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NORTHWEST PROPERTY ARTICLES

Monday November 26 2012

Landlord handed maximum penalty for "minor" breach




Landlord handed maximum penalty for "minor" breach

A residential landlord who failed to provide his tenant with all the prescribed information relating to his deposit within the 30 day limit has been handed the maximum penalty possible by the Court of Appeal.


Most residential landlords will know that once a deposit is received from a tenant, it must be placed in an approved tenancy deposit scheme (such as the DPS) within 30 days.

What some may not know is that, in addition to protecting the deposit, the landlord must provide the tenant with 'prescribed information' relating to where and how their deposit is protected as well as some generic information regarding the rights and procedures involved. This information must be given by the landlord to the tenant within 30 days of receipt of the deposit.


Whilst some standard information and precedent forms are usually available from the scheme provider, it is an obligation of the landlord to provide the prescribed information, not the scheme provider, as many landlords wrongly assume.


The case of Ayannuga v Swindells, which was heard by the Court of Appeal earlier this month, demonstrates just how stringent the approach taken by the Courts is when it comes to the rules surrounding the protection of deposits.


In this case, the landlord had in fact provided most of the prescribed information within the timescale of 30 days, but had omitted certain 'minor' details. These details were widely available online and the tenant could have easily accessed the relevant information from the scheme provider's website.

Despite the remaining information being in the public domain, its omission from the 'prescribed information' provided by the landlord was serious enough to warrant the maximum penalty, being three times the amount of the deposit as well as the tenant retaining the initial deposit.


John Devoy, Head of Litigation at Aaron & Partners says:

"This case really demonstrates the importance of landlords' strict compliance of the rules in respect of tenants' deposits.

Too many landlords make the mistake of thinking that as long as they put the deposit in an approved scheme, they have done what they need to do in order to comply with their obligations. They often think that the scheme provider will handle everything else, and, as this case shows, this can be an expensive assumption.

It is also important to remember that failure to comply with the rules on deposit protection can also prevent the landlord from being able to reclaim possession at the end of the tenancy.

The law is becoming more and more weighted in favour of tenants, and landlords need to make sure that they are fully aware of their obligations or be prepared to face the often severe financial consequences being handed out by the Courts"



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