Late tenancy deposit protection fines

Late tenancy deposit protection fines

8:54 AM, 11th February 2014, About 10 years ago 72

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I spoke to someone on the NLA helpline this morning who told me that the law is unambiguous – landlords registering deposits later than one month after receipt are liable to be sued for three times the deposit amount.

Looking online, I am unable to find definitive reference to this, and, most importantly, how are courts tending to implement this?

Are landlords being being subjected to these levels of punitive damages?

Can anyone help me with this? Late tenancy deposit protection fines

I am interested to know primarily how this is working out in practice. I would imagine that if it were the case that tenants absolutely have the right to 3X the deposit amount in the case of late registration, there would surely be an epidemic of lawsuits going on right now?

Do you have any direct, recent experience of how this is being implemented or have no cases yet come to court under the new rules yet?

Thanks in advance.


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Renovate To let

9:14 AM, 11th February 2014, About 10 years ago

You have to remember that UK law is constantly refined and updated by case law - Judges deciding to interpret ambiguous legislation via individual cases.

Superstrike v Rodrigues led to this situation but still left ambiguity that is recognised and apparently will be dealt with at some future date.

The damages are set at a maximum of 3 times the deposit, plus the return of the deposit - the judge has leeway within this. He could, for instance, decide that a professional long term landlord with 100 properties should pay more than an accidental landlord with a long-term tenant who missed the publicity. He has the power to decide.

In the meantime, there is some evidence that the flow of cases is being "held back" while the review happens but at the same time, the rodent population (no win, no fee outfits), is actively driving the size of the backlog of potential claimants.

I am sure that this is resulting in many compromises being privately agreed that will not make it into any statistics - e.g. waive right to future action in return for deposit back x 2 minus no win, no fee charges.

A very poor situation for landlords.

Eric Kennedy

9:25 AM, 11th February 2014, About 10 years ago

Reply to the comment left by "Renovate To let" at "11/02/2014 - 09:14":

Thanks. I am just preparing myself right now, I am a first time landlord and received 3/4 of the deposit, with the rest 'to follow', which never did, so I missed the deadline by I think two weeks. Clearly I won't make this mistake again, and I suppose there is a chance that the worst won't come to pass, but I just wanted to get a sense of how this is playing out in courts around the UK.
Because, if I understand correctly, I don't understand why any tenant in a situation where their deposit was registered late would not file. And to make it worse, it seems like they can come back years later and make a claim. Which is probably the single most unfair and unsettling part of this legislation. Does anyone know how long after the tenancy ends a former tenant can bring a claim?
I put my hands up, I did screw up, and I accept that, and it seems I can only hope to get away with it this time. The tenants are moving out, so far things are amicable, but I want to be prepared for what may lie in store...

Romain Garcin

9:26 AM, 11th February 2014, About 10 years ago

The law is rather clear on that specific aspect, actually (housing Act 2004, s.214):
If a landlord does not protect a deposit and give the related prescribed information to the tenant within 30 days of receiving it, he is liable for at least 1x deposit penalty, and at most 3x deposit penalty.

Superstrike clarified that "receiving it" in relation to a statutory periodic AST means the day that tenancy arises.

Industry Observer

9:28 AM, 11th February 2014, About 10 years ago

@Renovate to Let

If you have any evidence that a review is under way other than people moaning about the decision and CLG wishing they had better legislation drafters on their payroll I'd like to know what it is.

There is no ambiguity only wishful thinking. I assume you are referring to the periodic situation and assuming the Law is going to be changed - it won't be because it is clear and the decision in Superstrike was unanimous and very clear.

The reason there aren't that many cases published is that they are dealt with in lower courts and only high profile cases like Superstrike tend to get reported.

There is also an increasing trend post Localism Act for Landlords sensibly to realise it is a fair cop and to settle to avoid going to court and have an even greater loss. Any legal adviser with half a brain cell would advise any Landlord guilty of a s213 offence to buy the tenant off as they are open and shut cases.

Best hope for the Landlord is to blame the agent if they have one as they will have to pay the award

Industry Observer

9:31 AM, 11th February 2014, About 10 years ago


Hello my friend extremely well said and 100% correct.

The Law has always been clear on the periodic tenancy being a new tenancy "arising" just that many practitioners didn't like to acknowledge the fact. So like it or not you have what I call a 'protectable incident' i.e. you need to do something.

May not be very much in terms of what your Scheme requires, from nothing I think for DPS to pressing a couple of buttons for the other two providers. Beware if you use Mydeposits who if you don't give them the date the periodic started charmingly cancel the insurance after 30 days!!

As ever, and I know you agree with this Romain, why risk it?

Press the buttons, re-issue PI but see it as a positive instead of a negative by making sure it is new PI and not just a reissue of the original as some details may have changed and it is an opportunity to 'correct' earlier errors and omissions.

Though the offence will have been committed the penalty will probably be reduced for effort and trying!!

Come on agents and Landlords just grit your teeth, smile and get on with it, as it ain't difficult.

Well said Romain always knew we were on same wavelength really!!!

Mark Alexander - Founder of Property118

9:34 AM, 11th February 2014, About 10 years ago

Reply to the comment left by "Eric Kerfoot" at "11/02/2014 - 09:25":

The UK statute of limitations period is 6 years, i.e. that's how long the threat of a claim exists for.

Have you tried to settle out of Court? If you do please make sure you get a written settlement agreement in full and final settlement.

Has your tenant even applied to the Courts?

Industry Observer

9:51 AM, 11th February 2014, About 10 years ago


6 years post Localism Act 2011 so any trenancy that ended from 5.5.12 it doesn't apply to those that ended prior to the relevant sections coming into force on 6.4.12 so everyone had 30 days from that date to tidy up existing tenancies, fixed term still running or that went periodic after 6.4.12 (which I agree is where Superstrike is unfair), and where there were errors.

And there are plenty of cases waiting, just that the vast majority of tenants don't realise their rights.

After 5.5.12 it is too late to correct errors that count as Localism closed off all previous loopholes, and rightly so. After all like it or loathe it if the legislation is meant to protect deposits then it should do so (all of them including non AST and in just one Custodial scheme if you ask me!!)

Mark Alexander - Founder of Property118

10:07 AM, 11th February 2014, About 10 years ago

Reply to the comment left by "Industry Observer " at "11/02/2014 - 09:51":

The custodial scheme is are fine until a tenant decides to do a bunk after trashing a property or falling into arrears, then try getting your money!

It's my|deposits all the way for me 🙂

Industry Observer

10:16 AM, 11th February 2014, About 10 years ago

Stat Dec route is easy enough if used properly. Unless Scheme then gets contact from tenant within 14 days of trying the disputed amount is paid to the Landlord.

What is needed is the Scottish system where the default position is the Landlord has to agree to ADR and if the tenant does not (including through absence) then once there is no contact for 14 days the disputed amount is again paid out to the Landlord.

Mind the Jocks have got one thing wrong - three providers 5 schemes - but at least they are all custodial. It is insanity that anyone other than an independent 3rd party holds a deposit.

Anyway hot off the press exclusive for you Mark I heard yesterday from someone very near the top in DPS that behind the scenes work is underway to introduce this change to E&W as well. There are two reasons for this:-

One is it is a better system

Second is there is no actual timescale set down in Law when the party refusing ADR has to then take the other to Court. So the other party has to do it.

By "this change" sadly I don't mean just custodial schemes - that would be an improvement!!

Romain Garcin

10:23 AM, 11th February 2014, About 10 years ago

Reply to the comment left by "Eric Kerfoot" at "11/02/2014 - 09:25":

@Eric: "oes anyone know how long after the tenancy ends a former tenant can bring a claim?"

To clarify, unless the tenancy ended before the Localism Act came into force, the 6 years period doesn't start from the end of the tenancy, but from the date the "cause for action arose", which is the 31st day after you received the deposit.
This means that the period will expire sooner (always look at the bright side of life).

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