Please note: if any case is on or after 6 April / 6 May 2012 this article might not be reliable
After the handing down of the judgement in Draycott v Hannells 2010,it would seem clear as long as deposit has been protected, albeit late, there is a good possibility that a landlord can avoid the penalty provisions of the tenancy deposit scheme part of the Housing Act 2004.
Much comment has been made in several cases and on the internet about “the spirit of the legislation” and using this term to suggest the 14 day rule should mean after day 14, the tenant is entitled to three times compensation whether the deposit is subsequently protected or not.
I would disagree with this approach to the spirit of the law. Let’s go back 10 years. Around this time, the civil procedure rules were introduced. Although they were intended to modernise court procedure, they also introduced many measures to keep claims out of court by introducing several pre-action protocols. Recently, there is even a new pre-action protocol for ALL claims where there is no specific protocol. The intention of these several protocols is to give the parties the opportunity to reach conclusion without the need for court proceedings.
In addition to the CPR, mediation is being heavily promoted by the courts and Government.
Why then, if there is all this effort going into keeping court cases to a minimum, would Parliament create a piece of legislation that, by it’s nature could significantly increase the workload of the courts? The answer is, (in the authors opinion) they didn’t. What the TDP legislation is essentially saying is, as long as a landlord or agent has protected a deposit and provided the prescribed information before a hearing, the purpose of the legislation will have had it’s desired effect and the tenant will be in no worse a position and so shouldn’t profit out of genuine mistakes by landlords or agents. However, if a landlord or agent simply refuses to ever protect a deposit, then the court will (quite rightly) penalise the appropriate person.
Besides which, a landlord is prohibited from serving a section 21 notice at any time when the deposit is not protected [s.215], so there is a continuing sanction contained within the legislation.