A Section 21 Notice (and consequently, the Eviction) are Suspended Until Both the Deposit is Protected and the Prescribed Information Provided to the Tenant.
It has been mandatory for the landlord to protect the tenant’s deposit with one of three designated organisations and provide “Prescribed Information” to the tenant about how this has been done, since 06.04.12. If the necessary steps are not completed, the court must order the return of the deposit together with a payment (under the old legislation) equivalent to 3 times the deposit. The notice and subsequently, the tenant’s eviction cannot go ahead until the issues are dealt with.
The legislation was not well drafted and ran into problems with the courts. Principally, landlords became able to circumvent the penalties and proceed with evicting the tenant simply by protecting the deposit at any time before the matter came to court. Some amendments were made which came into force on 06.04.12.
It is now mandatory for the landlord to protect the tenants deposit and provide the prescribed information within 30 days of receiving the deposit. The tenant is now able to make a claim under the legislation, for the return of the deposit and the penalty of between 1 and 3 times the deposit, before or after the tenancy has ended. A section 21 notice (and therefore any eviction) is suspended until the landlord returns the deposit, either in full or with deductions that have been agreed with the tenant.
A question came before the Court of Appeal recently. What if the deposit has been properly protected by the landlord but the prescribed information not provided to the tenant? The case was Ayannuga v Swindells (2012) CA (Civ) 6 November 2012. The landlord wanted to evict the tenant and brought a claim for possession, the tenant entered a defence and counter claim based on the landlord’s failure to provide the prescribed information. It was common ground that the deposit had actually been protected and that the Prescribed Information requirements had not been complied with.
Protection Without Information is Not Enough
The landlord argued that it was an inconsequential technicality not to fully provide the tenant with prescribed information and that the information was freely available from the scheme with which the deposit had been protected, and on the internet; a minor technical oversight should not matter. The lower court agreed with the landlord. However, the Court of Appeal found that the information was of real importance as it told tenants how to dispute deductions without recourse to the courts. The Prescribed Information must be supplied. The landlord had to return the deposit and pay the tenant 3 times the deposit in addition. Furthermore, the landlord had endured considerable delays in his efforts to evict the tenant.
It is fairly onerous to comply with the Prescribed Information requirements, however, it is hugely more onerous and potentially very expensive to have to deal with a defence and counter claim when trying to get possession of your property or even a claim for the deposit and penalty up to six years after the end of the tenancy.
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