I have learned from the excellent ‘Recent developments in Housing Law’ section of Legal Action Magazine, of Ferguson v. Jones (January 2009) a new tenancy deposit case in Birmingham County Court.
Here Mrs Jones was an assured shorthold tenancy. Her landlord failed to protect her deposit within the prescribed 14 days. It was only protected after he had commenced proceedings for possession (we are not told whether these were pursuant to section 21 or section 8, presumably section 8) and after Mrs Jones had counterclaimed for disrepair, plus the ‘fine’ of three times the amount of the tenancy deposit, as prescribed by s214(2) and (3) of the Housing Act 2004.
District Judge Sheldrake held that the court had no discretion under s214(4) and had to order the landlord to pay the fine. The Judge commented that the statutory provisions would be otiose if the landlord could escape the penalty in s214(4) by placing the deposit in an authorised scheme after the 14 day period. To have interpreted s214(4) in any other way would have been contract to parliaments intention.
Just to remind you, the relevant sections of 214 read as follows:
214 Proceedings relating to tenancy deposits:
(1) Where a tenancy deposit has been paid in connection with a shorthold tenancy, the tenant or any relevant person (as defined by section 213(10)) may make an application to a county court on the grounds—
(a) that the initial requirements of an authorised scheme (see section 213(4)) have not, or section 213(6)(a) has not, been complied with in relation to the deposit; or
(b) that he has been notified by the landlord that a particular authorised scheme applies to the deposit but has been unable to obtain confirmation from the scheme administrator that the deposit is being held in accordance with the scheme.
(a) is satisfied that those requirements have not, or section 213(6)(a) has not, been complied with in relation to the deposit, or
(b) is not satisfied that the deposit is being held in accordance with an authorised scheme,
as the case may be.
(3) The court must, as it thinks fit, either—
(a) order the person who appears to the court to be holding the deposit to repay it to the applicant, or
(b) order that person to pay the deposit into the designated account held by the scheme administrator under an authorised custodial scheme,
within the period of 14 days beginning with the date of the making of the order.
(4) The court must also order the landlord to pay to the applicant a sum of money equal to three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order.
(5) Where any deposit given in connection with a shorthold tenancy could not be lawfully required as a result of section 213(7), the property in question is recoverable from the person holding it by the person by whom it was given as a deposit.
(6) In subsection (5) “deposit” has the meaning given by section 213(8).
You can see the whole section of the act on tenancy deposits here
Landlords should take note of this decision, and make sure that the deposit is always protected within the 14 day period.