Judges rule 14-day deposit protection rule is not legalMake Text Bigger
Tenants have lost two landmark appeals in cases that have rendered tenancy deposit legislation more or less useless.
The ruling means that the current 14-day time limit on protecting a deposit imposed on landlords is merely an administrative requirement and not enforceable in law.
Further, the Court of Appeal stated that providing the deposit is protected before the case is heard by a court, the courts have no power to penalise a landlord for failing to protect a deposit.
The rules state that landlords should face a penalty of three times the deposit paid by the tenant if a deposit remains unprotected after 14 days.
Effectively, this ruling means that as long as a landlord puts a deposit in to a scheme before entering a courtroom, then the law is fully complied with.
The judges were giving their decisions on two tenancy deposit protection cases – Universal Estates v Tiensia and Honeysuckle Properties v Fletcher.
Landlords urged to reclaim tenancy deposit penalties
All three judges commented that they considered the interpretation is unsatisfactory and they found it hard to believe that this is what Parliament intended when it made the legislation.
The court did hold that if a tenant issues proceedings to force the protection of a deposit, then they are probably entitled to their legal costs.
The judges also stressed any attempt to ‘ambush’ landlords by issuing proceedings for an unprotected deposit without writing to them first would not be allowed.
The court further held that deposit protection schemes cannot impose a condition that a deposit must be protected within 14 days.
The current rule under The Dispute Service to register within 14 days is only an administrative requirement and registrations made after 14 days are not invalid under tenancy deposit protection legislation.
Richard Jones, of the Residential Landlords Association, said: “Landlords who have already paid the penalty may wish to take legal advice about claiming it back.”
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