Penalties Landlords Face If Deposit Not Placed in TDS Scheme

What are the penalities if a Landlord fails to place the tenants money in a Tenancy Deposit Scheme within 30 days.


Under the Localism Act 2011 if the tenancy is still ongoing the Court must order that the whole of the  deposit be  paid to tenant or into a  custodial TDS scheme.


If however the tenancy is over the Court may order the deposit to be paid in full to the client or alternatively the deposit may be ordered to be used by the Landlord for unpaid rent, or to offset damage to the property etc


The actual penalty that will be payable is variable and will be anything between 1 and 3 x the amount of the deposit.

This published article may contain information of general interest about current legal issues, but does not give legal advice

What happens if a Landlord has not protected the tenant's deposit and he serves a Section 21 Notice

If a Landlord has not protected the tenant's deposit and he serves a Section 21 Notice, the Notice will be considered to be invalid

If the Landlord has protected the deposit within the 30 days period but has not served the prescribed information, the Landlord can serve the prescribed information late which will allow him to serve the Section 21 Notice however the Tenant can still make a claim against him.

If the landlord has not protected the deposit at all there are three things that a Landlord can do:-

1.   Return the deposit in full immediately

2.   Agree with the tenant what deduction should be made in respect of damage etc to property (if a tenancy is ongoing this might be in impractical solution)

3.   If they have already been sued then the Court will  make the appropriate order or the Landlord can return the deposit and provide a monetary sum in full and final settlement of the claim, however if this is done outside the Court's jurisdiction the Landlord needs to ensure that such an agreement is documented and signed

The above relates to all tenancy created after the 6th April 2012

This published article may contain information of general interest about current legal issues, but does not give legal advice

Who is owed an obligation under the Tenancy Deposit Scheme

In The Housing Act 2004 Section 212 9(a)  it states "references to a landlord or landlords in relation to any shorthold tenancy or tenancies include references to a person or persons acting on his or their behalf in relation to the tenancy or tenancies,"

This potentially means letting agents could be liable for breaching the obligations under the Tenancy Deposit Scheme The leading case in this matter is Draycott v Hannells Letting Limited 2010 full details of which can be located at http://www.bailii.org/ew/cases/EWHC/QB/2010/217.html

This published article may contain information of general interest about current legal issues, but does not give legal advice

Who does the Tenancy Deposit Scheme protect and who can make a claim under the Tenants Deposit Schemes

The Scheme is there to protect theTenant, however this mean that where joint tenants provide a deposit those same joint tenants must all make a claim, if one of the joint tenants does not or cannot agree to make a claim then the other tenants may be at a disadvantage.

Further to the Housing Act 2004 Section 23.10 the other people who are protected under the scheme are relevant parties who have paid the deposit on behalf of the tenant.  In many instances this will be the tenant's parents, however in some instances letting agents take deposits from tenants by credit card and this is a loan.

Therefore it could be considered that the credit card company may be a relevant party  and as such the both the parents/party who paid the deposit on behalf of the tenant/or credit card company may be able to bring a claim if the deposited is unprotected or incorrectly served in the prescribed format (Housing Act 2004 Section 213 -5 & 6)

So Landlords need to be aware that it may be necessary for you to serve not just the Tenant but also any relevant party with details of the authorised scheme applying to the deposit within 30 days of receipt of the deposit monies in the prescribed form.

This published article may contain information of general interest about current legal issues, but does not give legal advice

What obligation do Landlords have to Tenants in regard to Deposits.

Tenants are you aware that under the Housing (Tenancy Deposits) (Prescribed Information) Order 2007  not only is it necessary for your deposit to be placed in a protected scheme and for you to be informed of the way in which the scheme works but you must also be provided with details of the Landlord's

Name
Address
Telephone
E-mail
Fax
Details of the amount of deposit taken
The Start an finish date of the tenancy agreement
Who holds the deposit
and your details should also be noted

An obligation of a landlord that is frequently overlooked is the  requirement that you are informed by reference to the tenancy agreement in what situations deductions can be taken from your deposit.

Further you must be provided with Certification from the Landlord that this information is correct.

This published article may contain information of general interest about current legal issues, but does not give legal advice

Where should you place your tenant's deposit monies

When deciding where to place tenant's deposit monies Landlords may be interested to know that under the Government's Custodial Scheme there is a statutory process which can be followed when Tenants disappear.

If a landlord has made attempts to locate and inform the missing tenants of the consequences of their actions they can approach a Solicitor and sign an Oath confirming that they have made such attempts to locate the missing tenants and providing details of any deductions they have incurred and thereafter they are allowed to release the deposit monies.

Neither of the two insured schemes have this facility and their view will be that since the tenant's monies are held by the Landlord or the letting agent, if usuccessful efforts have been made to find the tenants and the landlord/letting agents has written to them informing them of the consequences of their actions then there would appear to be no dispute. 

The Landlord/letting agent must therefore make their own decision as to whether they release the deposit but if they do and the tenant returns within 6 years then the insurers will expect the money to be returned to them for adjudication.

This published article may contain information of general interest about current legal issues, but does not give legal advice

Is your Landlord responsible for undertaking  repairs at  your leased premises.

Your Landlord will be obligated to repair your premises when:-

a) there is disrepair;

b) if your landlord has an obligation to repair your premises and has been informed of the disrepairs

The law has a strict definition of the word "disrepair" and for a condition of disrepair to exist two points must be satisfied:-

a)  there has to be some deterioration of a section of your premises from its original better condition

b) the responsibility must be on the person who is accountable as a result of either an expressed or implied agreement.

In the event  that there is a disrepair, no liability can arise under a repairing covenant unless your Landlord is aware of the need for repair, you can inform him orally or in writing but make sure that you make a note of the times of any conversations you have with him/her regarding the repairs and keep a copy of your correspondence,   In the event that he/she does not respond to you then you should forward a standard protocol letter to your Landlord, prior to issuing proceeding.

For further information or assistance please telephone us on 0203 005 3284 or contact us at enquiries@affordablelawforyou.co.uk

This published article may contain information of general interest about current legal issues, but does not give legal advice