 – 32 contain the provisions which amend the legislation in relation to tenancy deposits.
Contents
Prescribed information given by agents
Section 30 amends The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 to clarify the position that where there is a reference to landlord within the order, such a reference is to the landlord or the landlord’s agent.
The result of the changes is that either the landlord or agent details can be inserted into the prescribed information as the provider of the information wishes.
The simplest way for agents is to match the tenancy agreement when inserting details into the prescribed information so everything is uniform.
The changes are treated as if they were in effect from 6 April 2007 except if a section 214 claim for the penalty or a section 21 notice possession claim has been fully determined before 26 March 2015.
Where-
- a claim for a penalty or a section 21 possession claim was started before 26 March 2015 and
- that claim is ongoing on or after that date and
- the court decides not to allow a penalty, grants possession or allows an appeal by the landlord as a result of these changes.
The tenant will not be ordered to pay costs that are attributable to that part of the claim.
Restrictions on claim for penalty for deposits received before 6 April 2007
Section 31 amends section 214(1) Housing Act 2004 which governs a claim for between 1 and 3 times deposit after a failure to protect or issue prescribed information. The change made means that a claim for the penalty from 26 March 2015 can only be made in relation to a deposit which has not been protected where the deposit was received on or after 6 April 2007. The revised section 214(1) reads –
(1) Where a tenancy deposit has been paid in connection with a shorthold tenancy on or after 6 April 2007, the tenant or any relevant person (as defined by section 213(10)) may make an application to a county court on the grounds–
(a) that section 213(3) or (6) has not been complied with in relation to the deposit, or
(b) that he has been notified by the landlord that a particular authorised scheme applies to the deposit but has been unable to obtain confirmation from the scheme administrator that the deposit is being held in accordance with the scheme.
Please have in mind that if a deposit has been received before 6 April 2007 but the tenancy went statutory periodic on or after 6 April 2007 or there was a written renewal after that date, that is deemed as the receipt of a new deposit after 6 April 2007 and would be caught by this provision (but see later).
Service of a section 21 notice
Section 215 Housing Act 2004 has been amended by section 31. This section governs when a section 21 notice is prohibited from being served where there are deposit problems. The whole of section 215(1) is replaced and now provides (as far as relevant)-
(1) …, if (whether before, on or after 6 April 2007) a tenancy deposit has been paid in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy at a time when the deposit is not being held in accordance with an authorised scheme.
(1A) …, if a tenancy deposit has been paid in connection with a shorthold tenancy on or after 6 April 2007, no section 21 notice may be given in relation to the tenancy at a time when section 213(3) has not been complied with in relation to the deposit.
The provisions allowing a deposit to be repaid in full or agreed deductions allowing service of a section 21 notice remain.
This change to section 215 emphasises that there are two occasions when a section 21 notice cannot be served.
- Firstly, a section 21 notice cannot be served ‘at a time’ when the deposit ‘is not being held in accordance with a scheme’. This is irrespective of when the deposit was received. Therefore, the landlord or agent must be compliant with scheme rules at the moment the section 21 notice is being served. This would include the payment of any renewal fees for example (if applicable).
- The second part to the new section 215 is that where the deposit was received on or after 6 April 2007, not only must the deposit be held in accordance with scheme rules as above but also, it must have been protected (complied with the initial requirements) within 30 days.
The end result of this new provision is that if a deposit was received before 6 April 2007 and the tenancy went statutory periodic also before 6 April 2007, in order to serve a section 21 notice, the deposit must be first protected or repaid in full. The earlier amendments relating to the penalty make it clear in this situation no penalty will be payable despite any late protection.
If however, the deposit was received on or after 6 April 2007 and the deposit was not protected within 30 days (since Localism Act changes from 6 April 2012) then just as before the changes, no section 21 notice may be served unless the deposit is repaid in full or agreed deductions.
Superstrike deposits
Section 32 inserts a new section 215A into the Housing Act 2004 to deal with deposits which were received before 6 April 2007 AND the tenancy went statutory periodic on or after 6 April 2007. As a result of the Superstrike case it was held that the duty to protect these deposits was triggered by the new statutory periodic tenancy which arose.
The Deregulation Act 2015 enshrines Superstrike into law but gives a period of amnesty for landlords and agents who may have been caught out by the case.
Where all or some of the deposit is still being held (unprotected) by the landlord or agent AND the statutory periodic tenancy is still in force on 26 March 2015, the landlord or agent must protect the deposit and issue prescribed information before the end of 90 days from 26 March 2015. If that is done, no penalty will be payable and any section 21 notice served will be valid. The date for compliance may be less than 90 days if there are ongoing court proceedings and an order is made for protection sooner.
If the statutory periodic tenancy has ended before 26 March 2015 or, the whole deposit is no longer being held before that date, it is deemed that the landlord did comply with deposit protection within appropriate time-scales and as a result no further claims for the penalty can be made in respect of this type of deposit.
The provision is treated as if it were in effect from 6 April 2007 except if a section 214 claim for the penalty or a section 21 notice possession claim has been fully determined before 26 March 2015.
Where-
- a claim for a penalty or a section 21 possession claim was started before 26 March 2015 and
- that claim is ongoing on or after that date and
- the court decides not to allow a penalty, grants possession or allows an appeal by the landlord as a result of these changes.
The tenant will not be ordered to pay costs that are attributable to that part of the claim.
Periodic tenancies and renewals – re-issue of prescribed information
A new section 215B Housing Act 2004 is inserted which deals with renewal tenancies.
Where a deposit has been received on or after 6 April 2007 (including a deposit received before that date but is deemed received after that date due to a periodic or renewal tenancy) and all of the following also applies-
- the deposit has been protected [1]
- prescribed information in relation to the deposit has been given [1]
- a new tenancy comes into being or replaces the original tenancy (whether directly or indirectly)
- the new replacement tenancy is between the same landlord(s), same tenant(s) and substantially the same property
- the deposit continues to be held in accordance with the same scheme as it was last protected with
Then, any requirements to re-protect the deposit or re-serve prescribed information in relation to the new replacement tenancy are treated as if they had been complied with by the landlord or agent.
The end result is that no further action is required after the initial protection and prescribed information is not required to be given again. This not only includes in relation to a statutory periodic tenancy but also to a written renewal (where it’s between the same landlord, tenant and property).
It is important to note that there must have been some protection originally and the correct prescribed information given for this to apply. If there was a failure to give correct prescribed information originally, there will also be a failure for each renewal or statutory periodic tenancy.
There is no change to the current rules that prescribed information can be given late to allow service of a section 21 notice (but the penalty of between 1 and 3 times deposit plus return of the deposit will be payable upon application by the tenant).
Just as prior to these changes, where a deposit has not been protected within 30 days, there is little point in protecting because the penalty would nonetheless be payable and no section 21 could be served. The best advice where a deposit has not been protected in time is to simply repay the deposit in full or agree deductions. The quicker this is done, might assist with ensuring as low a penalty as possible.
The changes are treated as if they were in effect from 6 April 2007 except if a section 214 claim for the penalty or a section 21 notice possession claim has been fully determined before 26 March 2015.
Where-
- a claim for a penalty or a section 21 possession claim was started before 26 March 2015 and
- that claim is ongoing on or after that date and
- the court decides not to allow a penalty, grants possession or allows an appeal by the landlord as a result of these changes.
The tenant will not be ordered to pay costs that are attributable to that part of the claim.
- Irrespective of when the deposit was received or prescribed information given although this provision does not allow late protection in any way. ↩
“Then, any requirements to re-protect the deposit or re-serve prescribed information in relation to the new replacement tenancy are treated as if they had been complied with by the landlord or agent.”
Note that any requirements to re-protect the deposit must still be complied with because of the 4th bullet, which states that the deposit must continue to be held in accordance with the deposit scheme.
Yes, any scheme rules must still be followed so for example some insurance schemes may require a new fee on renewal and as such that fee must be paid. It would then be down to individual rules which would dictate any other action needed upon renewal.
For example, the DPS custodial scheme is the easiest to comply with because once it’s protected correctly and prescribed information given when first received, no further action would be needed as a result of these changes.
You say “It is important to note that there must have been some protection originally and the correct prescribed information given for this to apply. If there was a failure to give correct prescribed information originally, there will also be a failure for each renewal or statutory periodic tenancy.”
This seems to me a very important point which has been completely overlooked since the Act was passed. Just to clarify, does this mean that if a post 2007 deposit was protected but no PI issued, and the tenancy later renewed and/or became SP, there would be 2/3 breaches? And therefore that the new amnesty would not ‘cover’ breach #2 or #3?
Hello
That is correct. Another reason to use our type of tenancy which doesn’t go statutory periodic so at least there would be only one breach. Although, our agreements have the prescribed information built in.
Many thanks
Guild of Residential Landlords
Where a post 2007 deposit was taken and there is no record of the prescribed information being given, is there any way to remedy the situation?
You can serve prescribed information late and then serve a section 21 notice but nothing will prevent a penalty if one is applied for by the tenant.
Can i ask, instead of repaying the deposit (2011 AST and if it wasn’t protected etc…) to the tenant cant it be deposited in a TDS? and then issue S21? or is the only remedy to REPAY the deposit?
It would need to be repaid in full or agreed deductions.
Can your landlord charge you a administration fee for the paperwork for the deposit scheme .when you already paid this when you signed your contract
In relation to 215B the footnote above states that “this provision does not allow late protection in any way”. However 215B (1)(b) states that “the initial requirements of an authorised scheme have been complied with by the landlord in relation to the deposit (ignoring any requirement to take particular steps within any specified period)”. Doesn’t this mean that the section allows for deposits to be protected late and then non-compliance (and the penalty) not apply once the tenancy goes periodic? Or have I misread?
Section 215B is only dealing with the re-issuing of prescribed information and reprotecting a deposit when there is a renewal or the tenancy goes statutory periodic.
What that footnote means is that even if a deposit is protected late or prescribed information late, as long as it was done, all renewals or periodic are deemed to have also been done throughout the tenancy.
However, it changes nothing in respect of penalties. If 30 days has been missed, no section 21 may be served unless repaid / agreed deductions and the penalty of 1 – 3 times deposit will be payble without defence.
Section 215B reads:
Thanks!
Hi I let a property through an agent on a six months AST in December 2012. The tenant stayed there for 3 1/2 years. She has just moved out. The tenancy was not renewed at six months and just sort of rolled over.I have just found out from the agent they did not protect the deposit. Am I liable for each six month period i did not protect the deposit? I am very worried about this.
No, only the initial failure. In our view the agent would be liable for the penalty anyway (although others disagree and say the landlord is always liable). See the commentary in Draycott v Hannells about an agent not protecting the deposit.
The answer to your query is incorrect
“No, only the initial failure. In our view the agent would be liable for the penalty anyway (although others disagree and say the landlord is always liable). See the commentary in Draycott v Hannells about an agent not protecting the deposit.”
The correct answer is that you had an AST for 6 months and a SP (both post localism). The tennant could claim 2 X deposit as it was paid again upon the SP and up to X 6 in compensation. Two tenancies. On the first only is incorrect. The deregulation only helps for landlords who complied at some point and you never have, no matter whose error it was. I do hope a lawyer didn’t answer that.
Correct – previous reply edited (see below).
I am just looking at the following scenario and must confess to being very confused:
Fixed term written ast tenancy entered into for six months. Deposit protected late with DPS. Prescribed info served late. However, both protection and service of prescribed information completed with within the six months fixed term. A new written tenancy agreement is then entered into following expiry of the six months with the same tenants, same landlord and same property.
Isn’t the effect of s215B that the deposit is effectively deemed, upon the replacement tenancy coming into being, to be repaid to the landlord and so re-received and then deemed re-protected within the scheme (with prescribed info also deemed re-served) within 30 days?
Does this not also mean that, whilst the s215 right to compensation still remains, a section 21 notice can now validly be served without returning the deposit to the tenant?
Could I please ask your thoughts on this scenario, particularly with regards to the new legislation above;
A tenant takes up an AST for 12 months and their deposit is protected on time and tenant is provided with deposit protection information. At the end of the 12 month tenancy (moves into periodic) the deposit auto-UNprotects and is not held in a protection scheme for the remainder of the tenancy which is a 6 week period.
Can the tenant make a claim for compensation as deposit was unprotected in last 6 weeks of tenancy?
Yes as a SP is a new tenancy and the localism rules apply. If on time no penalty for first, but a penalty on the second and no use of a section 21. Every renewal is new!
Can I just clarify the changes using an example:
(a) A deposit for a 12 month fixed term tenancy was partly paid by a tenant, but predominantly paid by a “relevant person” in October 2013.
(b) The Prescribed Information was issued within the statutory time limit however it did not make reference to the “relevant person”.
(c) The Prescribed Information was only served upon the tenant and not the “Relevant Person”.
(d) The landlord served a Section 21 Notice towards the end of the Fixed Term Tenancy.
(e) The tenant disputed the validity of the Section 21 Notice on the grounds the Prescribed Information was incorrect, since it did not make reference to the “Relevant Person”, nor was the Prescribed Information ever served upon the “Relevant Person”.
(f) The landlord retracted the Section 21 Notice, amended the Prescribed Information to show the “Relevant Person”, served the amended Prescribed Information to the tenant AND Relevant Person, prior to issuing a new Section 21 Notice.
I had thought the landlord or landlords agent would be liable to a penalty of 1 to 3 times since the Prescribed Information did not make reference to the “relevant Person” nor was it served upon the “Relevant Person”. Is this still the case or is a penalty now only due where the deposit was not protected at all?
Kind regards,
Mr S.
Yes penalty. Them changing it doesn’t stop that it was incorrect in the 30 day time span. The PI also needed giving to the relevant person on time. The word “accordance”. They didn’t protect in 30 days in accordance. It’s important to know the deposit scheme rules. The landlord could argue administration mistake that mydeposits let you change, but that doesn’t hold! It girs against the law.
HI – if a deposit was protected late (8 mths into a 12 mth AST) and certificate therefore never given aspart of the PI; and then a 6 mth AST addendum with increased rent was agreed as a ‘renewal’ at the end of the original 12 mth term. What are the rules?
Because the protection and PI rules were not followed in the original AST – what impact does the renewal AST have?
You protected late so compensation is available. I’m confused why you did not give the certificate along with the other PI required to the tenant late though? If you had of given it in first tenancy late, then you would be covered for the next tenancy but with first breach penalty only. However, it seems you did not do this.
To cover the next one you would have had to comply with the requirements within 30 days from the start of that, with correct PI as you would have received a new certificate as a renew. The information on it must match the second AST. If you didn’t renew and give correct PI then you have two breaches.
However, some state the deregulation only covers original deposit. With the wording used I don’t agree with that, I believe you can rectify at each tenancy, but correctly within 30 days and in accordance with localism.
Deregulation
“received by a landlord in connection with a shorthold tenancy (“the original tenancy”)”
To me every SP or new AST is connected to the original tenancy
and every tenancy deems deposit has been received again. So I do believe you get a chance to rectify within 30 days on each new SP or FT. The rules apply to each one again until you comply. That’s my understanding.
Geoffs question is answered incorrectly. “No, only the initial failure. In our view the agent would be liable for the penalty anyway (although others disagree and say the landlord is always liable). See the commentary in Draycott v Hannells about an agent not protecting the deposit.”
This is two breaches, not just initial. This is dated after the localism act. 2 deposits and up to 6 times in compensation. Each tenancy SP or AST deposit is received again. Hope that was not answered by a lawyer.
I really worry about these so called lawyers. They have no idea what they are doing. Geoff yours are after localism, and you will owe 2 tenancies and up to 6 times in compensation. You never complied and have had two tenancies (SP or AST). You would not have to pay every 6 month, only two breaches. The deregulation doesn’t help you at all.
Sean every breach means compensation after April 2012. If you complied on the second though, only compensation on first one. If you didn’t comply within 30 days of the second, then two breaches. Deposit X 2 and up to X 6 in compensation.
[Edited] – It is correct that to rely upon Deregulation Act, the deposit must have been protected first and therefore if goes statutory periodic, two penalties could be payable if sought by the tenant.
Sorry my message wouldn’t go through. Only meant to state correction once. However, I’ve had another thought recently. A tad off topic, but with every tenancy deemed the deposit to have been paid again, as this is the reason the deregulation came about, post superstrike. Then say you are tenant for four tenancies and paid initial £2,000 deposit. Does this mean at the end of four years you are owed £8,000? Even if deposit protected! They need to look into that.
Hoping for some advice here. I am a landlord and use and agent. I and late wife have had a tenant in since 2009 on an AST. All TA’s say deposit held in DPS. Each year TA were renewed. It has come to light agent never protected deposit until this year and even then after 30 days, gave PI but wrong certificate.TA’s were always in her name, except last one. Will the tenant be able to claim for ALL off the years the agent breached please? I am very concerned as 6 years of unprotection is going to be costly. Will it be the agent or me who is liable?
Susie
You are always liable, because of 212(9)(a)
Have a look at this post which explains why
landlordsguild.com/how-to-ensure-the-lowest-penalty-after-deposit-protected-late/
however, there is mitigation as this post explains
landlordsguild.com/how-to-ensure-the-lowest-penalty-after-deposit-protected-late/
Be aware that each of these tenancies are not SPT’s just AST renewals and “substantially the same” so you would NOT be liable for 6 failures, just the one.
You clearly relied on the professional in this matter and by showing these Judgements should get away with a 1x penalty should the tenant take action. Print these out if you are not being represented by a Lawyer (although I recommend that you ARE)
bailii.org/ew/cases/EWHC/QB/2010/217.html
bailii.org/ew/cases/EWHC/QB/2014/4729.html
These comments are personal and not legal advice and you should consult a Solicitor.
I protected my tenant’s deposit after he moved out (a week later). The scheme allowed me to protect the deposit from the date of the start of the tenancy to the end-date. I sent the prescribed information and certificate to the tenant afterwards. The tenant stayed at the property for 3 and 1/2 years. After the first year AST ended (duration 1 yr), tenant asked for two 6-months’ ASTs as he was not sure how long he would stay – which I agreed to. The tenancy was renewed for one year in the 3rd year after which it reverted to a Statutory Periodic Tenancy. Does the fact that I protected the deposit (admittedly late) but for the whole time the tenant was there have any impact on penalties that may be imposed on me please? Would that be considered as 5 breaches under the Deregulation Act?
Hi Sheila
I am afraid that the Dereg Act will not help you, what it does is stop Landlords who protected the original being punished just because new paperwork is issued. In other words if you were good to begin with.
The law is not going to create a get out clause that undermines legislation designed to punish a failure to protect.
I count your breaches as 4 if the “renewed” tenancy was exactly that, i.e. extending an existing tenancy rather than signing a new one.
Landlords are always better off moving to an SPT or extending the original tenancy.
That does not mean that there is not room for negotiation, if a claim firm is involved they will not be interested in this and they will prevent the tenant from dealing with you.
The Court however will take a dim view of them not settling if a reasonable offer was made that would have saved the need for Court action.
So start off by offering 50% of 1x deposit x 4 tenancies. Plus a positive reference. They will come back and your final point should be 4x the deposit but no positive reference.
Be warned that some claim companies are all about the fees, they also use different way to bring case before the Court to try and get those fees. I have successfully had cases thrown off that track and those fees dismissed but it will always depend on the individual case.
If the tenant left with arrears or damaged the property it gives you more to negotiate with.
These comments are personal and not legal advice and you should consult a Solicitor.
We would probably start a little lower with the initial offer. They may not be aware of the rule about renewals.
Also, a contractual periodic tenancy is better for continuing periodic after the fixed term (like the Guild tenancies do) instead of a statutory periodic arising at the end of the term. A continuing contractual periodic would not be classed as a renewal if there were a slip up with the initial protection. Also, there are council tax advantages. Finally, if the how to rent guide changes between when given at move in date and when goes periodic, a new guide must be given for a statutory periodic tenancy but not if the tenancy continues as contractual periodic.
Please clarify:
12 month AST ends on 31 March, deposit protection in order. From April to August tenancy continues as monthly SP but deposit protection not renewed so 5 months unprotected.
Is this 5 breaches or one?
As guildy says no penalty as long as you were in order on the initial AST, that means you needed to not only protect the deposit but provide the PI, both within 30 days.
You also have these additional requirements, you needed to provide
Energy Performance Certificate
Gas Safety Certificate (annually)
How to Rent Booklet
You cannot issue an S21 if these have not been done, just issue them if you have not already.
In addition to that, for the SPT you need to give them another copy of the How to Rent booklet if it has been updated since the one you gave them with the original tenancy.
If the How to Rent booklet you gave with original tenancy was up to date when it was served you are probably OK because the latest version was 1 February 2016 but if you had an old one on your PC you may need to re-serve.
Note your PI may have been incorporated into the How to Rent document depending on how you chose to do it.
There is no deposit sanction for these additional requirements unless you count the cost of your S21 being thrown out and having to do it all again properly!
A wily tenant who wants to delay things will not tell you there is a problem till the expiry of the S21, by then you might as well start over with new S21 with latest how to rent, no point wasting Court time.
No penalties!
As per the above article, as long as the deposit was correctly protected at the beginning, it is deemed as though it’s also correctly protected during a statutory periodic or renewal tenancy with no action being necessary.
I realise this is an old article but I have learned of a landlord who is being sued for up to six times the deposit because it was not protected at the start of the fixed term and remained unprotected at the beginning of the statutory periodic period.
Several housing and legal experts have been consulted and each seems to have a different opinion.
Some are saying the landlord’s liability is limited to x 3 deposit because of the Deregulation Act, including a respected housing solicitor and a barrister.
Others, including yourself, are saying that each renewal tenancy or SPT generates a new liability because it is technically a new tenancy if Section 215b of the Housing Act 2004 has not been complied with (that is, deposit wasn’t originally protected). Therefore, s.215b only affords protection from the double jeopardy situation created by Superstrike v Rodrigues for deposits protected at the beginning of the first fixed term.
It appears that the wording of the Deregulation Act, including amendments to the Housing Act 2004 could be clearer and is causing much confusion. The devil is clearly in the detail and it would seem to hang on what it doesn’t say, not what it does. We were having a very hard time trying to pin down exactly where it states that a landlord can be sued for more than three times deposit.
I know there are many “ambulance chasing” legal firms around who are promising to get tenants awards of up to nine times deposit, including the firm instructed in this particular landlord’s case. While some of the claims would appear exaggerated, these solicitors would not guarantee no win no fee if they were not likely to win.
We believe that the advice given in this article is correct. What you have to remember is that the deemed re-protection and giving of prescribed information again when it goes statutory periodic only applies if the deposit was protected (and prescribed information given) correctly and within 30 days when the deposit was initially received. If it wasn’t protected properly at the beginning, the changes by Deregulation Act do not apply and as such both failures are liable to a penalty. Our agreement – via the Tenancy Builder – helps in that a statutory periodic tenancy does not arise and as such there is only one failure (and therefore only one penalty) (although we assume our subscribers are protecting properly and so no penalty whatsoever)!
It’s unlikely in our view that an order would be made for six times the deposit though. It’s more likely 1.5 – 2 times x 2 (3 – 4 times in total) is a more realistic amount but it’s difficult to predict.
Many thanks for your prompt & helpful response, Guildy. May I just ask if there have been many cases where x a whole number plus a half has been awarded, as opposed to simply a whole number? For example, x 1.5 as opposed to x 1 x 2 or x 3?
We’ve heard of it a few times although no published cases and just County Court.
@Holborn1977
Guildy is spot on, basically the Dereg act will not reward a Landlord for failing to comply with the law, but it will not punish someone who DID comply at the OUTSET.
I have had substantial experience of this area of law and of the claims companies.
IMO their game is to scare you into a max payout or else rack up legal costs.
If a Landlord forgot to protect or serve PI and they are novice or relied on professional services such as an Agent, then the Court will consider mitigation, but must apply at least 1x sanction. This and other sites explain this in more detail and the case law that supports it.
I have no problem with Landlords being sanctioned for this as it seems to be the only way they will get the message, but I do find the claims company behaviour abhorrent. Luckily, I have found a way to beat them.
In your friends position I would make a Part 36 offer of 1x the deposit so that the Court could see that they were trying to be reasonable.
I suggest your friend speaks to a Solicitor specialising in housing law or join this site if you need further advice.
These comments are personal and not legal advice and you should consult a Solicitor for such advice.
Many thanks, David. This is really helpful.
In experience there is no set amount, the law says between 1x and 3x so people think in these multiples but in negotiation I always start at around £300 when dealing with a tenant and 1x when dealing with a claim company.
A Court has to offer 1x as a minimum but OKADIGBO CHAN firmly established that it is entirely at Judge’s discretion on how much to award.
Factors might include :
How long after being made aware of obligation did they protect the deposit
The conduct of the Landlord (e.g. disrepair or harassment).
Conduct of tenant, (e.g. if part of a S8 eviction for non payment of rent)
Whether Landlord was novice.
Whether Landlord suffered a bereavement in the 30 day window.
Whether an Agent can be shown to have taken on obligation (in which case they can be sued after or pursued for settlement prior to Court to avoid legal costs and sanction).
Whether reasonable offers were made and declined.
Many a tenant will happily sign a settlement agreement for £300 that they were not expecting.
Many a Judge has been a Landlord or shares the same class values of a Landlord.
When they see a reasonable offer has been made they might feel that this is a bit of a waste of their time, even though the law says they have to award between 1x and 3x per tenancy that has not been protected or PI served.
If the Claimant does not accept a reasonable offer it may affect costs and at the very least it puts a number in the Judges mind.
I would urge any tenant to seek a settlement directly with their Landlord and any Landlord to get in front of this before a claim company becomes involved for the reasons stated above.
I would also urge any Landlord reading this to write to their MP to have them speak to David Gauke, Secretary of State for Justice to bring these and all claims company claims under the claims company regulator. This would at least put a stop to the underhand behaviour that I have seen on a plethora of cases.
I would remind you that every case is unique and anything can happen. So get professional paid advice from this site or from someone specialising in this area of law such as a housing solicitor.
These comments are personal and not legal advice and you should consult a Solicitor for such advice.
Hi
Some very interesting reading and useful.
I’m in a situation whereby a tenant had been in situ since January 2006 – deposit of one month rent was taken but not secured. After two initial 12 month contracts the tenant requested a 3 month contract which rolled over continually until 2018. Deposit was returned in full early 2018 and Section 21 served in April 2018. Tenant left the property beginning of September 2018. Few days a letter in the post said ex-tenant was now suing for near on £40k
Long story short, they agreed to reduce this to only 6 years due to limitation act.
Based on a breach each time the contract renewed (every 3 months) it worked out to be 21 breaches.
21 breaches X £595 (original deposit taken in 2006) X 3 = £37,485
After some back and forth they have agreed to settle at 2x (£24,990)
It means I now have to sell the property to settle. Is this normal and how would this be viewed in the courts?
Any advice appreciated
Thank you
You really need to seek professional advice before agreeing to anything. We don’t think it would necessarily be that excessive. You could consider subscribing to us, some other association or speak with a solicitor.