In Yeomans v Newell, Canterbury court 25 May 2016, the question arose as to whether a deposit is deemed returned in full for allowing a section 21 notice to be served where the deposit was not protected within appropriate time-scales or prescribed information not given. The information provided in this article is based on notes given to us by the claimant landlord whom we are grateful to for informing us about this case.
In 2011, an assured shorthold tenancy was granted to the defendant tenant by the claimant landlord. At this time, a deposit of £300 was paid. This was a portion of what was supposed to be a higher deposit but further instalments were not made.
The £300.00 portion wasn’t protected until 23 November 2015 where it was then held in the scheme operated by the Deposit Protection Service (DPS).
On the 22 December 2015, the deposit was authorised by the landlord to be released in full to the tenant. Then, on 23 December 2015, a section 21 notice was served by the landlord requiring possession of the property.
The tenant actually received payment of the deposit via the DPS on 19 February 2016. Therefore, at the time of service of the section 21, the deposit had not actually been received by the tenant but they could have received the money at anytime from the 22 December onwards.
The section 21 notice was defended on the basis that the deposit had not been “returned in full” at the time the section 21 notice was served.
The solicitor acting for the landlord quoted the case where the payment by a cheque was deemed to have been repaid when the cheque had been received by the tenant, even where the cheque was returned without being cashed (we assume it was this case). It was argued by the landlord that the ability of the tenant to obtain the money once it had been authorised for full repayment was sufficiently similar to receiving a cheque.
The court agreed and held that for the purpose of the statute, it had been returned in full because it was available for the tenant from 22 December 2015 – before the section 21 notice was served. Possession was ordered.
This case has produced the opposite result for a very similar county court case – Ahmed v Shah, Bradford County Court. June 2015. – as reported on the Nearlylegal website.
It is possible in this Yeomans case that the evidence for full repayment may have been clearer and more definitive but otherwise, the two cases are very similar in principle. Both are county court so not binding. We’re sure this situation will be dealt with on appeal sometime in the hopefully not too distant future.