Update: this page has been updated October 2015 reflecting new case law about returning tenancy deposits by cheque and serving notice. See later.
I thought today we would try and resolve a little problem as to the procedure of serving a section 21 where a deposit has not been protected after the changes have now taken effect from section 184 Localism Act 2011.
The issue is that many of the free websites and those wonderful things known as unmoderated forums will often say that as long as the deposit has been protected (albeit late) then, a section 21 notice can be served. Of course, landlords are choosing to listen to that advice because they prefer that advice and then getting to court, into all sorts of trouble and ending up with the tenants costs to pay when they lose the possession case. It seems the free sites in particular are simply too busy to chase advertisers to pay for their site, leaving no time to actually research the law on which they are writing about.
The main problem is that when a tenant is in rent arrears (the usual reason for requiring possession), the last thing the landlord wants to do is return the deposit to the tenant. Instead, they would rather (reluctantly) protect the deposit, albeit late.
This article is all about explaining in much greater detail the procedure relating to serving a section 21 notice if a deposit has not been protected.
Contents
Introduction
We have already written about the changes introduced by the Localism Act 2011 and in particular in relation to serving a section 21 where the deposit has not been protected. This article is not talking much about compensation payments and such, we are just going to talk about the legal requirements in relation to serving a section 21 notice and the correlation between protecting tenancy deposits.
Tenancy Deposits Pre 6 April 2012
Before the changes were introduced, section 213 Housing Act 2004 said the following (as far as material):
Section 213
(3)Where a landlord receives a tenancy deposit in connection with a shorthold tenancy, the initial requirements of an authorised scheme must be complied with by the landlord in relation to the deposit within the period of 14 days beginning with the date on which it is received.
(4)For the purposes of this section “the initial requirements” of an authorised scheme are such requirements imposed by the scheme as fall to be complied with by a landlord on receiving such a tenancy deposit.
Therefore, to summarise in plain English, 213(4) provides that initial requirements means to protect a deposit following the rules of each scheme and 213(3) requires a landlord (or agent) to protect a deposit by following those rules within 14 days.
The penalty of not being allowed to serve a section 21 notice pre April 2012 is dealt with by section 215(1) Housing Act 2004 which used to read:
Section 215
(1)If 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—
(a)the deposit is not being held in accordance with an authorised scheme, or
(b)the initial requirements of such a scheme (see section 213(4)) have not been complied with in relation to the deposit.
Again, to summarise in plain English, this section is saying that if a deposit has been received, then a section 21 notice may not be served if (a) the deposit is not with a scheme or (b) if the rules of the scheme have not been complied with when it was protected (for which see section 213(4)).
If you look back above, you will note section 213(3) is the only section which refers to the 14-day requirement. Yet, the prohibition of serving a section 21 notice makes no reference back to 213(3) whatsoever. It only refers back to 213(4) which is simply defining “initial requirements” (basically the rules of the scheme).
It has been held pre April 2012 that any scheme rules that require a deposit to be protected within a certain timeframe (e.g. within 14 days) are simply repeating the law but do not form part of the initial requirements.
In my judgment, the requirement that there be payment into the Scheme is the initial requirement of the Scheme, and not the requirement that that be done within 14 days. The time limit of 14 days is a requirement of s.213(3). That requirement is repeated in the scheme, but so are a number of other provisions of the 2004 Act. The fact that the time limit is repeated in the terms of the Scheme does not make it an initial requirement of the Scheme. – paras 28 & 29 [Draycott v Hannells Lettings Ltd 2010 EWHC 217 QB] confirmed in Tiensia v Vision Enterprises Ltd (t/a Universal Estates) and between Honeysuckle Properties v Fletcher 2010 EWCA Civ 1224
… Tugendhat J in Draycott (at … paragraph [29]), was also of the view that a scheme time limit is not one of ‘the initial requirements’ within the meaning of the definition in section 213(4). I respectfully agree with him … [Lord Justice Rimer at para 35]
Therefore, pre April 2012, as long as the deposit was protected prior to the service of a section 21 (even the day before), even if the deposit was protected after 14 days, then, the section 21 notice was all the same validly served.
Tenancy Deposits On or After 6 April 2012
However, the section prohibiting service of a section 21 notice has been totally changed since the provisions contained in the Localism Act 2011 took effect on 6 April 2012. In particular, section 215 has been radically altered, but first let’s look at 213(3) and 213(4) again and see how they are now written (as of 6 April 2012). I have highlighted the change.
Section 213
(3)Where a landlord receives a tenancy deposit in connection with a shorthold tenancy, the initial requirements of an authorised scheme must be complied with by the landlord in relation to the deposit within the period of 30 days beginning with the date on which it is received.
(4)For the purposes of this section “the initial requirements” of an authorised scheme are such requirements imposed by the scheme as fall to be complied with by a landlord on receiving such a tenancy deposit.
You will notice there is only one change, and that is the number 14 has been changed to 30. Otherwise, it’s as it was before.
So, now onto the big change which is in section 215 and now reads (as far as material for this article, highlights added):
Section 215
(1)Subject to subsection (2A), If 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—
(a)the deposit is not being held in accordance with an authorised scheme, or
(b)section 213(3) has not been complied with in relation to the deposit.
There is more to come in a moment, but just to stop there for a moment, notice the massive change here already. In the Pre April 2012 version, the prohibition on serving a section 21 notice referred back to the scheme rules and did not refer back to the 14 days requirement. This has now been completely changed, and a landlord is specifically prohibited from serving a section 21 notice now if section 213(3) has not been complied with. Section 213(3) requires the deposit to be protected within 30 days. Therefore, as a result of this, once 30 days has passed, that’s it. A section 21 notice cannot be served if we just read (b) and stopped. However, notice also the addition of “subject to subsection (2A)” so we now need to look at that subsection and see what that says.
Section 215
(2A)Subsections (1) and (2) do not apply in a case where—
(a)the deposit has been returned to the tenant in full or with such deductions as are agreed between the landlord and tenant, or
(b)an application to a county court has been made under section 214(1) and has been determined by the court, withdrawn or settled by agreement between the parties.
Again to translate into plain English, this is now saying that the prohibition on serving a section 21 notice does not apply if a landlord has done any of the following: (i) returned the deposit, (ii) made such deductions as agreed between landlord and tenant from the deposit or, (iii) the tenant has made an application for up to 3 x deposit from the landlord as a penalty for failing to protect (or issue prescribed information) and that case has been determined, withdrawn or settled.
So, a landlord (or agent) may not serve a section 21 notice at any time when the deposit is not being held with a scheme [section 215(1)(a)] (which has the effect that if it takes 10 days to protect, no notice may be served before 10 days) or, if the deposit was not protected within 30 days [section 215(1)(b)]. Once 30 days has passed and the deposit was not protected (even if it is subsequently protected) the landlord may only serve a section 21 notice if any of the following is done:
(i) Return the deposit [section 215(2A)(a)] or,
(ii) Agreed deductions from the deposit with the tenant [section 215(2A)(a)] or,
(iii) If the tenant has already made an application for the penalty of up to 3 x deposit for the failure to protect the deposit or give prescribed information within 30 days (even if it was subsequently protected) and that application has been determined by the court, withdrawn or settled [section 215(2A)(b)].
If the deposit was not protected within 30 days and none of the above has been done with the deposit then, section 215(1)(b) continues to apply which prohibits the service of a section 21 notice until (i), (ii) or (iii) above are done.
Returning the deposit
A cheque may be possible to return the deposit in full, but recent cases would indicate the only safe way is to wait until it’s been cashed before serving a section 21 notice.
Please see this article for up-to-date cases and information about returning a deposit.
Alternatively,
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There is a follow on point relating to the s.215(2A) exceptions that is worth considering.
Is it possible for tenant to refuse to accept return of the deposit which is tendered in full by the landlord and so hold up the section 21 notice procedure until there has been a determination by teh court of the tenant’s application for under s.215(2A)(b)?
Suppose, for instance, that the landlord has sent a cheque to the tenant for the full deposit and the tenant has refused to pay the cheque into his bank account. In those circumstances, has the landlord “returned” the deposit in full to the tenant under s.215(2A)(a) and so can then rely on a s.21 notice served thereafter?
My view would be that the purpose of s.215(2A) is to provide a landlord with a route to bring the tenancy to an end under s.21 by complying with the main purpose of the tenancy deposit scheme (to ensure that the tenant’s deposit is properly returned) so compliance with s.215(2A) should not depend on what the tenant chooses to do with the cheque once received provided there is no reason to think the cheque will not be honoured. That said, there is not a great deal in the words of s.215(2A) or any authority to elucidate the point.
What does anyone else think?
I am a landlord what should I do with a tenant whose;
Tenancy start date was 01.02.2012
deposit protected 01.06.2014
s21 served on 01.08.2014
Tenant is challenging s21 as invalid
is s21 valid. A simple answer will be much appreciated.
Hi just saw a different post and I think you might need more info;
Tenancy start date= 01.02.2012
Fixed term end date=31.07.2012
What date in month rent payable (assuming calendar monthly) = 1st day of the month
Date deposit received= 25.01.2012
Date deposit protected= 01.06.2014
Which scheme=my deposits
Date section 21 notice served=01.07.2014
Date section 21 set to expire = 05.09.2014 or after
questions
is the s21 valid? if not what can I do to remedy it?
can the tenant sue for three times her deposit?
Hello
Your section 21 will be invalid. You need to return the deposit in full or agree deductions. Then, you can re-serve a new section 21. Your tenant can make a claim for between 1 and 3 times deposit.
If you become a member of the Guild, we can help with all aspects of this including obtaining a court order once the section 21 has expired.
Many thanks
Guild of Residential Landlords
Forgive me for asking but are you saying that my landlord has to give me my deposit back before he can serve section 21 notice
Tenancy started and deposit taken in 2008
Deposit protected no info from landlord only letter from company saying its protected in 2012
Section 21 noticed severed 29 April 2016 giving 2 months notice
Am I right that landlord has to give me deposit back then serve section 21 notice again
Hello
You are absolutely right about this and we have had a case recently where I thought the tenant was not going to cash the cheque but unfortunately they did indeed cash it. I was hoping for a court battle on that one (One of my Harrogate members, so a nice one to deal with close to home!)
I had obviously planned for the scenario and I share your view that as long as a landlord can show the cheque was served on the tenant (a little like showing a notice was served), then, that will be sufficient for the purpose of “returning the deposit in full” to the tenant. I would allow at least 7 days after service just to give plenty of time.
The reason I think this will work is because of the law of cheques as confirmed in Coltrane v Day [2003] EWCA Civ 342 whereby payment by cheque is deemed to be on the day the cheque was received and NOT the day it cleared (assuming it clears on first presentation).
In Coltrane, the tenant defeated a section 8 claim by giving a cheque to the landlord on the day of the hearing and it was deemed paid on the day of the hearing even though it had neither been banked or cleared (but it was held the court should have simply adjourned for 7 days to see if did indeed clear).
Following the same principles, in my view, the sending of a cheque should be sufficient to show the deposit has been returned in full, thus allowing a section 21 to be served.
There is just one fly in the ointment namely that a landlord can insist on cash for rent unless s/he has impliedly accepted other forms of payment such as a cheque by past actions and it may be the same for a tenant that they could insist on cash. This of course would be fine though because a landlord could then ensure they get a receipt for the cash it’s just that normally the tenant wouldn’t cooperate in this type of situation so a cheque is a good way of proving delivery of the payment.
Many thanks
Adrian
Hi Adrian
firstly, thank you for your post!! I am in the exact situation you are describing. To cut a long story short, my solicitor returned the deposit as a cheque on my behalf to the tenant before issuing a S21 notice. The tenant has acknowledged receipt of the cheque but flatly refuses to accept it, so has yet to bank it. I have the court hearing in 3 weeks time…..your case law references are exactly what I was looking for, and I hope will, if needed, convince the judge that by giving the tenant a cheque we have given back the deposit.
If you are able to provide any further info or signpost where I can find more on the case laws you have referred to that would be good.
Thanks again for your help!
Hello
I will ponder and if I think of anything, I will let you know.
If you need any assistance, please come back to us.
Many thanks
Adrian
Hi SG
I would appreciate if you could tell me of the outcome of your hearing. Did the court order the tenant to move out? I am in a similar situation. How did the solicitor serve the deposit back? Cheque and registered post?
Do you think a tenants might refuse to sign for the letter? What to do in such a case? Hand the cheque in person?
I have asked the tenants for bank details as I am abroad and they refused to give them to me saying they will take the deposit when they leave… But this is the problem, I don’t know how long this will be…. so I need to serve a S.21 but to do so first need to return deposit.
Thank you for help.
In my case, my landlord has failed to protect the deposit within the 30 days. He has put the house on the market. He delivered a cheque to me and on the following day served a section 21. That cheque did not clear payment. Payment was stopped by the bank as a theft had been reported. In the courts eyes has he returned the deposit or not?
Adrian
Thank you for your comments. I agree with the points you raise.
It is also useful to compare the language used in ground 8 of Schedule 2 of the Housing Act 2008 (“ rent is unpaid”) with s.215(2A)(a) of the amended Housing Act 2004 (“the deposit has been returned”). The s.215(2A)(a) provision could have been worded “the deposit has been repaid” but instead the legislators used the word “returned”.
As you say, the Coltrane v Day judgment relies on the earlier cheque cases as authority for the proposition that “The giving of a cheque for a debt is payment conditional on the cheque being met, that is, subject to a condition subsequent, and if the cheque is met it is an actual payment ab initio and not a conditional one.” If this applies in Coltrane v Day where the issue was whether the rent had been “paid/unpaid” when a cheque was sent by the tenant but not cleared prior to the possession hearing then one would have thought that the case for it applying in the s.215(2A)(a) scenario would be even stronger as the deposit only has to be “returned” not repaid. The cheque being a payment conditional on the cheque being met provides the tenant with the means/power to turn the cheque into the payment of the deposit monies into the tenant’s bank account.
As to the issue regarding the right of the landlord to require payment in cash unless the tenancy says otherwise, the Coltrane v Day case suggests that this cannot be relied upon as an argument unless there has been a swift rejection by the recipient of proposed mode of payment. In Coltrane v Day, the landlord had been accepting rent payment by cheque previously and did not reject the cheque once it had been received by the tenant. Indeed the landlord subsequently cleared the tenant’s cheque in his bank account following the possession hearing.
While I can envisage a number of unusual scenarios where the tendering of a cheque might not amount to a return of the deposit – for instance, where the cheque was swiftly returned by the tenant and, say, the tenant did not have a bank account or where there had been an agreed formal procedure for repayment of deposit monies that did not involve payment by cheque (like, say, payment in cash or bank transfer) – I would have thought that if the tenant has not sent the deposit cheque straight back to the landlord and explained the basis on which the cheque provided cannot reasonably be used to repay the deposit to the tenant, then the landlord should not be put in any worst position than the tenant in the Coltrane v Day case.
JAC
As a layperson I can see a hole in your reasoning here.
Rent due is not “repaid”, it is “paid”. As it was never “paid” in the first place in order to be “repaid”.
You can’t “return” a cash deposit by giving someone a cheque just as you can’t return a red bicycle by returning a green tricycle. Also a cheque is not legal tender but certain forms of cash are.
If you enter the property with a witness and put the CASH on say a table inside the house you can surely argue to have repaid and returned the deposit.
A tenant doesn’t have to accept a cheque and isn’t required to return an unwanted cheque. If a tenant accepts or has accepted cheques from the landlord perhaps his position may be weaker when it came to returning a landlord returning a deposit by cheque.
In the example of a Ten averting a possession order i think a Judge is giving the ten the benefit of the doubt he might very well do the same in a S21 case when the Ten has not had their deposit back because they don’t want to make someone homeless unless they absolutely have to.
Hello
I would entirely agree with your additional comments.
Many thanks
Adrian
What happens if someone is in the middle of repossession proceeding? The partially paid deposit has been protected but late by 51 days ?
As the proceeding has started the tenant will unlikely to agree on full return of deposit, or agree to deduct the rent arrears or even apply for the penalty as each of the three steps will validate the S21 notice hence recovery of the property.
Would it be enough to offer the full deposit return or reduction from the rent arrears or willing to take penalty 1-3 times of deposit in order to validate the s21 notice and the accerated repossession order?
Hello
There are quite a number of permutations here because it depends on whether the deposit was received / protected before or after the localism act changes. I’ve just been going through in my head and there are a number of possibilities.
Dependent on dates,how far in with the proceedings you are isn’t really relevant in deciding whether the section 21 notice is valid or not (or can be made valid).
I think therefore the best to do is start a new question because this will be of great interest to members and then please provide the information below. With that information, I will be able to answer this question quite easily:
Tenancy start date
Fixed term end date
What date in month rent payable (assuming calendar monthly)
Date deposit received
Date deposit protected
Which scheme
Date section 21 notice served
Date section 21 set to expire
(I’m asking about section 21 dates as might as well check whether that’s valid whilst on answering question).
Many thanks
Adrian
hi Adrian, i have a question and its bothering me as i have many contradicted informations, my landlord served me a section 21 (two months) 10th of april, but the deposit was not protected, i
m living at this address for 3 years, so recently my landlord insured the deposit, and my question is: is he obligate to serve me another section 21? or because my current notice didn
t expired yet its still valid?really hoping that you can answer my queastion
with regards
milena
Milena
Not only is his section 21 invalid and can be rejected, BUT he has to serve you with the “prescribed information” , this is not just a matter of telling you he protected it, this is what is required
1- the name and contact details of the scheme administrator used
2- the procedure for the repayment of the deposit at the end of the tenancy *
3- details of the scheme’s facilities for resolving disputes relating to the return of the deposit *
4- the name and contact details of the landlord
5- the amount of the deposit paid and the address of the tenancy
6- information on the deposit regulations provided by the scheme administrator to the landlord
7- a copy of the deposit protection certificate provided by the scheme administrator to the landlord, which has been signed by the landlord.
note that these need to be easy to read and understand, not the terms and conditions in tiny print of 6 because the whole idea of the need of this information is that tenants are provided with simple easy to understand information regarding their deposit and how to access it.
So if he issues a new Section 21 but has not provided the prescribed information then the new section 21 can be rejected too.
If he goes to Court you will be sent a document and you can reject it quoting the appropriate laws in this page.
Hi there, can anyone help me, i paid my deposit on 6th june, had issues with my landlord, repairs not ebing carried out, to the point where i had to involve the local council, they then served a s21 on 5th October but did not protect my deposit till 8th october…..i have not started court proceedings but have refused to move out before christmas as we have been unabe to find a suitable property, i have given the letting agent too much info in my opinion and was why they protected my deposit some 3 months after i had first asked them for confirmation, can i still claim for 3x the amount back? Aso do i have to pay rent while awaiting on court proceedings?
I’ve just slightly modified this article with the addition of a suggestion to use a bankers draft when returning the deposit for the purpose of serving a section 21 notice. See under the new heading “returning the deposit” about 3/4 down the article.
Many thanks
Guild of Residential Landlords
SCENARIO ;- during a periodic tenancy, a section 21 is srerved but is not valid because the deposit has not been protected and the prescribed information not provided.
At some point during the notice period the LL registers the deposit does the section 21 become valid or must a new one be issued.
I worry about the sentiments here, I really do. Tenants have so few ‘rights’ that to object to protecting their deposit @ nominal costs, within 30 days promptly seems so offensive to so many. Tenants can at least be reassured that many landlords encouraged the setting up of a TDS, because all over the country, landlords and agents were robbing them blind ( see Foxton’s £250ph cleaning costs in 2004.
If you want to take money from a tenant on what is already a very one sided agreement settled between agents and bankers well before the Housing Act 1988, is it really too much to ask for co-operation on protecting their deposit promptly.
Alternatively, we could go back to the bad old days where landlords held NO effective deposit at all for damages…tenants simply didn’t pay their last month’s rent.
I wonder if someone could advise me please?
I am a landlord, used the agency to rent my house and let them deal with everything as I was not aware of the rules, for which I paid. The agency took the deposit as well as one month rent in advance, payment for the insurance which they persuaded me to buy in case the tenant stopped paying rent and many other payments. In a month before I could get first month’s rent the agency closed down, it turned out they have been involved in some criminal activity. I struggled for month to get any rent out of my tenant who turned out to be on benefits. The insurance had not been bought and hence the deposit was not put on the deposit scheme. That was four years ago. Recently I gave a noticed to my tenant as I decide to move back into my house. She refused to live stating that the housing office told her not to move out without court order (the tenant is on benefits, which I did not know at the beginning of tenancy). I had no choice to serve section 21 (unaware of the law relating to that), but at the hearing the Judge said that I could not serve section 21 when there was no deposit. The thing is that in the application for the section 21 there was a question ‘if I had a deposit’ and I honestly answered that I did not. The Judge said that I had to put a deposit in a deposit scheme and serve section 21 all over again. However all three deposit schemes refused to take my deposit as the house was rented four years ago. Today I after numerous calls to the deposit schemes one of them agreed to accept my deposit if there was no dispute. However I am not sure if that gives me right to serve section 21 as it will be late deposit anyway. I read all interpretations of law but there is no interpretation for my particular case. How could I put the deposit on the deposit scheme four years ago if I never had it and the agency that claimed to put the deposit there was closed down within in a month of the signing the tenancy agreement? Could you please help me to figure out what to do as I desperately need to get position of my property. My tenant is already in thousands of pounds in areas, which I have not even claimed when I served section 21, hoping that the process will be faster. But this is not a point now I just need my property back.
Thank you very much for all you advice. Tamara
This has been sorted as has joined the Guild and we have assisted.
Many thanks
Guild of Residential Landlords
I’m so glad to hear your Guild picking this one up for Tamara. Who on earth advised her to seek a Section 21 in her position ? And why – with a veritable clutch of mandatory grounds on hand, which would have also have given her a decent stab at re-claiming her property and all that back rent too!
This Let’s Let A Property game has attractive to so many new ‘services’, all desperate to make a buck off someone else’s costly risks. Like the Guild, I too would have helped her out too, had she come to my Online Tenancy Solutions website.
So, Instead I’d like to wholeheartedly congratulate the Guild of Residential Landlords for reaching out with the right options for her. It’s just so appalling a case- but the follow up advice also compounded her her possession nightmare. Section 21’s won’t ever work this out. She needs advice to show her all the other mandatory Grounds that’ve been breached already – ones that would offer her compensation or back payment of benefits she didn’t receive.
I’m a lone landlord, with a 15 year advisory advisory history, who has chosen row her own boat by rejecting offers of advertising or sponsorship in my published survival guides or my new website…but having seen the speed of the Guild’s reaction to her plight – this The Guild of Residential Landlords will definitely get one of my rare url link, free only to services of integrity.
Please let us know how you sorted it Tamara – a lot of us will be rooting for you on this one and want to know how she gets on.
The simplest way to resolve this issue is for the court to say that where a landlord for wahtever reason fails to secure the deposit under a scheme, but later does this the court has discretion to award up to three times the original deposit as a sanction or failure to comply. But, in my view that failure alone should not act as a permanent bar to possession under section 21 otherwise the new provisions would not have created exceptions such as enlisted ie with deposit being returned or repaid by cash or cheque. I cannot see any real difference between a depoist being returned or repaid and one being secured through the deposit scheme where a landlord has some costs to deduct.
This is all very complicated for a novice landlord. Her tenant is rather more than 8 weeks in arrears – she should head for a Mandatory Ground 8 for rent arrears. Ring the local County Court for the forms ( they won’t give legal advice – but they’ll tell you how many copies of the application you need( and help if you’re stuck or don’t understand something.
The Mandatory Ground 8 way, she can also go to the Civil Court – and sue for all her owed rent. The tenant won’t be able to pay, but at least gets a CCJ against his record to warn other landlords. Plus, once she has her possession order ( which the Judge will have NO option but to grant – it’s not attached to the tenancy Deposit system – it’s just a Must Grant (Mandatory) reason for getting possession – then she can get onto the Housing benefit Office which has NOT paid her – but who has paid the tenant. Twice, a Local Authority refunded me any back rent a tenant had stolen.
Go for the simple certain way – Mandatory Ground 8 (look it up on the government’s rental website – or ask me a question via my site if you’re still confused. Though I think this is precisely the advice the Landlords Guild will have already given you.
Sorry – in the above reply, the top bracket keeps inserting itself – I think the keyboard needs a clean.
Regards
Lesley Henderson
Hi, I would love to know what local authority paid you back your tenants rent arrears?
Hello
I'm not entirely sure that a section 8 would succeed in every case. It all depends on timing in my view because if the tenant claims the penalty on or before the day of the hearing, the penalty can be offset from the rent and the test of being 2 months or more in arrears “*on the day of the hearing*” may not be met. It all depends what the court decides and whether they determine possession first and postpone the claim for compensation to another day or postpone both together.
If the deposit is returned or offset and section 21 followed, even if the penalty is ordered at some point, the section 21 would remain unaffected.
Many thanks
Guild of Residential Landlords
Yes, your point is valid. However, this is a landlord with a tail of rent arrears stretching back ( according to her plea for help) for over 4 years! It’s very hard to see how the ‘penalty issue would ever outweigh the basis of a Mandatory Ground for rent arrears in excess of 8 weeks when rent arrears exceeds 200 weeks.
The other advantage being that the costs are within her control – the forms readily accessible and free to obtain, and advice is on tap for filling them in, therefore no advisor costs she can’t look up. All in all, I fail to see that a Section 21 will ever come to fruition in this case. The TDS was always – from day one of its operation- linked to a timely deposit of tenant funds. It hasn’t changed. It was one of the fundamentals placed in, back when I was part of the endless government consultative process to design a system which would force people to stop treating a tenant’s deposit as a bit of extra bunce. This case is an exception to many rules – but not those governing the TDS nor Mandatory Grounds – which are compulsory for judge to grant possession on, once proved.
Best wishes with this puzzle. And landlords wondered why I’ve always advocated personal rent collections. We don’t get arrears tails of 4 days – let alone 4 years.
Hi, I’m in a situation with my landlord.
I rent my house privately not through an estate agent. I moved into the property on 6th April 2012 and gave my landlord deposit before we moved in. He never protected my deposit.
My tenancy contract ended on 6th April 2013. But the landlord said we can continue living there with out a contract so we were on periodic contract as the house was for sale.
So we had to viewings which was fine we done all they booked in but because he wanted to come into the house with out us present but we wouldn’t let him (because we didnt want strangers coming in the house and we had a dog).
First he threatened to put our rent up if we didn’t accept viewings with out us present. I said threatening us is going to work and explained that it is not legal for him or anyone else to come into the house with out our permission. He then threatened to kick us out. So I looked up my rights and found out my landlord never protected my deposit.
He then come to the house the other day to say he thinks it best if we find somewhere else as he needs to sell the house. And said he gives us 1 month’s notice.
I know he needs to give us with a section 21 notice. But because he hasn’t protected our deposit the section 21 notice I valid unless his gives us our deposit back.
He said this isn’t true and ain’t going to do this. What shall I do?
Hello
I don’t think we are the right people to help you. You need a solicitor or perhaps speak with Citizens Advice Bureau.
Many thanks
Guild of Residential Landlords
Need major help I live in a house’s in private accommodation through estate agents with my wife and 3kids. I’ve just been serverd a section 21 being in shock I call my Landlord as we was on speaking terms and he said it’s because he needs to sell the house. Then 3 days later I get a section 8 letter saying I have now 14days to move and the reason given was due to later payment of rent even though we was never more den 4week’s late an the fact housing pay in arrears don’t help. Been here for 5 yrs never had a problem suddenly this happens. We also found out we have a assured shorthold agreement which also doesn’t offer much support. What I want to know is when served a section 21 before the section 8 do I still to the first section I received? Any help is great thanks.
Thank you for your article, I found it very depressing. In October last year I began possession proceedings against my tenant. I had 2 months rent in advance which was evidenced in writing and signed by all parties. The court dismissed the claim in February 2013 because he held 1 month rent I had was a deposit. Unaware of the law I registered the deposit, waited a week and served the s21, and issued another claim for possession later. I had a hearing on Monday and in his defence he says he didn’t receive the s21 notice and if he did it was invalid because of s215. I know he received the notice i hand delivered it to him. But the judge only said we do a witness statement in regard to the service and not the deposit although in the notice of hearing he did want evidence of how the deposit was protected. I thought it was a simple case and know I am very annoyed. What do i do in such a case. The tenancy began in April 2010 and i received the deposit then. The law is messed up, surely protecting the deposit later should be as good as.
should i ask the DPS to repay the tenant ad then serve a new s21 before the hearing? please help
Hello
I’m sorry for your troubles and you are right, the legislation is very complex.
From what you are asking, it wouldn’t be fair on our members to comment further unless you joined the Guild as a member yourself for which see here: https://www.landlordsguild.com/quick-links/services/join-renew-subscription/
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Guild of Residential Landlords
Hi I am really stressed, not sleeping much and can’t read anymore information regarding section 21s and deposits. My tenant and her 4 children (1 under 18 and 3 adults that don’t/won’t work) moved into my old house on the 1st Nov 2010, they were on benefits but had an employed guarantor who earned a good wage and worked for the NHS. I foolishly took their months deposit but didn’t know I had to secure it. In 2011 the council changed their housing benefit and they topped up the difference between what the council gave them and the rent owed for approx. a year. However in Jan 2013 they informed me they could no longer pay on top of the council benefit which is £600 short a month. After reading about a possession order I registered the deposit with the TDS and issued a section 21(a) notice to the tenant and the guarantor looking for an eviction and a judgement on the arrears. The tenant was apologetic and said they had been to the council but had been advised to stay put until the court awarded a possession order. We finally got out court date in Sept when they arrived with the ‘free legal aid’ solicitor and a counter claim of £22k. The mum has never worked in the 20 years she has been in this country, claims depression and therefore secured legal aid. The counter claim included x3 deposit, there was a leak with the bad weather a few months ago so they claimed damages to their items (we repaired the leak within 2 hours of getting a call from the tenant claims against their peaceful right to enjoy the property as well as us not maintaining the property despite the fact they have never told us there was a problem, the house is up to a very good standard. We have never received an email, text or message asking us to repair anything! The judge threw out my claim & therefore their counter claim out as I was a day out on the S21 notice. I reissued a section 21(a) notice on the 1st Oct which ended on the 1st Dec. I am filling out the complicated N5B form, but keep reading that my S21(a) notice isn’t valid due to the deposit not being secured within 30 days. They owe almost £8k in rent and have damaged the property quite badly (smashed glass panels etc). I just want to sell the property as I can’t afford to keep it on after what has gone on this year but I’m at a loss of what to do. If they can secure more ‘free legal aid’ they will and i’m worried I am just wasting more money sending in the N5B form – please help? do I need to give them their deposit back and reissue the section 21? seems so wrong to pay them the deposit back when it won’t even cover half the cost of repair that I am facing when they finally do leave!
Thanks for your comment on our website about your case.
I know it’s harsh but we really would need you to be a member before we could help. We have to stay strict on this otherwise our membership looses it’s value. See here for pricing: https://www.landlordsguild.com/#pricing-table
Many thanks
Guild of Residential Landlords
Question regarding the N5b possession claim form. I did not protect deposit but returned deposit in full to tenant and have receipt with her bank account and sort code, the question regarding the deposit which needs to be completed do I just put yes deposit was received but then write on the form that deposit has been returned to tenant in full and attach evidence? Otherwise this prevents me from serving S21. I have tried to get possession through S8 but tenant is making counterclaim and a date has been set for trial in October 2014, I need possession before this and want to know if I can claim possession via S21 – I already served the notice in Jan 2014 but was relying on the S8 but court dates and counterclaims delaying the process.
Hello
Are you a member of the Guild please? I can’t find your email on our system. I try and ensure I only reply to Guild members to keep it fair on those that are paid members but if anyone else wants to reply that’s fine.
Many thanks
Guild of Residential Landlords
Hi I have signed up now.
Question regarding the N5b possession claim form. I did not protect deposit but returned deposit in full to tenant and have receipt with her bank account and sort code, the question regarding the deposit which needs to be completed do I just put yes deposit was received but then write on the form that deposit has been returned to tenant in full and attach evidence? Otherwise this prevents me from serving S21. I have tried to get possession through S8 but tenant is making counterclaim and a date has been set for trial in October 2014, I need possession before this and want to know if I can claim possession via S21 – I already served the notice in Jan 2014 but was relying on the S8 but court dates and counterclaims delaying the process. P.S – I have signed up now for membership.
Hello
Thanks for joining!
The honest answer is we don’t know for sure what to put in the form! What is crazy is that the brand new forms have just been issued and they still don’t contain any space for this situation!
What we have been doing though with a 100% success rate so far is as you suggest. Tick yes and then write on the form “deposit returned in full [date]” or similar. Our current court form guidance shows an example of this and the words we have used to date.
In respect of your section 8 case, you say they are making a counterclaim. Is that just for the failure to protect the deposit or is it repairs and other things like that? If it’s just the deposit, I may be able to assist (no guarantee as it just depends) in particular it might be worth appealing the length of time. If however it’s repairs and other things it might not be so easy (although that date is still exceptionally long in my view and perhaps worthy of further consideration).
If you don’t want to reply to that question here, just send us an email or telephone us.
Many thanks
Guild of Residential Landlords
Thanks for the reply. The tenant is trying to make a counterclaim for unlawful eviction and harrassment. The tenant was never harrassed and would have no record of such as I have never called her as I used to deal with her boyfriend who has apparently left the property and therefore she is unable to pay rent. She returned keys to me but then came back to the property and claimed she had not moved out while I had a new tenant moving in. A woman from the council came to the house and threatened to call the police so I told her to and when they came it took them a long time to decide what should be done. As the tenant had a child the police said I had to let her back into the property which I dutifully complied. I would like to gain possession quicker via S21 route but as I have a date set for a trial for her counterclaim (the judge already confirmed the rent arrears of £5,600 but said the magistrate had said that the 2 claims have to be heard together – I was shocked when I got the letter from the court setting a trial date for Oct 2014 so wanted to find out if can do S21 route to get possession quicker?
Hi, am looking for the exact words to eventually use on the possession order N5B . Shorthold tenancy started 19/04/07 now periodic . Protected deposit in August 2007 well over 14 day deadline as did not know of the existence of such schemes.Have returned deposit by cheque in full to tenant and have receipt.In section 7 of N5 how do I answer the questions please
7 (a)Do I put yes to deposit received.
In the next “If Yes ” section (1) to (4) Do I ignore this completely and just write “deposit returned ” with evidence ?
Do I not attach any of the TDS paperwork because clearly this will show non compliance with the initial requirements
However my tenant did have a copy of the TDS information showing deposit not protected until August but apparently he has mislaid it. Is it wise to give him another copy ? I am not trying to be unethical here but my tenant is elderly,has a daily carer and does now need sheltered accommodation. I have protected every other tenants deposit on time .
Can I ask a question – Tenancy commenced 1st February 2013 – deposit was not placed into the scheme until November 2013 – (after the original 6 month tenancy ended) tenant is now periodic, when can I serve a Section 21?
Hello
I don’t think you can serve a section 21 without taking other action first but we would need to take a look in more detail.
If your a member of the Guild, please contact us otherwise to keep it fair on those that are paid members, you would need to join the Guild first and then we could help.
Many thanks
Guild of Residential Landlords
thank you guildy I will so register and then someone can let me know what I need to do thank you very much
I did protect my tenants deposit but not within the required number of days. However I have since obtained a possession order under section 8 in which the judge ruled that the full deposit should be paid to the landlord in order to reduce the £11k rent arrears. Since the ruling the tenant has requested a further hearing to try and get the possession order set aside as they are trying to overturn a ruling on suspension of housing benefit.
Can I now serve a section 21 on the basis that the tenancy deposit is no longer applicable?
Hello
To keep it fair on those that are paid members, we try and only give help to those. We don’t mind little bits but this is a little more complex and we would need to just go through all the dates and exact details of the order before giving a firm answer. However, although it might be slightly complex, the wording of the legislation is quite straightforward around this point so once we know all the information, an answer should be fairly easy to figure out.
See our pricing table here.
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Guild of Residential Landlords
Ian
I suiggest you join the Guild, although I can’t imagine why you would try to issue a S21 when you have a S8 Possession, you would be wasting your money because they would simply ask for it to be attached to the existing claim and heard by the same Judge. They may even consider it is to be vexatious when you already have a claim for possession in progress.
Regardless of you returning the deposit the tenant has up to 6 years to counterclaim because you did not protect the deposit within the appropriate time. In addition to this you will have to had protected the deposit FOR EACH TENANCY (at least until the end of 2014 when the law will change) and issue the prescribed information for each deposit protection.
Hi can any one help I have served a section 21 notice on my tenant the deposit was secured in a with 14 days of them moving in the 6 month tenancy was up and went to a rolling month by month but the deposit protection lapsed for more then 30 days but had been reprotected befor the section 21 was served so is the section 21 legal as the deposit was secured within 30 days of the initial tenancy being taken out? Thank.
Hello
This should be fine because it was protected within time initially. However, was prescribed information given either at the time or on the second protection?
Arguably, due to Superstrike, you may have needed to have given prescribed information again within 30 days of the tenancy going periodic but this is something the Government is on with fixing.
It also depends on how the tenancy went periodic. I’m not sure if you are a member of the Guild but if you are or join, we can look in much greater detail at the specifics of your individual case.
As I say though, from the basics of what you describe you should be okay.
Many thanks
Guild of Residential Landlords
Hi there,
My tenant’s housing benefits have been stopped and can no longer pay the rent. She hasn’t paid a deposit. Can I still serve a Section 21 Notice to get her evicted?
Sorry if this is posted in the wrong section
I can’t see any reason why not from what you describe.
Many thanks
Guild of Residential Landlords
Darren, before jumping in with an S21, talk to the local authority, they can’t quote personal stuff but you can ask whether they think it is a temporary thing, some will hint. If she goes beyond 6 weeks you can have the HB paid direct if it is reinstated. Also before you issue an S21 make sure you are totally legal yourself, deposit protected in authorised scheme, prescribed info sent within 30 days. Otherwise you will be paying her costs and a sanction of up to 3 times the rent.
If her situation improves you can tackle the arrears, even if she can only afford £10 a week it is a start.
Don’t know if anyone will reply to this.
Our tenant is now claiming that she didn’t give us any deposit, what do you do about a section 21 if there is no deposit? She paid the deposit with a partner who then left her but they bot wrote to us to say we should keep the deposit as her deposit and so we did in the scheme but now when we offer to use it as rent arrears she says it is not her deposit!
Hello
If there is no deposit, there are no section 21 issues as a section 21 can not be served where a deposit has been received and then not protected.
However, it sounds to me there clearly is a deposit so it will need to have been protected within 30 days of being received (depending on when it was received) in order to serve the section 21. Otherwise, this article will need following. If the deposit has been properly protected then presumably you can just use it for the rent arrears as that is only beneficial to the tenant? I can’t imagine the tenant suing you for reducing their arrears. Arguably the other tenant could come back wanting their deposit back in which case if you returned it, your tenants arrears would simply increase which you could pursue.
Many thanks
Guild of Residential Landlords
From what I read of what you say, you definately protected the deposit because you said ” so we did in the scheme” as long as it was done within 30 days and you issues the Prescribed Information (telling her using the prescribed method where the deposit was protected and how she can access it under terms of sheme) witin 30 days then you are fine.
The deposit is held for the performance of a contract (the tenancy agreement), so you are entitled to hold onto it. The DPS and other schemes will allow you to claim it on that basis.
if you issued an S21 properly, with 2 months clear notice and ending on a rent due day using the correct wording saying “on or after” x date then it will be valid.
Also be aware that the deregulation bill is changing rules, follow this site for updates on that but it makes things much easier for Landlords. I would caution your tenant that you HAVE complied with the law under Housing Act and that she faces potential legal costs of thousands if you have to have your solicitor enforce the s21. By the time she gets to Court the Dereg act will probably be law and if not you could appeal and by then almost certainly.
If she has kids and is seeking Social Housing be aware that the Council will tell her to go all the way to Court and even to Bailiffs thus costing the tenant thousands she does not have and which you will probably pay for.
Hi
I am a land lord I received my deposit a significant time after the tenants have it to the estate agents. The tenants gave the deposit in some 2 weeks before the agent gave it to me and I had some technical errors putting it in the deposit scheme. Does the 30 day relevant period start from the date the tenant handed over the money or from the date the agents have the money to me the landlord?
Also the deposit was given in December 2011 so would it be governed by the old rule pre 2012 or the new rule post 2012?
I look forward to hearing from you.
Hello
We would need some precise dates on this but you might be okay from what you describe with it being under the old rules although this depends what date it was actually received and then protected.
To keep things fair, you would have to be a member of the Guild if your not already and then you can ask your question here (or by telephone).
Many thanks
Guild of Residential Landlords
Hi, I have tenants in a AST contract which expires 8th November. I did not take a deposit at the start of the tenancy as they are friends of friends. I want to serve Section 21 at the start of next month to give the official 2 months notice, will the fact I don’t hold a deposit effect the S21?
Any advice much appreciated?
Regards,
No, that will have no affect on the service of the notice. We have possession notice guidance available here.
Tenancy Start Date – 01/08/2011
Tenancy Renewed Again – 01/08/12
Tenancy Expiry Date – 30/07/13
Deposit Protected – 01/05/2015
Prescribed Information Given – 01/11/15
Section 21 Issued – 01/08/15
Section 21 Expired – 01/10/15
I have not returned the deposit
Possession Order sent to tenant 15/12/15 & tenant has 14 days to respond
I am now worried if my S21 valid also – What would be the outcome from court bothers me – Please reply by a simple answer i will win this case or lose! Please help!
I’m afraid you should have returned the deposit in full before serving the section 21 notice so your notice is invalid. If you wish to become a member of the Guild we will be able to help you get it right if you start the process again.
Thanks for your quick reply – What do you think would be the the courts outcome? Will I have to pay the penalty 3 times and serve S21 again before returning the deposit? Please advice!!
I know I should have got in touch with you earlier!
To keep it fair on people who are paid members on this site, you would need to become a member for us to assist.
I would like to see some discussion on various ruses used by landlords to try avoid this issue. Here are three I can think of:-
For example, it is not uncommon for a landlord to ask for zero deposit but demand a (non-returnable) contract fee of, say £100. I assume this is to avoid deposit-protection time-line problems involving issuing a valid S21.
I have also recently see a rather dubious-sounding arrangement whereby the tenant agrees to pay the first month in advance plus a further month’s rent in advance but deemed to be specifically for the “final” month of the tenancy. Wouldn’t this in reality be simply an advance payment of one month’s rent and therefore offsetable against any arrears that might otherwise arise during the tenancy (otherwise wouldn’t it be tantamount to a ‘deposit’ that only covered potential arrears instead of including potential damage as well?)? Would a Court simply ignore any such clause in a contract allocating payments to a later month?
Also quite common is for one tenant in a shared house to be nominated as the “head tenant” and to receive rent payments from the other tenants then pass on the total to the “real” (non-resident) landlord or to the agency. This appears to make the head tenant a live-in landlord and downgrade the other tenants to being simply lodgers. My question here is whether the “head tenant” who collects the rent is deemed to be a resident landlord even if (by private agreement with the ultimate LL) they are not actually financially accountable should a sub-tenant/lodger go into arrears. If they simply pass the rent on at no actual intermediary financial/business risk to themselves does this make any verbal arrangement, or even a written lodger contract, challengeable? I.e. could the other tenants legally assert that they had full tenancies with the non-resident landlord or agent rather than being merely lodgers of the “head tenant” (in the former case the DPS/S21 rules and procedures would then protect them, whereas in the latter they would not).
The first two you mention are certainly deposits that would need protecting in our view. It would be very much case specific whether you could rent the house to one tenant and then allow that person to have lodgers. However, I don’t see the benefit of this because the landlord would have no control over the lodgers and any deposit paid by the tenant would have to be protected.
Hi there,
I have an AST that started in 2006 with a 1.5 month deposit and some time ago my tenant asked me to use that deposit against their substantial arrears, which I did, leaving the tenancy with no deposit.
I believe that at the time it was legal for me to do this as it was before the deregulation action of March 2015.
Am I correct and can I serve Section 21 notice without any problems?
If there is a problem and I have to go down the Section 8 route then I believe that the deposit protection rules do not apply in the same way and I can serve Section 8 notice regardless of deposit status without the risk of it being declared invalid. Is this correct? Also, what are the risks or downsides of Section 8 vs Section 21? (the agents have advised against it).
Thanks very much for your time.
To keep it fair on those that are paid members, you would really need to be a member before we were able to answer this in detail. However, from what you describe, you should be mostly okay to serve notices and obtain possession. Please see here for details about membership
@Alan you would be sensible to get advice promised or see a lawyer, new deregulation act 2015 affects you and gave you a “window” to protect deposit. Regardless of S8 your tenant may still come after you for not protecting the deposit. You ideally want to get all matters heard at once if you go to Court so that the Judge sees the tenant as a non paying tenant.
Reply to Laura: please see our court form guidance which contains information about what to write in this circumstance.
Hello,
I have been trying to evict a tenant. I failed to protect her deposit but refunded it in cash when I issued the section 21. I applied to the court for the eviction to which she has raised a defence that the date on the receipt of the refunded cash deposit is a day later than the date of service on the section 21. This is simply because I typed the receipt on the computer the evening before I refunded the deposit, the section 21 was posted on the same day. have I messed this up and will the judge dismiss the case? will I have to restart the whole process again form issuing another section 21??
Good evening
I have a question concerning S21 and deposits.
The tenancy was signed 11 Nov 2015
Unknown to us as landlords until last month, our Agent got the tenant to sign on 4 Dec 2015 an agreement that the deposit could be used for rent arrears as the Council were taking their time to pay the housing benefit. Therefore he did not place the deposit into a protected scheme within 30 days because it was used to pay rent.
He did not credit us as landlords with that deposit until last month after serving a s21 notice (served 20 June 2016) to the tenants. Not with standing our issue with the integrity of our Agent, at this moment we need to resolve the legality of his actions and the S21 notice.
As our Agent has a signed agreement (4 Dec 15) concerning the deposit will S215 above apply? Ie
“(2A)Subsections (1) and (2) do not apply in a case where—
a)the deposit has been returned to the tenant in full or with such deductions as are agreed between the landlord and tenant,”
Therefore is serving S21 notice on 20 Jun 2016 ok as there was no
deposit by the end of the initial 30 days.
I would be grateful for your opinion.
This particular circumstance hasn’t been tested to our knowledge as yet. However, our view would be that the section 21 would be okay in relation to the deposit point.
The deposit has had “agreed deductions” and as such, in our view, the prohibition on serving a section 21 doesn’t apply. There is no restriction on when the agreed deductions can be made within section 215.
Thank you for your prompt and encouraging reply
Deposit was protected through DPS within time limit (by previous letting agent) but we are unable to find any evidence the prescribed information was given to the tenant (it may have been given but we can’t find any evidence it was). We have issued a S21 but worried if the tenant was not given the prescribed information and raises this in court OR if the tenant were to simply claim it was not provided and if the court asks for proof it was provided we have a problem and have lost time. The tenant has not mentioned the prescribed information but is throwing every obstacle in the way to block possession and threatening legal action. What should we do, keep quiet and hope for the best or do something else?
It’s not known if it will be brought up. As such, our only advice can be to issue full prescribed information now and then re-serve another section 21 at least 4 days after (to allow delivery of the prescribed information).
The prescribed information can be given late as long as it’s been done before a section 21 is served.
A penalty may be payable but the section 21 can still be relied upon.