Landlord's Obligations Under the Tenancy Deposit Scheme

The Court of Appeal, Civil Division, recently held that the relevant date by which a landlord had to perform his tenancy deposit scheme obligations under s 213(3) and (5) of the Housing Act 2004 was the date of proceedings brought by the tenant under s 214.

Section 213 of the Housing Act 2004 provides that any tenancy deposit paid in connection with a shorthold tenancy must be placed in a tenancy deposit scheme and dealt with according to that scheme. One of the requirements of the Act is to place the money inside the scheme within 14 days of receiving it.

Section 214 of the Act provides that where the initial requirements under s213 have not been followed then a) possession proceedings fail and b) an action may be bought by the tenant for damages from the landlord of up to three times the amount of the deposit.

The proceedings concerned two unrelated matters, which were joined as they raised the same issue. In both cases the landlords had issued proceedings against the tenants for unpaid rent in respect of their assured shorthold tenancies. The defendants counterclaimed under s 214 seeking sanctions against the claimants for breach of their obligations under s 213 in respect of repayment of their tenancy deposits. In both cases, the claimants had not complied with their obligations to meet the 'initial requirements', nor provided the defendants with the information regarding the deposit scheme. Once proceedings began the deposits were then protected by tenancy deposit schemes.

The issue to be determined was the time by which a landlord had to have performed its obligations under s 213 of the 2004 Act before it was liable to sanctions under s 214.

The court ruled that late, but nevertheless due, compliance by the landlord with his obligations under s 213 furnished him with a complete defence to any claim by the tenant under s 214. Therefore compliance with s 213 at any time up to the date of a Hearing for an action under s 214 would provide a defence to that action.

Oliver Kew

Published on 15/11/2010