Landlords should always protect their deposits within 14 days of receiving them and give the required notification to their tenants.
The Court of Appeal has now clarified the date by which a landlord has to protect a tenant’s deposit in order to avoid a penalty. Under a shorthold tenancy the deposit has be protected by lodging it with one of three tenancy deposit schemes. The landlord then has to notify the tenant of what has been done and provide other key information. And, if this isn’t done, landlords face a penalty of three times the amount of the deposit.
Previously there had been uncertainty over the date after which a tenant can claim this penalty, the Court of Appeal has now ruled that as long as a landlord has protected the deposit with one of the schemes and has passed on the required information to the tenant before the court hears the claim, then the tenant is not entitled to the penalty payment.
The Residential Landlord Association reaffirms that the penalty provision was always intended to ensure that the deposit is properly protected and to give the tenant a way of compelling the landlord to comply - not to punish the landlord.
Concerns were raised by the judges that landlords may now be less willing to protect their deposits. However, landlords should always protect their deposits within 14 days of receiving them and give the required notification to their tenants. If they fail to do so, and the tenant brings a court claim, the landlord could face a bill for costs even though the deposit is protected.
