Tenancy Deposits - providing Prescribed Information is just as important as protecting the Deposit

By way of a brief re-cap, Section 213 of the Housing Act 2004 provides:

• A Landlord must register a tenant deposit with an approved Tenancy Deposit Scheme within 30 days of receiving it; and
• That Landlord must also provide the tenant with information about their deposit being specific information prescribed by The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (he Order within that same 30 day period.

If the Landlord fails to do so, the tenant can apply to the Court for compensation equal to the value of the deposit, plus a further sum of between one and three times the value of the deposit.

A case heard recently by the Court of Appeal has confirmed that a Landlord must both protect a tenant deposit and provide them with information as to where that deposit is held, how the tenant may recover their money and what to do in the event of a dispute.

In Ayannuga v Swindelis, a Landlord issued possession proceedings against his tenant on the grounds of rent arrears. The tenant counter-claimed on the basis that although the Landlord had registered their deposit, the Landlord had not provided them with information about their deposit.

Whilst the Landlord admitted that they had not provided the information, he argued that this requirement was procedural and administrative and that the tenant could have found out all the required information from the scheme administrator. He further pointed out that the legislation was there to make sure that landlords registered their tenants deposits. The County Court Judge agreed, but the tenant appealed.

The Court of Appeal overruled the County Court Judge decision and found that:

• Simply protecting the deposit is not sufficient for the Landlord to discharge their obligations
• The Landlord must give written information to the tenant and not just tell the tenant where they may find the information for themselves.

The information that must be provided is set out in the Article 2 of Order.

The Court of Appeal decision shows that the Landlord duty in relation to deposits comprises of two strict elements and each must be completed. The Landlord in this case ended up paying back the deposit to the tenant, plus a penalty of three times the deposit. The requirement to provide the Prescribed Information may be administrative but it could be costly for Landlords who do not comply.

Please contact the Emsleys Housing Law Team on 0113 260 3115 for further information if you have any queries.