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Landlords! Deposit Protection Scheme
Beware of a trap that can catch Landlords out if they do not follow the Tenancy Deposit Scheme. Make sure you set up protection for deposits at the outset of a tenancy.
The Tenancy Deposit Scheme came into force on the 6th April 2007. If the landlord does not protect a tenant’s deposit they will be ordered to repay three times the amount to the tenant. Cases this year have emphasised the importance of landlords protecting deposits properly to avoid disputes.
In the case of Universal Estates v Tiensia the tenant, Ms Tiensia, paid the deposit in instalments. She fell into arrears and the landlord served a s8 notice based on rent arrears. Ms Tiensia counterclaimed for 3 x the deposit sum on the basis that it was unprotected. The landlord then protected the deposit with a Deposit Protection Service and faxed the certificate to Ms Tiensia. However, the judge found this was not enough as the landlord had failed to comply with the Deposit Protection Service’s terms and conditions and was thus in breach of s213(1) and (4) and s214(1)(a) of the Housing Act 2004. Ms Tiensia was awarded £7,000.
In Seghier v Rollings, Ms Rollings, the landlord only protected the deposit shortly before the hearing and handed the certificate to the tenant at court. However, she did not fully comply with the requirements and again the order was made in favour of the tenant.
In Beal v Tenant, Mr Beal was evicted by his landlord’s mortgage company due to his landlord’s mortgage arrears. As he was not given any information about his deposit by his landlord, he was successful in claiming for 3 x the deposit sum and was awarded £500 damages for the eviction.
It is clear that it is in the landlord’s interest to follow the rules properly otherwise they risk being involved in potentially very expensive disputes.