Summaries of Cases Involving Tenancy Deposits and the Housing Act 2004

Summaries of cases involving tenancy deposits and the Housing Act 2004

Nic Madge (18th August 2012)

Note: Many of these decisions will have to be reconsidered in the light of Localism Act 2011 s184 which makes significant amendments to Housing Act 2004. See eg Hashemi, Localism and the Phoenix of Tenancy Deposit Protection by David Smith [2011] JHL 121.

Court of Appeal

Hashemi v Gladehurst Properties Limited [2011] EWCA Civ 604, 19 May 2011; [2011] 4 All ER 556; [2011] H.L.R. 36 In 2007, Gladehurst let a flat to Mr Hashemi and Mr Johnson under an assured shorthold tenancy for a fixed term of one year. The rent was £2,080 per month. They also paid a deposit of £6,240 which was held by the landlord as stakeholder. The deposit was never registered or paid into a tenancy deposit scheme. Instead, it was retained by Gladehurst in its own bank account until October 2008 when the tenants vacated the flat. In February 2009, both tenants claimed a sum equal to three times the deposit under Housing Act 2004 s214. District Judge Manners struck out the claim on the ground that it had been made after the tenancy had come to an end and that therefore the provisions of s214 no longer applied. HHJ Cryan allowed the tenants’ appeal against the striking out. The Court of Appeal allowed an appeal by Gladehurst. The power of the court to make an order under s214(3) and (4) is no longer exercisable once the tenancy has come to an end. The grounds for a s214 application cease to exist once the lease expires and no order under either s214(3) or (4) can therefore be made after that date. From that moment, the application ceases to be “such an application” as is described in s214(2). Note: It appears that the effect of this case will be reversed by Localism Act 2011 s184 (not yet in force).

UK Housing Alliance (North West) Ltd v Francis [2010] EWCA Civ 117; 24 February 2010; [2010] 3 All ER 519, [2010] HLR 28 Mr Francis entered into a sale and leaseback contract relating to his home with UK Housing Alliance. He was paid 70% of the sale price on completion and would receive the balance of 30% after ten years on the giving up of possession. The contract provided that UK Housing Alliance might retain 30% of the purchase price if it terminated the tenancy. The Court of Appeal determined that this provision was not an unfair term within the meaning of the Unfair Terms in Consumer Contracts Regulations 1999 SI No. 2083 para 5. It also held that the payment of the final 30% to Mr Francis was not a deposit within the meaning of Housing Act 2004. The references in that Act to “paid”, “received”, “repay” and “transfer of property” were “inapt … to describe a situation in which a tenant pays nothing but is the person to whom money is paid.” [para 9]

Vision Enterprises Ltd (t/a Universal Estates) v Tiensia [2010] EWCA Civ 1224; 11 November 2010; [2011] 1 All ER 1059, [2011] L&TR 6; [2011] HLR 10 Universal Estates granted Ms Tiensia an assured shorthold tenancy. The deposit of £2,400 was paid in instalments. Later, the landlord sought possession relying on HA 1988 Sch 2 Grounds 8, 10 and 11. Ms Tiensia defended the possession claim and counterclaimed for a payment under HA 2004 s214(4). The landlord subsequently registered the deposit with Tenancy Deposit Solutions Ltd, an online, insurance-based, tenancy deposit scheme. The certificate was faxed to Ms Tiensia on 3 November 2008. The terms of the scheme (as set out in the Information for Tenants leaflet) stated: ‘Within 14 days of receiving the deposit from you, your landlord/agent must protect the deposit with the scheme as well as provide to you details of how your deposit is being protected and what to do if there is a dispute about the repayment of your deposit at the end of the tenancy agreement.’ On an application for summary judgment on the counterclaim, a district judge accepted that the ‘initial requirements’ of the scheme itself (as well as s213) required the landlord to protect the deposit and provide the required details within 14 days and that, therefore, this requirement could not be satisfied once the 14 days had passed. He ordered the landlord to pay Ms Tiensia £7,200. HHJ Ellis allowed an appeal, holding that the sanctions in s214(3) and (4) did not apply where the landlord had complied with the requirements of the scheme, and provided the information to the tenant by the date of the hearing. The Court of Appeal, by a majority, dismissed Ms Tiensia’s further appeal. Rimer LJ, with whom Thorpe LJ agreed, stated that the pre-condition of a tenant’s application to the court under s214 was not a failure by the landlord to comply with the ‘initial requirements’ or the notification thereof to the tenant within the 14-day period specified in s213. It was the failure to comply with either of those obligations at all. So, if a landlord is late in complying with the dual s213 obligations, but does so before any s214 proceedings are brought by the tenant, the tenant has no cause of action under s214. Such an interpretation was not only supported by the language of the Act, but was also consistent with the purpose of the legislation which was to achieve the due protection of deposits paid by tenants, ideally within the 14-day period but, if not, then later. It could “not be its purpose to punish landlords who may for example, for innocent reasons, be just a day late in securing such protection.” [para 40] Further, the landlord has until the hearing of the tenant’s s214 application to comply with the s213 ‘initial requirements’ and notification requirements. If there is compliance before the hearing, “it must follow that the tenant’s section 214 application will fail although no-one suggested that in such a case the tenant would not ordinarily be entitled to recover from the landlord the costs of his claim.” [para 41] Sedley LJ dissented. (The same conclusion was reached in Honeysuckle Properties v Fletcher which was heard simultaneously.) Note: It appears that the effect of this case will be reversed by Localism Act 2011 s184 (not yet in force).

High Court Draycott and Draycott v Hannells Letting Limited [2010] EWHC 217 (QB); 12 February 2010; [2011] 1 W.L.R. 1606; [2010] 3 All ER 411, [2010] HLR 27; [2010] L&TR 12 On 28 February 2008, Derby Build Ltd (“the actual landlords”) granted the Draycotts an assured shorthold tenancy for twelve months. Hannells were the letting agents for the actual landlords. The agreement provided that the tenants were under an obligation to pay a deposit of £2,700 to Hannells who were to hold it as stakeholders as security for the tenants’ performance of their obligations under the agreement. The deposit of £2,700 was credited to Hannells’ account on 4 March 2008. This was a deposit which was required to be protected under Housing Act 2004. It was registered and lodged with the Deposit Protection Service (“DPS”) on 19 May 2008. Their terms and conditions provided “The Landlord or Letting Agent is responsible for ensuring that Deposits are submitted for protection within 14 calendar days of the date of receipt by the Landlord”. The tenants were informed of the payment to DPS on 21 May 2008. The tenants claimed that there was a failure to comply with the initial requirements and brought proceedings under s214(4) for three times the amount of the deposit. Hannells argued that (1) a s214 claim could only be brought against the actual landlord; and (2) no order could be made under s214(4) where the tenant commenced a claim at a time when the deposit was in fact protected. HHJ Lea rejected both arguments. Hannells appealed. Tugendhat J held that HHJ Lea’s interpretation of the meaning of “landlord” in s214(4) was “clearly correct”. The words of s212(9) were clear and unambiguous. There was no occasion to look at Hansard or to any other extraneous material to interpret s.214. The words in s214(3)(a) “the person who appears to the court to be holding the deposit” were not otiose. They limited the scope of any possible order under s.214(3)(a) to the person holding the deposit. They prevented such an order being made against any other person who would come within the statutory definition of the landlord – for example a letting agent who, at the time of the making of the court order, was not holding the deposit. No such limitation would be appropriate in s214(4). The penalty should be imposed on the person who was responsible for the failure to comply with s213. In this case that was Hannells, not the actual landlord. After considering the definition “the initial requirements” in s213(4), Tugendhat J held that the obligation to make a payment into the scheme was the initial requirement of the scheme, and not the requirement that that be done within 14 days. The time limit of 14 days was a requirement of s213(3). It followed that there was a breach of s213 during the period in which the deposit was not lodged with the scheme. However, it “would be a strained interpretation” to interpret s214 so that the 14 day time requirement was to be considered a part of the initial requirements of the scheme. If the 14 day requirement was not part of the initial requirements of the authorised scheme, then payment of a deposit into the scheme more than 14 days after its receipt, but before the tenant commenced proceedings, did not come within s214(2)(a), and the court could not make an order under s.214(3) or (4). Accordingly, Tugendhat J allowed the appeal. Note: It appears that the effect of this case will be significantly modified by Localism Act 2011 s184 (not yet in force).

Potts v Densley [2011] EWHC 1144 (QB); 6 May 2011; [2011] L&TR 31 Ms Potts was an assured shorthold tenant. She was obliged to pay £1,590 to her landlords, Mr Densley and Ms Pays, as a deposit. Due to an error by her bank, the deposit was paid late. Ms Potts exercised a break clause, giving notice of termination of the tenancy. The deposit was only received by the landlords after that notice had been given. Ms Potts refused the landlords’ offer to pay the deposit back to her directly, requiring it to be paid into a custodial scheme. Shortly afterwards, she issued a claim for £4,770, being three times the amount of the deposit pursuant to Housing Act 2004 ss213 and 214. The deposit was not paid into a custodial scheme until two days after the tenancy had come to an end, although that was nearly a year before the date of the hearing. The prescribed information was not provided to Ms Potts at all. HHJ Hallon dismissed the claim. She decided that there had been a technical breach of the requirement to secure the deposit, but refused to impose the sanction laid down by s214(4) on the grounds that in the unusual circumstances of the case, it would not be in the interests of justice to do so. Ms Potts appealed. Sharp J dismissed the appeal. Section 214(4) is mandatory in that once a finding has been made that a deposit has not been secured in accordance with the Act, or that the prescribed information has not been provided, there is no discretion to refuse to make an order for the payment of three times the deposit sum under s214(4. Once the judge had determined that there had been a breach of s213(4), she was wrong therefore to refuse to make an order under s214(4). However, following Vision Enterprises Ltd (t/a Universal Estates) v Tiensia [2010] EWCA Civ 1224, [2011] HLR 10, Sharp J upheld the judge’s decision on the ground that the landlords had until the date of the hearing of the s214(4) claim to comply with the provisions of s213(3). They had done that, albeit after the determination of the tenancy. Accordingly, they had a complete defence to the s214(4) claim. Note: It appears that the effect of this case will be significantly modified by Localism Act 2011 s184 (not yet in force).

Suurpere v Nice [2011] EWHC 2003 (QB); 27 July 2011 Mr and Mrs Nice granted Ms Suurpere an assured shorthold tenancy for a fixed term of 6 months, at a monthly rent of £300.00. Ms Suurpere paid a deposit of £500, but Mr and Mrs Nice did not in fact transfer the deposit from their bank account to the Deposit Protection Service until 20 July 2009. They informed Ms Suurpere of this transfer by a letter of the same date. After serving notices which failed to comply with Housing Act 1988 s21, Mr and Mrs Nice issued summary proceedings for possession in Guildford County Court. On 10 August 2009, Ms Suurpere issued proceedings against Mr and Mrs Nice claiming the return of her deposit and a sum of three times the amount of the deposit (Housing Act 2004 ss213-214). She left the property on 14 August 2009, allegedly as a result of unlawful harassment by Mr and Mrs Nice. She did not return. At trial, HHJ Reid QC dismissed her claim relating to the deposit, finding that, since the deposit had in fact been lodged under the Deposit Protection Scheme on 20 July, before the commencement of her proceedings on 10 August, the penal sanctions in s214(4) did not apply. Ms Suurpere appealed, contending that Mr and Mrs Nice were in breach of s213(5) and (6)(a), in that they failed to provide the information required by subsection (5) in the prescribed form. Cox J allowed her appeal. After referring to Tiensia v Vision Enterprises Limited [2010] EWCA Civ. 1224, she said Whilst the primary focus in the cases involving these statutory provisions has so far been on the deposit, it is clear that a landlord’s obligations … are two-fold. Parliament regards the landlord’s obligation to provide the prescribed information as being of equal importance to his duty to safeguard the tenant’s deposit. Judges who have to determine the extent of a landlord’s compliance with these provisions will always need to consider whether the prescribed information has been supplied to the tenant, in addition to the question of protection of the deposit. The list of particulars to be provided is detailed and specific. The requirement for landlords to provide such detailed information, together with the sanction for non-compliance, demonstrate the importance attached to the giving of particulars, certified as accurate by the landlord, which will enable tenants to understand how the scheme works and how they may seek the return of their deposit. … [It] will make no difference to the landlord’s statutory obligation to provide the prescribed information if, by the date of the hearing, the tenant’s deposit has been repaid. [41. 43] The obligation is that of the landlord personally. Provision of information to a tenant by the Deposit Protection Service does not amount to compliance by the landlord personally with the s213(5) and (6)(a) obligation. In this case, Mr and Mrs Nice did not address the obligation to give Ms Suurpere the prescribed information, despite the fact that she had pleaded this breach specifically in her Particulars of Claim. In her judgment, Cox J referred to the existence of a prescribed information template for landlords at http://www.depositprotection.com/documents/prescribed- information-template.pdf”. The decision of the Court of Appeal in Gladehurst Properties Ltd v Hashemi [2011] EWCA Civ 604, was of no assistance to Mr and Mrs Nice because the tenancy had not been terminated before the trial. Cox J ordered Mr and Mrs Nice to pay to Ms Suurpere the sum of £1,500.00.

County Courts Baafi v Mapp Central London County Court; 24 June 2010 Ms Mapp was the assured shorthold tenant of a house owned by Ms Baafi. A deposit was paid by the tenant and registered by the landlord with the Tenancy Deposit Scheme provider "My deposits.co.uk". The certificate provided by My deposits.co.uk stated on its face "Part 1 [of the certificate] does not satisfy the legal requirement for the landlord/agent to tell the tenant what to do if at the end of the tenancy agreement the landlord/agent or tenant cannot be contacted. Nor does it explain the circumstances in which the landlord/agent will retain part or all of the deposit. This information will normally be included in the tenancy agreement." The tenancy agreement had been drafted before the commencement of the tenancy deposit scheme legislation and so made no specific reference to tenancy deposit schemes or the prescribed information required by Housing Act (HA) 2004 s213(5) and the Housing (Tenancy Deposits) (Prescribed Information) Order 2007. It was common ground that the tenant had not been given any information other than that contained in the My deposits.co.uk literature and the tenancy agreement. In a possession claim, at first instance, District Judge Gerlis applied what he called a "purposive approach" and decided that, so long as the deposit had been put into a scheme by the landlord, the lack of the prescribed information did not prevent a landlord from seeking possession by using a HA 1988 s21 notice. He therefore made an order for possession and dismissed the tenant's counterclaim for three times the deposit. The tenant appealed. Allowing the appeal, HHJ McMullen Q.C. found that as the statutory framework was clear, a purposive approach to the legislation was not necessary. He also stated that had a purposive approach been necessary, he would have found that the purpose of the regulations was to protect a tenant when a landlord disappeared after taking a deposit. The tenancy deposit scheme certificate in this case said on its face that it did not provide all of the information required by the regulations. The tenancy agreement was an "archaic" document which had been drafted before the introduction of tenancy deposit legislation and did not comply with the regulations. He therefore found that a s21 notice could not be relied upon until the information in the regulations had been provided to the tenant. He set aside the possession order and allowed the counterclaim for three times the deposit. He held that the court had no discretion in the matter if the regulations had not been complied with.

Beal v McCartney Plymouth County Court, 12 March 2008 On 1 March 2008, Ms McCartney granted Mr Beal a six- month fixed-term assured shorthold tenancy. Mr Beal paid a deposit of £550. The tenancy agreement stated that: ‘The deposit £550.00 … will be registered with one of the government authorised tenancy deposit schemes (the “Tenancy Deposit Scheme”) in accordance with the Tenancy Deposit Scheme Rules’. Mr Beal received no details of the scheme into which the deposit was paid. On 13 September 2008, Mr Beal received a letter from NatWest Bank addressed to ‘the occupier’ advising that a warrant for eviction was being applied for (as a result of his landlord’s mortgage arrears). On 15 October, he received a letter from solicitors advising that the date of eviction would be 22 October. On that date, he was evicted. Ms McCartney did not respond to a letter before claim requesting return of the deposit and three times the amount in compensation. At a hearing of his subsequent county court claim, Deputy District Judge Challans stated that it was ‘quite clear’ that in accordance with HA 2004 s214(3) the court must award three times the deposit amount and that ‘it is very silly of landlords if they don’t take notice’. He also awarded the return of the original deposit. Regarding the breach of quiet enjoyment, he awarded £500 damages. Da Costa v Pinter Bromley County Court, April 2009 The claimants were assured shorthold tenants of a flat. The tenancy agreement provided for a rent of £1,950 a month and stated: ‘Payment required in advance of £4,200’. After the claimants left in December 2007, by amended Particulars of Claim, they sought the return of a deposit of £2,250 and the additional sum of £6,750 under HA 2004 s214(4). In July 2008, after the issue of proceedings, the sum of £2,250 was placed in an authorised tenancy deposit scheme. District Judge Burn was satisfied that the £2,250 paid in autumn 2007 was a deposit. The agent’s own invoice described it as such. There was accordingly a breach of s213 since the deposit was not paid into a recognised tenancy deposit scheme within 14 days of receipt. She was satisfied that there was non-compliance with the ‘initial requirements’ of a tenancy deposit scheme (s214(1)(a) and s214(2)(a)). The ss213 and 214 remedies applied. She gave judgment for the sums of £2,250 and £6,750. She stated: The purpose of the Act is to try to ensure that landlords secure tenancy deposits in a recognised deposit scheme at the start of the tenancy, so that the deposit can be returned to tenants quickly when the tenancy ends, and that disputes about the deposit can be resolved under the schemes’ procedures without the need for court proceedings. Landlords who describe a deposit as something else, who do not secure it promptly in a deposit scheme as required by the Act, then fail to return the deposit when the tenant leaves (especially if this is without good cause, thereby forcing the tenant to start court proceedings to recover the money) but who then at the last minute after the tenant issues proceedings, pay the deposit into a scheme, are clearly flouting the spirit of the legislation and, on my interpretation, the letter also. If the s213 and s214 remedies are not applied in a case such as the instant one, the Act would be rendered virtually toothless when landlords flout its provisions. N.B. it is unlikely that the same decision would be reached post Hashemi v Gladehurst Properties Limited and Vision Enterprises Ltd (t/a Universal Estates) v Tiensia. Davies and Davies v Schofield Clerkenwell and Shoreditch County Court, 7 January 2011 In 2006, Mr Schofield moved into a room in a house owned by the claimants. He paid a deposit of £350 to the outgoing occupant and after the claimants learnt of his arrival was treated by them as having had his predecessor’s rights in a deposit paid to the claimants transferred to him. He paid rent of £350 per month. In November 2006, after expiry of an earlier joint assured shorthold tenancy, he and the other three occupants of the house entered into a joint assured shorthold tenancy for a term of one year at a rent of £1500 per month. By the expiry of that term, he was the only one of the four joint tenants still living in the house. In May 2008, Mr Schofield and three new occupants signed a new joint assured shorthold tenancy at a rent of £1600 per month. The deposit was expressed to be £1600, but Mr Schofield paid no additional sum as a deposit. During the course of this tenancy Mr Schofield, who was claiming housing benefit, became erratic in payment of his share of the rent and arrears accrued. The claimants sought possession, inter alia, pursuant to a notice served under Housing Act 1988 s21. The other tenants moved out. Mr Schofield defended and counterclaimed relying on Housing Act 2004 ss213 to 215. The landlords had initially failed to comply with these provisions, but on 8 April 2009, after the possession claim had been issued, paid various sums totaling £1550 to Deposit Protection Services. They included £350 in respect of Mr Schofield’s deposit. The landlords then served a further s21 notice. Following the Court of Appeal decision in Vision Enterprises Ltd (t/a Universal Estates) v Tiensia [2010] EWCA Civ 1224; 11 November 2010, January 2011 Legal Action 35 counsel agreed that (i) if a landlord has protected a deposit by the date of the hearing, no sanction is applicable; (ii) if the landlord has protected the deposit before serving a s21 notice, the s21 notice is valid; (iii) a failure to do either within 14 days does not prevent the landlord from rectifying the situation; and (iv) if the landlord only remedies the situation by the date of the hearing, tenants ordinarily recover their costs. HHJ Cryan found that notwithstanding the May 2008 agreement, the intention of the parties was that Mr Schofield would pay rent of £375, but by way of concession it would remain £350 until September 2008. His deposit was to be £375, but all that was paid was the sum of £350 carried over. He found that Mr Schofield had a tenancy of a single room, rather than a joint tenancy of the whole house. In view of this, the deposit had been protected by the time of service of the second s21 notice. That notice was valid because all sums held by the landlords as deposits had been paid into the protection scheme. HHJ Cryan dismissed the counterclaim and made an order for possession. Delicata v Sandberg Central London County Court, 2 June 2009 On 16 July 2007, Ms Sandberg was granted a 12-month assured shorthold tenancy. She paid a deposit of £660, but it was not protected under an authorised tenancy deposit scheme until August 2007. The landlords served a notice under HA 1988 s21 on the day that the tenancy agreement was issued. On 11 April 2008, Ms Sandberg was sent to prison. Beforehand, she notified the landlords about this. They agreed that she could sublet while she was away. While she was in prison, she spoke by telephone on several occasions to the landlords and their agents. Without warning her, in July 2008 they began accelerated possession proceedings relying on the s21 notice served at the start of the tenancy. Ms Sandberg was not served with the proceedings in prison. A possession order was obtained in September 2008. A warrant of possession was executed on 28 April 2009. Ms Sandberg returned to the premises on 4 May 2009. The landlords applied for a warrant of restitution to remove her from the premises. She applied to set aside the possession order and the warrants. District Judge Avent accepted her argument that the possession order, the warrant of possession and the warrant of restitution should be set aside. The s21 notice should not have been relied on because it was invalid. It had been served well before the deposit had been protected under a deposit scheme (HA 2004 s215(1)). Ferguson v Jones Birmingham County Court, 5 November 2008 Ms Jones was an assured shorthold tenant. She paid a deposit of £500, but her landlord failed to put it into an authorised tenancy deposit scheme within 14 days of receiving it, as required by HA 2004 s213(3) and (4). The deposit was only placed into an appropriate scheme after the landlord had commenced possession proceedings and after Ms Jones had counterclaimed for disrepair. She claimed for three times the value of her £500 deposit under s214(2) and (3). District Judge Sheldrake held that the court had no discretion under s214(4) and had to order the landlord to pay three times the deposit. The statutory provisions would be otiose if the landlord could escape the penalty in s214(4) by placing the deposit in an authorised scheme after the 14-day period. To have interpreted s214(4) in any other way would have been contrary to parliament’s intention. Forster v Hopper Consett County Court; 1 June 2011 Ms Forster was the owner of a house which she let in July 2009 to Ms Hopper. The tenant paid a deposit of £495 to a letting agent. She lived in the property until June 2010. At the end of the tenancy Ms Forster, Ms Hopper and Ms Hopper’s mother inspected the property and agreed that £361.75p would be deducted for damage to the property. Ms Forster’s later sued, claiming that the deductions from the deposit were unreasonable and that there had been no compliance with the tenancy deposit provisions of Housing Act 2004. After the issue of proceedings, the parties reached a compromise that £164 would be paid to Ms Forster and that Ms Hopper would withhold the remaining amount of £197.75 for the damage to her property. An agreement was signed and a cheque was sent to Ms Forster. At trial, it was argued that no s214(4) claim could be pursued because the deposit had been returned. District Judge Howard accepted the defendant’s argument that the deposit had been returned in full even though the ‘entire’ deposit had not been returned, because an agreement had been reached under which Ms Forster had agreed to accept a lesser amount. (Green v Sinclair Investments Ltd September 2010 Legal Action 37 and Soens-Hughes v Lewis March 2011 Legal Action 26) FN Peter Thubron, Solicitors, Tyne and Wear, Lewis Kerr, barrister. Green v Sinclair Investments Ltd Clerkenwell and Shoreditch County Court, 11 June 2010 In December 2008, the defendant let a property to the claimant on an assured shorthold tenancy for a fixed term of one year. The claimant paid a deposit of £2,100. The defendant did not deal with the deposit in accordance with the Housing Act 2004 provisions at any time. The tenancy ended by surrender in July 2009. The claimant sent a letter of claim in September 2009 for the return of the deposit and the payment of a sum equal to three times the deposit pursuant to Housing Act 2004 s214. In response, the defendant sent a cheque for the full deposit to the claimant’s solicitors. The cheque was received by the solicitors just after the claim was issued on 27 October 2009, but before it was served. The solicitors refused to accept the cheque, and returned it to the defendant. The defendant paid the monies into the claimant’s bank account in February 2010. This payment was accepted by the claimant. The defendant argued that the court could not make any order under s214(3), either for the return of the deposit or for its protection, because the tenancy had ended and the deposit had been repaid in full. It claimed that, the court could not make an order for payment of three times the deposit under s214(4), because a subsection (4) order can only be made in addition to a subsection (3) order, and not on its own. District Judge Manners accepted this submission and dismissed the claim. After referring to Draycott v Hannells Letting Ltd [2010] EWHC 217 QB, April 2010 Legal Action 25, she said “In my judgment, if breach of the requirements of section 213 can be remedied by late protection of the deposit and compliance with the information provisions of that section, it can also be remedied by repayment of the whole of the deposit. … as the whole of the deposit has now been returned the court is unable to make an order under section 214(3) (a) or (b) and is consequently not able to make an order for payment of three times the deposit under section 214(4).” Harvey v Bamforth Sheffield County Court, 8 August 2008 Mr Bamforth was the assured shorthold tenant of a property owned by Ms Harvey. A deposit was paid to Ms Harvey via her letting agents. The deposit was lodged with The Dispute Service within 14 days of the start of the tenancy. Rent arrears began to accumulate and, in January 2008, possession proceedings were issued. The proceedings were defended on the basis that the prescribed information about the deposit scheme had not been provided (HA 2004 s213(5) and (6)). It was accepted by the landlord that the prescribed information had not been provided within the time specified in s213(5) and (6), but she said that it had been provided at a later date. Mr Bamforth then made an application for the return of his deposit and for damages of three times the value of the deposit. His application was heard by a deputy district judge who ordered that the deposit be returned under s214(3)(b) and ordered damages of three times the value of the deposit under s214(4). Both sums were set off against agreed rent arrears. Ms Harvey appealed both the order for the return of the deposit and the damages award, arguing that the power to order the return of a deposit and damages under s214(3) and (4) only arose if the court was satisfied that s213(6)(a) had not been satisfied. She said that compliance with s213(6)(b) was irrelevant for these purposes. HHJ Bullimore accepted this argument and allowed the appeal. In his judgment, [t]he failure on the landlord’s part was not that ‘the prescribed information was not given’ but that it was not given within the fourteen days. The district judge … took the view that [s213(6)(a) and 213(6)(b)] were so closely connected that they only made sense if they were read together but I think that was an error. I think that the draftsman in dealing with proceedings relating to tenancy deposits in section 214 was very clear in differentiating between the requirements of giving information and giving the information after a specified period. Accordingly, as the information had been given before the tenant made his application, the application should have failed.

Ireland v Norton Brighton County Court, 17 May 2012 Mr Ireland let the flat of which he was a housing association tenant to Mr Norton and another jointly. A deposit of £800 was paid by Mr Norton’s stepfather. In a possession claim, Mr Norton counterclaimed for the return of the deposit and for an order that he be paid a sum equal to three times the amount of the deposit. The Friday before the trial, LA s184 came into force so that the court had a discretion whether or not to order payment of between one and three times the amount of the deposit. Transitional provisions gave landlords of current tenancies 30 days to comply. If they did not, the provision remained mandatory. HHJ Simpkiss adjourned the counterclaim to give Mr Ireland the opportunity to comply. He did not do so. At the resumed hearing, it was noted thatvthe other joint tenant had left the flat before the proceedings began. He had not joined in the counterclaim and contact with him had been lost. It was suggested that Gladehurst Properties Ltd v Hashemi [2011] EWCA Civ 604 was authority for the proposition that ‘where there is more than one tenant, the claim must be advanced by them all jointly and cannot be brought by one of the joint tenants unilaterally’. However, after being referred to CPR r19.3 which provides: ‘Where a claimant claims a remedy to which some other person is jointly entitled with him, all persons jointly entitled to the remedy must be parties unless the court orders otherwise’, HHJ Simpkiss made an order that the joint tenant was not required to be a party for the purposes of the deposit counterclaim and ordered Mr Ireland to pay Mr Norton three times the deposit.

Lappin v Surace Romford County Court, 13 June 2012 On 20 April 2009, Mr Lappin granted Ms Surace an assured shorthold tenancy for a fixed term of 12 months, expiring on 19 April 2010. No subsequent fixed-term tenancies were granted. On the same day that he granted the tenancy, Mr Lappin served a HA 1988 s21 notice. Ms Surace paid a deposit of £1,500 which Mr Lappin arranged to protect. However, he did not serve her with any of the prescribed information relating to the protection of the deposit (HA 2004 s213(5) and (6) and the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 SI No 797). After 19 April 2010, Ms Surace continued to occupy the premises as a statutory monthly periodic tenant. Mr Lappin served two more section 21 notices, relating to periodic tenancies (HA 1988 s21(4)). Each notice ended on the last day of a month (28 February 2011 and 31 October 2011). The notices did not contain any savings clause. Deputy District Judge Oldham made a possession order. Without taking sworn evidence, he found that the deposit was protected and that it was not relevant whether or not Ms Surace knew that it was protected. He also found that the rent was due on the first of each month and so the statutory periodic tenancy expired on the last day of each month. The two section 21 notices were accordingly valid. HHJ Wulwik allowed Ms Surace’s appeal. He held that Mr Lappin could not rely on the 20 April 2009 section 21 notice because no prescribed information had been served at that date. The district judge had wholly failed to deal with the question of whether or not Ms Surace had been supplied with the relevant prescribed information and, if so, on what date. He also held that there was no conceptual difficulty in requiring a tenant to pay rent on the first day of each month while the tenancy started on the 20th day of each month and ended on the 19th day of each month (Salford City Council v Garner [2004] EWCA Civ 364; [2004] HLR 35, CA). The notices should have specified the last day of the period of the tenancy. Neither of the section 21 notices did that because the last day was the 19th of each month. Both the notices were invalid. HHJ Wulwik dismissed the claim for possession.

O’Brien v Hill Edmonton County Court, 9 September 2009 Mr O’Brien granted Mr Hill an assured shorthold tenancy for a fixed term of 12 months starting on 9 June 2008. The agreement recorded: “Deposit is £700” against which was a note: “Paid by and repayable to Barnet Council.” On 12 June 2008, the landlord served a notice under HA 1988 s21. On 2 July 2008, the landlord received the payment of the deposit from a third party, Barnet LBC, which had previously agreed to pay the tenant’s deposit. The landlord registered the deposit with the Deposit Protection Service (DPS) on 7 July 2008. Later in June 2009, he issued a possession claim under the accelerated procedure relying on the s21 notice served on 12 June 2008. The DPS deposit summary attached to the Claim Form stated "Deposit paid 7/7/08”; this being the date it was paid to DPS. On the face of it, therefore, the deposit was paid with the Agreement and not paid into the DPS until after service of the s21 notice. Accordingly, District Judge Silverman, on that evidence, struck out the claim but gave the claimant permission to restore the claim if he thought that the order should not have been made. The claimant’s solicitors wrote in response with evidence from Barnet LBC that the deposit was paid by them on 2 July 2008. They argued that s213 did not apply because, at the time that the s21 notice was served (i.e., 12 June 2008), the landlord had not yet received the deposit from Barnet and therefore he was unable to protect the deposit with an authorised scheme. The landlord argued that the s21 notice must therefore be valid and requested that a possession order be made. On the basis of the evidence provided by the claimant’s solicitors District Judge Silverman made a possession order without a hearing since it was clear the deposit was paid to DPS within 14 days of receipt and was not paid when the agreement was made or the s21 notice was served. Note: if the landlord’s solicitors had in the first place provided the evidence regarding receipt of the deposit monies after service of the s21 notice and clarified that “paid by …Barnet Council” did not mean the deposit had been paid at that date, there would not have been any problem in making a possession order when District Judge Silverman initially considered the papers.

O’Brien v Jones Northampton County Court; 12 February 2010 In June 2008, Mrs Jones granted Mrs O’Brien an assured shorthold tenancy. At the same time as signing the tenancy agreement, Mrs O’Brien was given a document headed “Prescribed Information Housing Act 2004”. Mrs O’Brien paid a deposit to the landlord’s agent who registered it with The Dispute Service (TDS) within 14 days. TDS issued a certificate confirming that the deposit had been protected. The certificate did not include the landlord’s name and address. However, the tenancy agreement gave the landlord’s address for service as that of the agent and the phone number of the agent appeared on the inventory. Mrs O’Brien argued that this did not comply with Housing (Tenants Deposits)(Prescribed Information) Order 2007 which requires provision of “(g) the following information in connection with the tenancy in respect of which the deposit has been paid – (iii) the name, address, telephone number, and any e-mail address or fax number of the landlord”. She appears to have claimed three times the amount of the deposit in accordance with s214. The tenancy came to an end by mutual agreement in December 2008 District Judge Watson found that there was no failure to provide the prescribed information by failing to give the landlord’s home address or telephone number. Even if there had been a breach by providing the agent’s address and phone number, it had been remedied before the application had been made. In any event, the judge did not interpret the Regulations as requiring the giving of the landlord’s residential address. He dismissed the claim. (See too Harvey v Barnforth, Sheffield County Court, 8 August 2008, November 2008 Legal Action 18.)

Piggott v Slaven Great Grimsby County Court, 23 February 2009 In April 2005, Mr Piggott granted Ms Slaven a tenancy of a house. She paid him a deposit of £600. On 14 February 2008, Mr Piggott granted Ms Slaven an assured shorthold tenancy of a different property, for an initial fixed term of six months. Of the deposit for the earlier premises, £75 was returned to Ms Slaven. The balance of £525 was retained by Mr Piggott. He said that £105 was for the first week’s rent under the new tenancy, and the remaining £420 was ‘rent in advance’. On 24 June 2008, he served a s21 notice, stating that he required possession on 27 August 2008. Ms Slaven defended the possession claim which Mr Piggott subsequently issued, stating that he had failed to comply with HA 2004 s213(1) (deposit to be dealt with in accordance with an authorised scheme) or s213(4) (initial requirements of a tenancy deposit scheme) and so, according to s215(1), was not entitled to serve a s21 notice. She also counterclaimed for an order that he pay her three times the amount of the deposit in accordance with s214(4). After referring to s212(8), District Judge Richardson held that the question of whether or not money is to be held as security is to be judged objectively. It would be contrary to the purpose of the Act to allow landlords to avoid its consequences by stating that they personally did not intend to hold money as a security. He found that the sum of £420 was not paid as rent in advance, but was intended to afford Mr Piggott security should Ms Slaven breach any future obligations to pay rent under the tenancy agreement. It was accordingly a ‘tenancy deposit’ for the purposes of s212(8). It had not been dealt with in accordance with an authorised scheme, as required by s213. He dismissed the possession claim and ordered Mr Piggott to pay £1,260 within 14 days.

Qurat-Ul-Ain-Zia v Mourtada Central London County Court; 9 February 2010 Mrs Qurat-Ul-Ain-Zia granted Mr Mourtada a series of assured shorthold tenancies. The last was granted on 6 December 2008 for a term of one year. The tenancy agreement stated “Deposit £1,400 (already held).” It was to be held by Mrs Qurat-Ul-Ain-Zia “without interest for the term … and the deposit or the balance thereof shall be returned on the expiry of the term.” She did not provide a deposit protection certificate within the 14 day period provided for in s213(3). A certificate was sent by fax on 14 October 2009 – i.e. over ten months after the commencement of the term. Mrs Qurat-Ul-Ain-Zia claimed possession, relying on Housing Act 1988 Schedule 2, Grounds 10 and 11 (rent arrears). Mr Mourtada counterclaimed, arguing that he was entitled to set off against the arrears “compensation under the provisions of sections 212 to 215”. At the hearing of the possession claim on 17 November 2009, it was agreed that the arrears were £3,123. Mrs Qurat-Ul-Ain-Zia argued that the deposit was not received at the commencement of the tenancy on 6 December 2008, but had been received on or near the commencement of the first assured shorthold tenancy in 2005 or 2006 and so was not subject to the statutory scheme Recorder Talbot QC rejected this argument. He held that “with effect from 6 April 2007 (when … the statutory scheme under the 2004 Act came into force) any deposit moneys used by or on behalf of the Claimant as deposits under the successive, separate shorthold tenancies … were “received” by the claimant on the commencement of each such tenancy and had to be dealt with strictly in accordance with that scheme, and, in particular, with section 213.” When the December 2008 tenancy agreement came into force, the deposit of £1400 had to be dealt with under the statutory scheme. He dismissed the possession claim and entered judgment on the counterclaim for the sum that now represented the balance due from Mrs Qurat-Ul-Ain-Zia after the agreed rent arrears were set off against “the triple statutory compensation of £4,200 payable under s214(4).

Saad v Hogan Brentford County Court, 16 February 2009 In November 2005, Mr Saad granted Ms Hogan an assured shorthold tenancy for one year at a rent of £1,000 per month. Ms Hogan paid a deposit of £1,000. The tenancy deposit provisions of HA 2004 ss212–214 came into force in April 2007. In November 2007, Mr Saad granted Ms Hogan a further one-year tenancy. The new tenancy agreement provided for payment of a deposit of £1,000, but no new deposit was physically handed over; the landlord retained the deposit originally paid. In June 2008, the landlord served a HA 1988 s8 notice relying on arrears of rent. Ms Hogan defended on the basis that the landlord had failed to protect her deposit and that she wished any compensation to be set off against the rent arrears. By the date of the possession hearing, four months’ rent were unpaid. District Judge Rowley found that Mr Saad was under no obligation to protect the deposit because no money was paid over under the 2007 agreement. She made a possession order under HA 1988 Sch 2 Part 1 Ground 8. Ms Hogan appealed. HHJ Oppenheimer noted that ‘extraordinarily’ there were no transitional provisions to provide for the situation where a deposit was not physically paid over because money was retained under an earlier agreement. ‘The draftsman … has lamentably failed to deal with this obvious point.’ In the absence of guidance in the legislation, he adopted a purposive construction. Having regard to s212, ‘the purpose of the statutory provisions is very clear, namely to safeguard such deposits and to facilitate the resolution of disputes’. In one respect, there had been a payment by the tenant under the 2007 agreement even though there was no physical or electronic transfer of money. He allowed the appeal and stated that Mr Saad was liable to pay £3,000, subject to set off, for failure to protect the deposit. Seghier v Rollings Bow County Court, 6 March 2009 In May 2007, Ms Rollings granted Mr Seghier an assured shorthold tenancy of a one bedroom flat. He paid a deposit to her agent at some point before he signed the tenancy agreement. Ms Rollings was unaware of the existence of the tenancy deposit scheme and made no efforts to comply with its statutory requirements (HA 2004 s213) until shortly before a court appearance in June 2008. Then, she brought the certificate of deposit to court and, on the suggestion of the judge, gave a copy of it to Mr Seghier. However, it was not signed by Ms Rollings; Mr Seghier was not provided with a copy of the Tenancy deposit solutions leaflet; and Ms Rollings did not provide any information about the applicable procedures if either the landlord or tenant were not contactable at the end of the tenancy (see the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 SI No 797). At the date of trial, the prescribed information had still not been given to Mr Seghier. Mr Seghier sought an order that Ms Rollings either repay the deposit or pay it into a designated account held by the scheme administrator and pay Mr Seghier a sum equivalent to three times the amount of the deposit (HA 2004 s214). HHJ Redgrave distinguished Harvey v Bamforth Sheffield County Court, 8 August 2008; November 2008 Legal Action 18 because in this case, Ms Rollings had still not complied with s213(6)(a). She concluded that the phrase ‘as it thinks fit’ contained in s214(3) meant that the court must choose either to order the return of the deposit under s214(3)(a) or order the money to be held in a designated account held by the scheme administrator under s214(3)(b). She ordered Ms Rollings to pay £2,780 (the deposit plus a sum equal to three times this figure) to Mr Seghier within l4 days. Soens-Hughes v Lewis West London County Court, 21 December 2010 On 30 May 2008, Ms Lewis granted an assured shorthold tenancy to Mr Soens-Hughes for a fixed term of one year commencing on 31 May 2008. Mr Soens-Hughes paid a deposit of £1,680 in May 2008. Ms Lewis believed that her letting agent had protected the deposit in accordance with the provisions of the HA 2004, but she subsequently discovered that this had not been done. At no time was the deposit protected in accordance with the Act. On 30 May 2009, Mr Soens-Hughes vacated the property and the tenancy ended. In July 2009, Ms Lewis returned £1,550 of the deposit to Mr Soens-Hughes, retaining £130 in respect of a check-out inspection fee and some cleaning and repair osts. On 13 January 2010, Mr Soens-Hughes issued a claim for £5,040, being a sum three times the original deposit, under HA 2004 s214(3) and (4). On 6 December 2010, the day before the final hearing of the claim, Ms Lewis’s solicitors transferred £130 to the bank account of Mr Soens- Hughes’s solicitors. By this payment, Ms Lewis had repaid all of the deposit to Mr Soens-Hughes. DJ Nicholson dismissed the claim. It was not possible for the court to make an order in accordance with s214(3)(a) or (b), because at the date of the hearing no one was holding the deposit, and therefore there was no deposit that could be paid back or paid into the custodial scheme. Furthermore, there was no extant tenancy between the parties in respect of which a tenancy deposit could be paid and which would require protection. He said ‘late compliance is compliance’ (see Tiensia v Vision Enterprises Ltd (t/a Universal Estates) [2010] EWCA Civ 1224 and Draycott and Draycott v Hannells Letting Ltd [2010] EWHC 217 (QB); [2010] HLR 27). DJ Nicholson endorsed the reasoning of DJ Manners in Green v Sinclair Investments Ltd, Clerkenwell and Shoreditch County Court, 11 June 2010; September 2010 Legal Action 37.

Shepley v Yassen Tameside County Court, 13 January 2011 In November 2007, the tenant was granted a 12-month assured shorthold tenancy. It was renewed for a further 12 months on expiry, and then continued on a periodic basis until February 2010 when the tenant vacated the premises and the tenancy came to an end. The tenant was informed that most of her deposit would be retained and after taking advice sent a letter before action in early April 2010 for a failure to protect the deposit. No response was received. Some three months after the issue of court proceedings, the deposit was finally protected. However, none of the prescribed information was ever served on the tenant. District Judge Stockton found that the deposit had not been protected at the time the tenancy ended. He followed the same line of reasoning as District Judge Godwin in Woods v Harrington Haverfordwest County Court; August 2009 Legal Action 35 and held that protection after the end of the tenancy was not acceptable. He distinguished Draycott v Hannells Letting Limited [2010] EWHC 217 (QB); [2010] L&TR 12 and Tiensia v Vision Enterprises Ltd (t/a Universal Estates) [2010] EWCA Civ 1224, on the basis that they were concerned with deposits that had been protected late but were still placed into schemes before the tenancy ended. N.B. it is unlikely that the same decision would be reached post Hashemi v Gladehurst Properties Limited and Vision Enterprises Ltd (t/a Universal Estates) v Tiensia.

Stankova v Glassonbury Gloucester County Court, 10 March 2008 Ms Stankova and her daughter became assured shorthold tenants in August 2007. They paid a deposit of £600 to their landlord, Mr Glassonbury, before moving in. However, he failed to comply with the requirements of HA 2004 s213 which provides that the landlord must comply with the ‘initial requirements’ of an authorised tenancy deposit scheme within 14 days. Those requirements include protecting the deposit and providing the tenant with information relating to the scheme within 14 days. In November 2007, Mr Glassonbury served a HA 1988 s21 notice and the tenants moved out in February 2008. Ms Stankova made a claim in the county court against Mr Glassonbury for his failure to notify her within 14 days of how he would deal with the deposit and which scheme he was using. District Judge Singleton expressed his concern that ‘it goes against the grain’ to make the order sought, but held that the legislation gave the court no discretion. He ordered Mr Glassonbury to pay £1,800 and a £75 court fee. N.B. it is unlikely that the same decision would be reached post Hashemi v Gladehurst Properties Limited and Vision Enterprises Ltd (t/a Universal Estates) v Tiensia.

Woods v Harrington Haverfordwest County Court, 19 May 2009 Ms Harrington granted Ms Woods an assured shorthold tenancy for 12 months from 1 May 2008. The tenancy agreement provided for payment of a deposit of £600 as ‘security for faithful performance … of all the terms of this lease’. The deposit was not paid into any authorised scheme. During the term of the tenancy, Ms Harrington agreed to accept notice to terminate the tenancy early. As a result, Ms Woods delivered up possession of the property on 7 March. Ms Harrington did not return the deposit. On 13 March, without any prior warning, Ms Woods began proceedings seeking return of the deposit. Ms Harrington defended the proceedings, alleging that Ms Woods had caused damage to the property, but, in April 2009, paid the deposit into an authorised scheme. District Judge Godwin noted that: ‘As a matter of fact, [it was] undoubtedly correct that … at no time during the existence of the tenancy agreement, did [Ms Harrington] take action to comply with the requirements of Housing Act 2004 s213.’ Both parties agreed that the tenancy was terminated before Ms Harrington took any action to place the deposit in an authorised scheme. District Judge Godwin concluded that the payment was made in ‘the hope of avoiding the repercussions of not doing so as set out in [s214] … [S]uch action is not only contrary to the letter of the law but is also contrary to the spirit of the law and the public policy considerations that parliament was seeking to enhance when introducing the legislation’. It could not have been intended that a landlord could completely ignore the legislation during the subsistence of the tenancy and then, after the tenancy has been terminated, place the deposit with an authorised scheme and thereby avoid any order being made by the court under s214(3) and (4). Ms Woods was entitled to the return of the deposit and £1,800 (being three times the deposit) under s214(4). District Judge Godwin gave directions for the hearing of the landlord’s counterclaim N.B. it is unlikely that the same decision would be reached post Hashemi v Gladehurst Properties Limited and Vision Enterprises Ltd (t/a Universal Estates) v Tiensia.