By Omur Clayton
The Tenancy Deposit Protection was introduced on 6th April 2007 by the Housing Act 2004. Landlords had to ensure that any deposit paid by a tenant pursuant to an assured shorthold tenancy was placed in a Tenancy Deposit Scheme.
Sanctions for non-compliance with the requirements of the legislation included:
Whilst it became clear that landlords were no longer able to rely on s21 to recover possession against an assured shorthold tenant it became less clear that sanctions would apply for non compliance with the requirements of the legislation.
In Tiensia -v- Vision Enterprises [2010] EWCA Civ 1224, the Court of Appeal ordered that a Court could not order that a landlord was obliged to pay the penalty of three times the deposit in circumstances where he had paid the deposit into a Tenancy Deposit Scheme in advance of the hearing.
In Gladehurst Properties Limited –v- Hasheni [2011] EWCA Civ 604, the Court of Appeal held that a tenant could not bring a claim for a deposit once his tenancy had come to an end.
Following these Court of Appeal decisions tenants were unable to bring a case for breach of the legislation after their tenancy had ended and if despite having gone to the expense of issuing a claim against their landlord, the monies were protected prior to the court hearing.
Bothe these cases seemed to have helped landlord’s avoid the sanctions anticipated by the legislation.
Section 184 of the Localism Act 2011 reverses these decisions. The changes came into effect on 6 April 2012.
All Landlords should ensure that they comply with the requirements in relation to tenancy deposits as there is now no defence for non-compliance.