Tenancy Deposits - Double Trouble for Landlords

We acted for the successful tenant in a case decided by District Judge Harrison in the County Court at Brentford, West London on 28 May 2015.
Our client recovered compensation for 2 separate failures by the landlord to give her information about tenancy deposit schemes as required by s213 Housing Act 2004.

The Case

Our client entered into a 12 month fixed term tenancy from 18 May 2012 at a rent of £2,000 pcm and a deposit of £3,000.
The tenancy continued from 18 May 2013 to 24 December 2013 as a statutory periodic tenancy.
The deposit was paid by a third party (who was not a party to the case).

While the landlord, by its managing agents, protected the deposit as required by s213(3) HA 2004, our client claimed that:

1. The landlord had failed to give her the information required by s213(6) upon the original grant of the fixed term tenancy; and
2. Upon the conversion of her tenancy to a statutory periodic tenancy on the expiry of the original tenancy, the landlord was again required to give her the information.
   The landlord admitted that it had not done this but said it was not required to do so.

District Judge Harrison decided that:

1. The landlord had not at any stage given our client the information. She also decided that it was for the landlord to prove that it had given the information but, if that wasn’t so, she was satisfied that our client was able to prove that the information had not been given.
2. It is for the landlord to give the information and it was irrelevant that our client might have known or found out the information through other means, such as through her advisers at the time (following Ayannuga v Swindells, a 2012 case in the Court of Appeal)
3. As the landlord had not given the information at the outset or at any stage during the original fixed term tenancy, a fresh obligation to give it arose upon its replacement by the statutory periodic tenancy (following Superstrike v Rodrigues, a 2013 case in the Court of Appeal). S215B HA 2004 did not obviate the need to give the information again when it had not been given in the first place. (This section, introduced by s32, Deregulation Act 2015, provides that if the requirements of s213 HA 2005 are met under an original tenancy, the requirements will be treated as complied with for any subsequent tenancy.)
4. The landlord should pay compensation of 1.5 times the deposit for the original breach; and one times the deposit for the second breach. A total of £7,500.

Having found that the information was not given, District Judge Harrison did not decide on a further issue.

This was our client’s claim that, even if she had been given the information, it was not in the prescribed form or in a form substantially to the same effect in that, as admitted by the landlord:

• The information omitted the phone, email and fax numbers for the landlord and our client – required by Articles 2(1)(g)(iii) & (iv) of the Housing (Tenancy Deposits) (Prescribed Information) Order 2007;
• The information omitted all information about the third party which paid the deposit – Art 2(1)(g)(v);
• No opportunity had been given to our client to sign the deposit protection certificate before it had been sent – Art 2(1)(g)(vii)(bb); and
• There was no certificate of confirmation – Art 2(1)(g)(vii).

Comment

The case turned on a factual dispute - had the information had been given under the original tenancy?

The landlord’s agent said it sent to our client an envelope containing the tenancy agreement, inventory, the deposit protection certificate and a leaflet issued by the government authorised deposit scheme which protected the deposit (in this case, my|deposits).
There was no covering letter or any follow up to check that the certificate and leaflet had been received.
Nor had the agents told our client to expect the certificate and leaflet.

Our client admitted receiving the envelope but said that it contained only the tenancy agreement and the inventory which she reviewed on receipt and then returned to the envelope which she retained as received.
The court accepted her evidence.

So, the lesson for landlords is not only to give the information but also make sure you can prove it.

And know what information you are required to give – it not just the deposit protection certificate and the leaflet.
The certificate must be completed properly – not just names & addresses but also phone, fax and email.
If a third party paid the deposit, that party’s details must be entered on the certificate and they, too, must be given the information.

Note also the often overlooked requirement to provide a certificate of confirmation of compliance under Art 2(1)(g)(vii) of the 2007 Order.

The case was heard in the Fast Track and we’d made an offer (under Part 36 of the CPR) to settle for considerably less than was awarded.
Consequently, the landlord was ordered to pay our client’s costs on an indemnity (ie an enhanced) basis and additional penalty sums.

The timings of the key events in the case are of some interest.
The original tenancy was granted just 6 weeks after amendments were introduced to HA 2004 under the Localism Act 2011; the last date for giving the information after conversion to a statutory periodic tenancy was only 3 days after the Superstrike case – perhaps a reason why the compensation for that failure was assessed at only one times the deposit; and the case was heard 2 months after the Deregulation Act 2015 amendments came into force.