Tenancy Deposit Scheme

Tenancy Deposit Scheme – Court Opts for Leniency

The Housing Act 2004 contains provisions for the protection of tenants’ deposits in England and Wales.

Tenancy deposit protection schemes were introduced in 2007 to protect residential tenants from unscrupulous landlords who would retain their deposits without good reason. In theory, the penalties for landlords who do not comply are severe and can include paying the tenant three times the amount of the deposit in dispute. Since its introduction, the arbitration scheme set up to deal with disputes arising between landlords and tenants has dealt with the small number of disputes arising so effectively that as yet the courts have been little troubled with disputes concerning residential deposits.

Recently, a case was heard that involved a landlord who had failed to comply with the time limits for the provision of information as laid down in the legislation. The landlord had complied with the tenancy deposit scheme in all other respects.

The court judged that leniency was warranted and the ‘three times deposit’ penalty was not levied.

It will have to be seen whether this decision serves as a template for future decisions or not. In the meantime, landlords are reminded of the potential dangers of failing to comply with the law.

For further advice contact Chris Beddow of our Property Team on 0121 693 2222 or email cbeddow@tyndallwoods.co.uk