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Tenant unable to claim penalty on Landlord's failure to operate within tenancy deposit scheme after tenancy has ended.
27 July 2011
In 2004 parliament introduced legislation that required landlords operating assured shorthold tenancies to place deposits within a recognised Deposit Guarantee Scheme. The penalties arising for failure to do so came as a shock to many landlords. They could not claim possession based on expiry of the term, and furthermore, the tenant could seek compensation of 3 x the initial deposit. This could be significant.
The Courts softened the blow by subsequently finding in 2010 that landlords could escape penalty if they complied with the statutory provisions, after the issue of proceedings by a tenant, but before the hearing. However it left an unanswered question. Could a tenant claim compensation if there had been a breach during the tenancy, but the tenancy had, in fact come to an end?
On 19th May 2011 the Court of Appeal found that the penalty was no longer claimable once the tenancy had come to an end.
Howell Jones' Litigation Team advise and represent clients on residential and commercial landlord and tenant disputes on a daily basis. If you want to discuss the issues raised in this article, or indeed, any other landlord and tenant matter with the team, please give us a call for an exploratory discussion.
Andrew Petchey, Partner, Litigation
