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Landlords must supply deposit protection information

Most landlords who have tenants on assured shorthold tenancies will be aware of their obligations to tenants, with regard to the protection of their deposits and the provision of information.

The obligations took effect on 6th April 2007 but can catch assured shorthold tenancy agreements originally entered into before that date. If for example an “old” assured tenancy is renewed on substantially the same terms and a new agreement entered into after 6th April 2007, the deposit paid under the original agreement must be protected at that stage.

There are two types of tenancy deposit scheme. The first is a custodial scheme where the landlord pays the deposit to a scheme administrator within fourteen days of receipt. The second scheme is an insurance based one. The landlord retains the deposit but is required to pay a fee and insurance premium to the scheme administrator. In the event of a dispute the landlord must pay the deposit into the scheme and if he fails to do so, the scheme administrator pays the tenant the sum due.

Under both schemes the landlord is required, within 14 days to serve prescribed information on the tenant.

The compliance regime (prescribed information and payment of the deposit within 14 days) for landlords is very rigorous.

Unless and until the landlord has complied, he cannot serve the standard two months notice requiring possession.

If a court finds there has been non compliance it must order the landlord or agent (if he has received the deposit) to pay the tenant a penalty of three times the amount of the deposit.

Applications can only be made by tenants during the period the tenancy subsists.

A recent court case established, however, that a landlord cannot be subject to the triple penalty for non compliance with the rules regarding the holding of deposits provided that he takes the necessary action before the matter comes to court.

It would be understandable, therefore, if landlords considered that there was a similarly relaxed attitude regarding the provision of the prescribed information.

However, in a recently reported case a landlord who provided a tenant with some but not all the prescribed information was still made to pay the triple penalty despite the fact the deposit had been returned to the tenant by the time the case came to court.

Gullands Solicitors represents a number of major landlords in the Maidstone area. For advice contact Philip Grylls, Partner and head of the litigation department at Gullands