I read a news items on the Deposit Protection Service website today which reported a survey showing that 62% of private landlords are flouting the tenancy deposit rules, and not protecting their tenants deposits.
If this report is true, and I suspect it probably is, or at least very near the truth, then this means that only letting agents and the better landlords are complying – meaning that those the scheme is really aimed at are ignoring it.
One probable reason for this is that the penalties (in particular the provision for the tenant to be awarded a ‘fine’ of three times the deposit money) appear in reality to be difficult to enforce. This is partly because the legislation is unclear. Upon careful reading it does not actually say that the fine is automatic if the landlord fails to protect within the time limits (although they do appear to indicate that it might be if the landlord is in breach of his schemes rules – there may be grounds for a test case there).
I am only aware of one case where the tenant succeeded. This was reported in Legal Action Magazine (June 2008) and was where the tenant had actually vacated in response to a section 21 notice served on her. Here the landlord was unable to remedy the position (ie by protecting the deposit out of time) and the Judge reluctantly made the order. However if the tenant had still been in possession, no doubt the landlord would hastily have arranged for the deposit to be protected, and the Judge would then have refused to make the order. The Legal Action report made it clear that the Judge only awarded the fine with reluctance and because the legislation gave him no alternative. (NB I would be very interested to hear of any other cases.)
[Note - since this post was written in July 2008, there have been considerably more cases reported, see the other posts on this blog on tenancy deposits to find them]
What is doubtless happening is that many landlords are taking the view that they will not protect deposits unless tenants threaten court action. However most tenants do not do this. Many will be wholly unaware of the tenancy deposit protection provisions, particularly, for example, if they have only recently come to this country and English is not their first language.
However, even if they are articulate British nationals, most people, even if they have a vague sort of idea that the landlord ought to do something about the deposit, will just assume that either he has done it or that the rules no longer apply. Ordinary people do not go around assuming that their landlords are breaking the law, or threatening court action. Generally people are unfamiliar with the courts and find the very thought of bringing a court claim scary.
One answer I suppose, is to do more to make people aware of the tenancy deposit scheme. Maybe it ought to feature in one of the soaps, there is probably a storyline in there somewhere. The other is to amend the rules to make it clear that if the landlord has not protected the deposit within the time limits, he cannot prevent the tenants succeeding, in a claim for the ‘fine’, by protecting the deposit out of time.
NB Tenants wanting to bring a claim, should note that there is a do-it-yourself kit (Kit 2) available via my web-site www.landlordlaw.co.uk.
[Note - there a many questions from landlords and tenants in the comments, most of which I have answered (although comments on this post are now closed). Please bear in mind that new cases (and interpretations of the rules) have come along since my answers were given. Note that there are many other more recent posts also on tenancy deposits which you can read via this link.]
[Note 2 - see my post here one year on : Tenancy deposit protction - now only 30% failure]
Related posts:
Hi Tessa,
I encounter sam old problem – landlord didn’t protect my deposit under the scheme and I am thinking to bring the claim to court. Is it possible to do via small claims track (so not to involve solicitors)? What people do generally from your experience – go through small claims track or fast track?
Thanks!
Strictly speaking you should use neither. The court have indicated that a special procedure (part 8) should be used for this type of claim.
This is set out in my Kit 2, which also provides the forms.
The most recent feedback I have had from a tenant using this kit is that they have suceeded in getting the award without much trouble, but are worried about whether the landlord (who sounds like a dodgy type) will actually pay it.
Hi Tessa
Just a question as to who I should take action against for non protection. I found out that my deposit was unprotected when I vacated premises. I paid the deposit to the letting agents. They say it was the landlord’s responsibility. He is withholding part of the deposit, even though the exit check states that the flat was cleaner than when I moved in.
So, would it be the landlord or the letting agent-or indeed both? This is confusing me. If I can decide on this I can proceed.
Probably you should claim against both. The agent is liable as he is the person who the deposit was actually handed to, however it is arguable that the landlord is also liable.
Hi Tessa,
Could you tell me if I can make a small claim (if it’s worthy) against my Landlord, because she fail to notify me about the deposit protection.
My first tenancy was in 10/2005, however a new tenancy agreement was signed in 2007 on the same basis.
The first time when I realised that my deposit is protected was when I received papers from a Court, as she make a small claim to evicted me. It was under section 21.
However, at this time I did not know that I have any rights regarding the deposit, until my Landlord sent me a letter stating that the deposit of £1500 was not enough to cover all damages I make at her property and I have to pay extra of £68. I was shocked as all my family for 3 days helped me to clean everything I had a professional builder and cleaning service for a carpet. The house was in much, much better condition than when I moved in.
2 days later I received a letter from “my deposit scheme” states that my deposit now is unprotected. Therefore I realised and asked for advised that I should be informed by my Landlord if the deposit is protected and which scheme she chose and about my rights. Also I read that she should not give me a NTQ under section 21, because she fail to do that.
Could just tell me if is a point to make a small claim to get a 3* deposit compensation, because she failed to notify me about the deposit protection.????
Many Thanks
Ax
I have given quite a lot of help to people posting on this thread, but I think (bearing in mind that this is the 56th comment!) that I have to draw a line somewhere.
The questions asked most recently are very similar to those asked by others, and I would suggest that you read carefully my other comments on this thread, and the other posts and comments on tenancy deposits on this blog, which you can see if you click here.
Although I may answer questions on original points relating to tenancy deposits on the other postings on this blog, please can readers note that comments are now closed for this post.
Please note also that you can obtain information and advice via my web-site service http://www.landlordlaw.co.uk