Late tenancy deposit protection fines

Late tenancy deposit protection fines

8:54 AM, 11th February 2014, About 8 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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by Industry Observer

10:39 AM, 12th February 2014, About 8 years ago

NO - it is the deposit collected that matters.

What happens for example if you start at £2000 but then agree to reduce it to £1600 - you never did reach the £2000 intended original figure.

Read the Statute - what has been collectd as a deposit (and thereby hangs another debate!!) has to be dealt with in accordance with Statute and TDP requirements.

Not what you think you may collect or hope to - but what you hold in your hand

by Sharon Betton

12:07 PM, 12th February 2014, About 8 years ago

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

A difficult situation, not made any easier when the tenant does not give the full deposit, as my understanding is that the protection scheme would want the full sum protected, not 3/4 this week, the other 1/4 some time down the line. I have advised landlords - 1) never give the keys without the full deposit.
2) If you have said you will accept the deposit in dribs and drabs, notify the protection scheme of why you are unable to protect the full sum.
I hope the tenant does not seek recompense, but bear in mind for the future - there may be some tenants who would do this quite deliberately so they can make a claim.

by Industry Observer

12:18 PM, 12th February 2014, About 8 years ago


As I constantly keep advising never, ever rely on what a Scheme says what matters here is what the LAW requires.

You must protect a deposit within 30 days of receiving it. I appreciate the issues and Schemes always work in their own best interests and usually against their members (especially The Dispute Service) and always have done, but if you collect £600 out of £800 on March 1st and on March 30th still only have £600 I know what I'd do no matter what any of the schemes say.

I would especially send the money to DPS and then see what the system wants - that can always be fiddled with.

I know someone high up in DPS I will ask them for you. As I only believe in DPS and all my clients use them and also as the other two never needed to and only came into existence because of CLG inability to resist self interested lobbying I won't bother asking the other two if you don't mind!!

by Robert M

12:33 PM, 12th February 2014, About 8 years ago

Reply to the comment left by "Industry Observer " at "12/02/2014 - 10:39":

I have not read the statute recently. When I last did I formed the opinion that it was not fit for purpose as it only deals with Utopia, where an agreement is finalised within 30 days of start date and deposit paid in full on time.

However, I remember when I did read it there was a reference to a deposit paid (in the singular) for a tenancy. Therefore, if your agreement specifies a deposit of £2,000 but only £1,600 has been paid (without agreement to amend to the lower figure) it could be argued that the deposit has not been paid, but only part of it on account.

I do not wear a wig to work and I hasten to add that I might not advance this argument very strongly, but I bet that a QC would run it and it would take up a few paragraphs in any case report. Which way a judge would rule is open to debate, but not blindingly obvious.

by Industry Observer

12:39 PM, 12th February 2014, About 8 years ago

Hi Robert M

Yes good idea put that wig away that is wishful thinking on deposit definition - it is all about the money held at any point in time.

With respect the wishful thinking and not fit for purpose comments are of course those from persons who'd rather not have to do it - like LL or agents. I'm just a humble consultant giving advice designed to keep either species out of jail in criminal situations (lack of gas safety, strangling the tenant etc) or not out of pocket in civil such as TDP.

by Robert M

14:01 PM, 12th February 2014, About 8 years ago

Reply to the comment left by "Industry Observer " at "12/02/2014 - 12:39":

With all due respect the suggestion that anyone who criticises the relevant legislation is against deposit protection is back to your usual "mine is the only opinion that matters, as I am always right" approach.

Are you saying that the legislation is fit for purpose and you would not seek any changes?

I think we all know what the legislation intends - I just cannot see how it copes with reality, simply because it does not.

by Industry Observer

14:50 PM, 12th February 2014, About 8 years ago

Robert mine is far from the only opinion that matters and I am not always correct, and I certainly didn't mean to give the impression that you have taken.

I think the legislation is fit for purpose the problem is too many people either do not understand it or else expend incredible amounts of energy trying to find ways round it (and other legislated and regulated activities too).

We may think it is daft, we may think we could do better and should be in CLG instead of the numpties that are, for certain tere are too many TDP providers running too many schemes, but we are where we are and have to operate within the requirements placed upon us whether we like them or not.

My apologies if I have offended in any way - "with respect" and "with all due respect" are always invitations to disaster

by Romain Garcin

18:12 PM, 12th February 2014, About 8 years ago

Definition of 'tenancy deposit' in statute is 'money held as security...'. So you may have an agreement to receive of £2000 deposit, but as soon as you get even a single pound of that amount you have received a deposit for the purpose of deposit protection regulation.

It's not too difficult to predict what a court would rule....

by Mary Latham

18:23 PM, 12th February 2014, About 8 years ago

IO let's please remember that the DPS cost taxpayers £12.7M in 2011 since this is supposed to be a free service run from the interest gained in the monies deposited I would say it is far from free. I am happy to pay the transparent fee of my chosen scheme but I am not happy to see my tax pounds used to subsidies "a free service".

None of the schemes got it right pre Superstrike and all of them have been working with DCLG to find resolutions going forward

In answer to the OP there are many no win no fee companies that have been set up purely to go after landlords who have not met the regulations on deposit protection. They like the PPI companies base their fees on the penalties levied against landords and if there was not money it in they would not be offering no win no fee because most of them don't take a cut of the returned deposit only the penalties

by Robert M

11:47 AM, 13th February 2014, About 8 years ago

Reply to the comment left by "Industry Observer " at "12/02/2014 - 14:50":

IO no real offence taken but please concede that there is no real answer to at least two points.

1) If you renew an agreement three months before the end of the fixed term with the deposit to be carried over, there is no clear indication of when you "receive" the deposit for the renewal. You might argue that you cannot possibly have received it until the end of tenancy one. That might fit with the Superstrike case, but in that case the new tenancy only came into place by operation of law at the end of the fixed period. In my example, you sign a new agreement three months earlier.

2) This is s bit theoretical but if you are on a statutory periodic tenancy, I seem to recall being told years ago that, strictly speaking, you cannot end a statutory periodic tenancy and that in fact you give notice not to renew at the end of a period. The argument (which I have never checked because it seemed an largely irrelevant esoteric point) was that each period is a separate mini tenancy. If so, under Superstrike you need to protect the deposit every month.

In an ideal world all tenancies are granted to a married couple with secure jobs, 1.8 children, who read a quality daily paper and have three credit cards. The real world is somewhat different.

I am not interested in finding a way round the deposit legislation. All I want is clear legislation and a set of scheme rules that takes into account the commercial realities. The fact that a case such as Superstrike goes as far as the Court of Appeal on a relatively routine point most thought did not apply is, in my view, a clear indication the legislation is poorly drafted, which is nothing new. However, the fact we are still left in limbo so long after the decision is nothing short of a disgrace.

Due to the fact there is a doubt about the timing of receipt, in my example above I have decided (whether right or wrong) to protect my early renewal deposits within 30 days of the new agreement being signed. This means for two months or so I have protection for twice the amount I hold. I see nothing in the legislation that suggests you cannot protect a full deposit before it is all received and I make it quite clear in the second certificate I provide that the paperwork should not be taken as a receipt for amounts which may not at the time have been paid.

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