The Claimant entered into a tenancy in 2020 with the Defendant for a luxury property in Hertfordshire. A deposit was paid in the sum of £10,730 and was not protected, by the Landlord Darren Andrews Group Limited, until 320 days after the deposit was taken.
The Claimant left the property in May 2022 and the tenancy ended with the deposit still not having been protected.
Proceedings were issued for an award under s214(4) Housing Act 2004.
Deposit protection and prescribed information
Section 213 Housing Act 2004 (the ‘Act’), as amended, provides that:
“(1) Any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme.
(2) No person may require the payment of a tenancy deposit in connection with a shorthold tenancy which is not to be subject to the requirement in subsection (1).
(3) Where a landlord receives a tenancy deposit in connection with a shorthold tenancy, the initial requirements of an authorised scheme must be complied with by the landlord in relation to the deposit within the period of [30] days beginning with the date on which it is received.
(4) For the purposes of this section “the initial requirements” of an authorised scheme are such requirements imposed by the scheme as fall to be complied with by a landlord on receiving such a tenancy deposit.
(5) A landlord who has received such a tenancy deposit must give the tenant and any relevant person such information relating to:
(a) the authorised scheme applying to the deposit,
(b) compliance by the landlord with the initial requirements of the scheme in relation to the deposit,
and
(c) the operation of provisions of this Chapter in relation to the deposit,
as may be prescribed.
(6) The information required by subsection (5) must be given to the tenant and any relevant person:
(a) in the prescribed form or in a form substantially to the same effect, and
(b) within the period of [30] days beginning with the date on which the deposit is received by the landlord.”
Deposit Compensation
S214 provides:
“(1) Where a tenancy deposit has been paid in connection with a shorthold tenancy [on or after 6 April 2007], the tenant or any relevant person (as defined by section 213(10)) may make an application to [the county court] on the grounds—
[(a) that section 213(3) or (6) has not been complied with in relation to the deposit, or]
(b) that he has been notified by the landlord that a particular authorised scheme applies to the deposit but has been unable to obtain confirmation from the scheme administrator that the deposit is being held in accordance with the scheme.
[(1A) Subsection (1) also applies in a case where the tenancy has ended, and in such a case the reference in subsection (1) to the tenant is to a person who was a tenant under the tenancy.]
(4) The court must . . . order the landlord to pay to the applicant a sum of money [not less than the amount of the deposit and not more than] three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order.”
The Defendant Landlord at a hearing in May 2023, admitted to their failure to protect the Claimants deposit and Judgment for the Claimant was appropriately entered by the Judge with the damages to be assessed at a further hearing. The Defendant advised the court that they wanted to bring a counter claim and the Judge ordered that the counterclaim be served by the Defendant and the appropriate fee be paid and if it was not then the counterclaim would be struck out. The claim was allocated to the Fast Track and directions given and a trial date allocated.
The Defendant failed to pay the fee as their cheque was returned unpaid and the counterclaim therefore was struck out.
The Defendant applied for relief from sanctions and the reinstatement of the counter claim. This application was successful on condition that the Defendant pay the counter claim fee.
Having been given a second bite of the cherry the Defendant again failed to pay the counter claim fee and therefore the counter claim remained struck out.
The day before the trial the defendant emailed the Claimants Solicitor, and we later found out, the Court, to advise that his business partner had passed away and he was not able to attend the trial.
At the trial the court proceeded with the claim as the Defendant had failed to comply with the previous directions as well as failing to provide any application to adjourn the trial with accompanying statement to the court.
The exercise of the Court is to determine the culpability of the Defendant in failing to protect the deposit in accordance with the statutory regime.
It was suggested by the Claimant that the Defendant was an experienced landlord and fully aware of the need to protect deposits. It was noted that the tenancy agreement itself expressly referred to the need and mechanism for protection of the deposit and so there could be no excuse from the Defendant of not being aware of their obligations.
The Judge held that as a professional landlord the Defendant knew that deposit needed to be protected and they had offered no explanation for the delay. The fact that the Defendant was having financial difficulties was an aggravating factor.
The Claimant was successful in recovering an award of 2.5 times the deposit, beating their Part 36 offer, and obtained judgment of £34,800 and recovered costs of £22,000.
Counsel for the Claimant was Jonathan Holsgrove of Park Square Barristers instructed by Phoenix Solicitors
If you are a tenant and your deposit has not been protected by your landlord or agent then get in touch with our specialist team today.
A link to Mr Holsgrove’s write up of the case can be found here.
Written by Alisha Butler – Solicitor Advocate and Director of Phoenix Solicitors.