Is a deposit properly protected if it is protected jointly with another deposit for another property?

Here is a question to the blog clinic from Derek (not his real name) who is a tenant

My girlfriend and I have a joint tenancy for 1 room in a 2 bedroom flat. The other tenant was unknown to us until 2 days after moving in and he is not a party to our AST.

Presumably, he has his own AST for his own room. We paid a deposit to the agent of £1500 which has been passed on to the landlord. The landlord has protected the deposit in the total amount of £3200 (this being the combined amount of our deposit and his deposit) and has protected it using all 3 names.

TDS and Shelter have told me to inform the landlord and ask to have it amended. I asked this before the 30 day time limit had passed and the landlord has refused to amend the details.

The 30 day limit for protection has now passed. I am concerned that this other tenant has rights over our deposit (for example, in TDS rules “all joint tenants must agree to the use of the ADR process”) and that it has impacted our own rights (for example, “ADR can only be used once per deposit”).

TDS have so far sat on the fence regarding the matter informing me that only a court can rule that the deposit is not protected.

My questions is does this count as ‘protected’?

Secondly, the landlord provided us with a scheme booklet (direct from the TDS via email) and a copy of the tenancy deposit certificate.

This appears to cover the majority of the ‘prescribed information,’ however it does not give any information relating to “the circumstances when all or part of the deposit may be retained by the landlord, by reference to the terms of the tenancy.”

I note that the RLA have a specific form to be completed to address this aspect of the PI. Further, no landlord address has been provided and as above the tenancy information and deposit amount is incorrect compared to our AST.

Would the above render the prescribed information not served and thus raise the possibility of a penalty? Ayannuga v Swindells reiterates the importance of the prescribed information but doesn’t seem to answer the question of where the line should be drawn.

Answer

This is a very interesting question and I’m not sure I know the answer to all of it.

Is the deposit protected?

You are quite right, you are prejudiced by the landlord protecting your deposit in conjunction with the tenant of the other room. However as it has actually been protected under a scheme – does this mean that the landlord is compliant?

I agree with you that it should not, but it may be. What the wording of the statute actually says is

Any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme.

So the question is – has it been dealt with in accordance with your authorised scheme, the TDS?

The scheme rules do not appear to directly address this situation at all, so I suppose we are left with interpretation of the words used. For example the tenants named in the protection are not actually “the tenant” for either one of the two tenancies.

‘The tenant’ for your tenancy is ‘you and your girlfriend’ (ie not including the other person) and ‘the tenant’ under other person’s tenancy is just him. So the protection is incorrect in this respect.

But is this sufficient for the landlord to be deemed to have failed to deal with your deposit in accordance with the scheme? Putting him in breach and vulnerable to the penalty?

I don’t know, but I think an argument could be made. As what the landlord has done is clearly incorrect and prejudicial to both parties. Presumably he has done it this way to save on deposit protection fees.

It may take a proper trial and a considered argument in front of a Judge to decide this point – not something, I am sure, that you will want to deal with.

Is the prescribed information correct?

Here I think the answer is clearly ‘no’. The case of Ayannuga v Swindells makes it clear that landlords must serve ALL the prescribed information, not just bits of it.

The information the landlord needs to provide is set out in the regulations here and your landlord has clearly not complied with (g)(iii) and (g)(vi). Plus as you say, the names of the tenants and the amount of the deposit are incorrect with reference to both tenancies.

So I think you should be entitled to bring a claim for the penalty. If you did so the Judge would probably comment on the incorrect combining of two deposits within the one protection and this would prompt your landlord, hopefully, to deal with it properly.

Note by the way that if you do bring a claim, it might be best to get the other tenant to join in with you.

Has anyone else experienced this problem?

By the way, as this is an unusual situation, you may be able to get help with bringing the claim. Take a look at the resources here.