Harvey v Bamforth – 08/8/08
 46 EG 119
Under the Tenancy Deposit Scheme, a Landlord will only be liable for a penalty under s.214 HA 2004 where he has failed to give the required information at all (s.213(6)(a)) and not where he has merely given the information late (s.213(6)(b))
The tenant (T) was granted an AST and paid a deposit of £525 in June 2007. The landlord (L) lodged the deposit with TDS, an insurance backed scheme. L failed to give T the prescribed information within 14 days of receipt of the deposit. L later gave the prescribed information in Feb 2008. L sought possession but discontinued the action. T claimed for the return of the deposit and payment of a penalty at three times the amount of the deposit pursuant to s.214 HA 2004.
Held : There is a distinction between failure to give the prescribed information at all (s.213(6)(a)) and failure to give it within 14 days (s.213(6)(b)). s.214 can only be exercised where the Landlord has failed to comply with s.213(6)(a)
New Tenancy Deposit Scheme in Operation
On 6 April 2007 , sections 212-215 and Schedule 10 of the Housing Act 2004 are brought into operation. Accordingly, from this date, all deposits (up to the level of £25,000) taken by landlords for Assured Shorthold Tenancies must be protected by a tenancy deposit scheme.
There are two types of Scheme, Custodial and Insurance:
The deposit is paid to the landlord and is passed on to an independent administrator who holds it in a special account – this scheme is free to use
The deposit is paid to the landlord who retains the money and pays a premium to an insurer so as to guarantee the deposit.
See www.comunities.gov.uk/tenancydeposit for full details of these schemes; however, in brief, the new regime will apply as follows:
- The legislation only applies to Assured Shorthold Tenancies; however, these provisions cannot be contracted out of;
- Landlords cannot side-step the rules by seeking a deposit in non-monetary form;
- The Landlord must give prescribed information to the tenant as to what has been done with the deposit within 14 days of receipt;
- Following termination of the tenancy, the Landlord can keep all or part of a deposit if they can demonstrate financial loss arising from the actions of the tenant. If the parties agree on how much of the deposit is to be returned, repayment must be made within 10 days. If the parties cannot agree, the schemes offer a free dispute resolution service;
- Failure to comply carries significant sanctions, including: repayment of the deposit at three times its original value, and an inability to serve a s21 Notice to terminate the tenancy.