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A review of s.184 Localism Act 2011 & Tenancy Deposit (9 August 2012)

Date: 09/08/2012
Duncan Lewis, Housing Solicitors, A review of s.184 Localism Act 2011 & Tenancy Deposit

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:

  • Being prevented from relying on service of s21 Notice for recovering possession

  • Being required to pay a penalty of three times the value of the deposit, in addition to the deposit being paid to the tenant or into a custodial scheme.


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.



  • The deposit must now be protected and prescribed information issued within 30 days of receipt of deposit instead of the previous period of 14 days.

  • The tenant can now pursue the landlord if the deposit is not protected within 30 days and even if the deposit is protected after 30 days, in retrospective compliance

  • If a landlord fails to protect the deposit, or to send the statutory information relating to its’ protection within the 30 day period, then the Court must award compensation. Compensation will now be a figure between the one and three times the value of the deposit. The amount to be awarded is at the discretion of the judge.

  • If the deposit is not protected 30 days of receipt a Section 21 Notice may not be RELIED UPON TO RECOVER POSSESSION (unless the deposit is returned in full or in part with deductions being agreed by both parties)

  • A claim can be bought for a penalty award even where the tenancy has ended.


All Landlords should ensure that they comply with the requirements in relation to tenancy deposits as there is now no defence for non-compliance.


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