Landlords given wrong deposit advice, warns solicitor

Landlords are being wrongly told their possession claims will fail because of their tenant deposit paperwork, according to solicitor David Smith.

He says some of the confusion is coming from the lawyers advising them.

Writing on LinkedIn, Mr Smith criticised solicitors who tell landlords and letting agents that notices may be invalid or deposits improperly protected when, in his view, neither is the case.

He said: “This causes complaints and division between parties which is frequently unjustified.”

His warning centres on prescribed information, the details landlords must give tenants about their deposits, and how the courts approach alleged errors in those documents.

Incorrect advice on possession claims

Mr Smith said he had recently been asked to advise on deposit protection several times, despite having thought the subject was largely settled.

He wrote: “The reason I am writing about this, and the reason for my ire, is that I am seeing a lot of really unhelpful and inaccurate advice being given.

“This is coming from solicitors, so they should know better really.”

He acknowledged that possession proceedings could go badly in the county courts even where a landlord had a valid case.

However, he argued that this did not justify telling clients their documents were defective when they were not.

Mr Smith also questioned the authorities being used to support some advice.

He said: “I am also aware that it is common to quote, often outdated, County Court cases when saying this.

“None of these cases are in any way current or valid and there is authority from the Court of Appeal which discounts most of it.”

What the paperwork requires

According to Mr Smith, prescribed information does not have to follow a single standard form or appear together in one document.

Certain details must be certified as accurate to the best of the landlord’s knowledge and belief, including the deposit amount, relevant names and addresses, and the circumstances in which deductions may be made.

Tenants must have an opportunity to sign the certification, he explained, but whether they actually do so is irrelevant.

He pointed to Court of Appeal decisions concerning authorised signatures, signed covering letters and mistakes that a reasonable tenant could understand by referring to other documents.

His argument is that these decisions leave less room for technical objections than some advisers suggest.

Supreme Court will revisit the issue

However, the legal position faces another test when the Supreme Court considers Lowe v Charterhouse in November.

Mr Smith expects the court to continue the approach taken in recent decisions, although the outcome remains undecided.

For landlords already being told their paperwork defeats a possession claim, he suggested asking their adviser to explain the reasoning.

He wrote: “In any event, a landlord or agent being told that their possession case is doomed to fail because of the wording of the PI might be well advised to ask why and to point to the cases mentioned above.”