After a few recent cases on Tenancy Deposits favouring landlords the initial warnings about failing to comply with the legislation have dropped off the radar for many residential buy to let Landlords. A recent case of Ayannuga v Swindells (2012) is seen by many as a wake up call.
This Court of Appeal decision dealt with the issue of ‘prescribed information’ (i.e. the information the Landlord must give the tenant within 30 days of taking the deposit – see checklist below).
In this case, the landlord put the tenant’s deposit in one of the approved tenancy deposit schemes (see below) but did not provide the prescribed information.
Tenant in Arrears
As commonly happens the tenant fell into arrears and the the landlord issued possession proceedings. The tenant defended the claim on the basis that the prescribed information had not been provided by the landlord and counter claimed for the penalty payment due under the legislation of 3x the rent deposit.
The Landlord admitted this but tried to argue that this was merely a minor procedural element – the fact that the deposit was in a scheme was sufficient. The landlord also stated that the tenant was able to ascertain the relevant information from the scheme administrator.
In the lower Court the tenant’s claim was dismissed but the tenant appealed. The Court of Appeal agreed with the tenant and said that the ‘prescribed information’ was of significant importance as it provided tenants with information on how they could attempt to recover money and dispute deductions without having to go through court action.
Landlord Ordered to Pay Penalty
The landlord was ordered to return the deposit plus to a penalty equivalent to three times the deposit. A costly mistake for a minor administrative error.
The Court of Appeal has made it clear that the onus is on the Landlord to supply the prescribed information to the Tenant.
Prescribed Information – Information Landlords must give Tenants
Within 30 days of getting your deposit, your landlord must tell you:
- the address of the rented property
- how much deposit you have paid
- how the deposit is protected
- the name and contact details of the TDP scheme and its dispute resolution service
- their (or the letting agency’s) name and contact details
- the name and contact details of any third party that’s paid the deposit
- why they would keep some or all of the deposit
- how to apply to get the deposit back
- what to do if you cannot get hold of the landlord at the end of the tenancy
- what to do if there’s a dispute over the deposit
It is clear that landlords need to do all they can to bring the prescribed information to their tenants’ attention or face the problems of not obtaining possession back and being hit with a large compensation claim.
Approved Tenants Deposit Protection providers (TDP)
There are currently 3 tenancy deposit protection (TDP) schemes:
For further information on selling or purchasing a right to buy investment property call Mark Sadler on 01708 757575 or email email@example.com
Kenneth Elliott and Rowe provide specialist advice on buying and selling residential property. For a quote or further information on our service visit our website www.ker.co.uk