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My landlord has returned my unprotected deposit – can I still claim the penalty?

cash in handHere is a question to the blog clinic from Susan who is a tenant:

We live in an HMO and have an AST tenancy. Our landlady failed to protect our deposit in a tenancy deposit protection scheme.

We were advised that because of this she would forfeit her right to serve us with a section 21 notice and that we would be able to make a claim for non-protection of deposit.

We requested that she protect our deposit but she refused and instead she posted the deposit in cash through our door along with a section 21 notice and said she had the police present to witness that she had done this.

Does the fact that she has now apparently returned our deposit mean that we can no longer claim for the penalty for x3 amount of our deposit?

You can still claim a penalty.  The fact that the landlord has returned the deposit means that you can no longer claim for the return of the deposit or for it to be protected – as you now have it back.

However the landlord will have no  defence to a claim for the penalty payment.  The regulations now provide that this will be a sum between one and three times the deposit sum (rather than just three times as before), the exact amount to be in the discretion of the Judge.

As the deposit has been returned to you, and you have suffered no loss, I suspect that any award is more likely to be 1x the deposit sum than 3x.

However as the deposit has been returned this means that the section 21 notice served by your landlord is valid (assuming it has been correctly drafted) and she will be entitled to her possession order if you fail to vacate and she has to go to court to get you out (** see some of the comments on this point however).

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6 Responses to My landlord has returned my unprotected deposit – can I still claim the penalty?

  1. This is slightly unrelated but I’ve just been to court last week (commencing 1st April) over a previous tenancy (in England) that started before these changes and ended a few months afterwards and the Judge still ruled that protecting the deposit after tenancy and doing it before court was still non fineable, he also completely dismissed the issue of prescribed information despite it not being done. Due to the nature of small claims court the Judge only referenced the court of appeal but not any cases, I’m absolutely livid and currently weighing the option to appeal but realistically I probably can’t afford to.

  2. Peter
    Judge is clearly wrong on all counts and needs the matter referring to a Circuit Judge so he can rap his knuckles and give a correct ruling. All Landlord and agents had until 5th May 2012 to tidy up existing matters otherwise the offence is committed and no escape.
    Tessa I agree with all you say except in one respect I am not so sure that return of deposit and dating of s21 notice on same day is right it feels wrong to me.
    However the fact this LL is a liar should be brought up in Court – police witnessing it for her indeed never heard anything so daft in my life!!

  3. Thanks for your replies.

    It is interesting that you should say about the LL being a liar and we also assumed that this was the case (as we have previous experience of her dishonesty). So we wrote to the police for information. They wrote back saying that 3 Officers had in fact been present to “prevent a breach of the peace” and that they had “witnessed” the “return of our original deposit (£xxx) under the door to our room”. We then complained that we didn’t feel that it was appropriate for them to be witnessing LLs financial dealings in the absence of the tenant and that the return of a deposit should be something that is agreed on by the tenant or decided by a judge. We also asked how the Officers had established the amount of money that had been posted (as there was a discrepancy between the amount we had received and the amount that they had witnessed). They then wrote back saying that the matter had been “handled appropriately by our officers and in accordance with our normal rules and procedures” and they have refused to give us any further information. :\

  4. @Industry Observer You may be right about the time of service of the s21 notice – Susan you may be able to defend a possession claim based on s21 by putting her to proof that the deposit money was refunded to you BEFORE the s21 notice was served.

    Which she may find difficult to do if everything was put through the letter box at the same time.

    However the return of the deposit money is not conditional upon the agreement of the tenant or a Judge order.

    She is perfectly entitled to return it if she wishes.

  5. I am staggered the police would get involved – why was any breach of the peace suspected?

    Tessa is right. The money should have had a note with it saying posted at 1130 and then the s21 notice should have been timed at say 1135

  6. Many thanks again for your replies.
    The only information the police would give us was that they had a justifiable reason to believe that a breach may take place. From what we can gather our LL has been telling the police that we have been harassing her. The police have never approached us about this so whatever she is telling them is obviously not serious enough for them to investigate but serious enough that they feel it is justified to come and witness a deposit return (whilst preventing BotP). We can only speculate really.

    Cash and Section 21 did have a note with them saying that they had both been posted together so LL will find it very difficult to prove that deposit had been returned first.



About the post author:

Tessa Shepperson

Tessa is a lawyer and specialises in creating products and services which help landlords and letting agents learn and understand landlord & tenant law. For example, she runs the Landlord Law website (now in its 14th year) and is a director of Easy Law Training Ltd and Your Law Store. Tessa also sits on the Property Redress Scheme Council. When not working she enjoys reading, cooking and messing around on the computer. You can also find her on Google

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Tessa is an English lawyer specialising in residential landlord and tenant law.

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