The Tiensia case more or less put a coach and horses through the tenancy deposit regulations.
In fact when I spoke at a Landlords Association meeting recently, one of the things I was asked to speak about was the ‘new’ tenancy deposit rules.
“Is it now necessary to lodge them or can you hold them in a separate account as before but then lodge them if there is a contention?” was the question put to me.
There is no point in having tenancy deposit regulations if there is no penalty for non compliance. Landlords will inevitably fail to comply (not all, but certainly some). So it seems that the Localism Bill is going to be used to plug the loopholes exposed by the recent cases.
The Commons Committee considering the Localism Bill will be debating amendments to the Housing provisions in Part 6 of the Bill this week. You can see the current list of amendments tabled for debate here.
Interesting points are:
- The period for protection looks as if it is going to remain 14 days, despite complaints that this is too short. The period suggested in the Scottish regulations was 30 days.
- The amendments provide that a deposit must be protected at the start of ‘a replacement tenancy’ if the deposit money is retained, and the definition given follows the wording of s5 of the Housing Act 1988 – meaning that landlords will no longer be able to avoid the tenancy deposit regulations by allowing the tenancy to run on as a periodic.
- The penalty is no longer going to be fixed at three times the deposit sum. The Judges are gong to be given a discretion to award a sum they consider reasonable up to a maximum of three times the deposit sum. Which will please the Judges greatly. One of their main objections to the current rules is that (before the loopholes were exposed) they were being forced to make the award in circumstances where they considered it unfair (such as this case).
These are just proposals and may not reach the final version of the Bill. However, David Smith writing in the Nearly Legal blog considers that something like these amendments are likely to survive.
In which case the Landlord Law Tenancy Deposit claim scheme can be restored – at present we have withdrawn it due to the difficulties raised by the recent case law.
What do you think of the proposals?
Good news in one respect, in that the holes in the original leghislation are getting plugged but not sure about the penalty amendments.
Judges will of course love it, because they hate anyhting that fetters their discretion but from an adviser viewpoint what do we tell tenants?????? You may or may not have a chance?
I have a lot of respect for our local DJs, they always look for the fair solution but their decisions vary widely. I can think of one judge who would probably mark up the pemnalty but also another, who is a decent soul, going the other way because he wants all the i’s dotted and T’s crossed.
As you know you cant choose your judge, it is a lottery, so I just wouldnt know what to tell a tenant seeking redres
Is it really true to say the universal estates judgement drives a coach and horses though the legislation?
Surely the purpose of the legislation is to ensure the tenant has access to adjudication and that he can get his deposit back at the end. If the deposit is protected late, both of these can be achieved. If the landlord/agent does not protect the deposit and ignores the warning of court action (which he is pretty much guaranteed to lose) then the tenant will get the compensation and deposit back (or protected).
As with My Deposits, at least the insured schemes can write rules that require protection within a time limit. The custodial scheme could do likewise, and like the insured scheme, if you protect it late, they will refuse to adjudicate for breach of scheme rules and give the deposit to the tenant regardless of the validity of the landlord’s claim.
In all this the landlord cannot unfairly withhold the deposit without risk of penalty.
Yes the penalty might prove difficult or impossible to enforce, but the proposed changes to the legislation will not affect this.
I am currently in the position of trying to get my deposit back off the landlord of a property I have recently left.
He did not protect my deposit, and is trying to squeeze it dry, which this law originally was meant to stop.
The tenancy is over, and so he cannot “rush-protect” it before getting to court.
But I can find no help online now on how to use the courts to get my money back because of this current Bill amendment situation, however as far as I can see, the amendments do not effect the basic fact that my deposit was never protected and now cannot be.
Secondly, if I do get to court and these proposals are passed, it seems that it has only been amended with a further penalisation of the tenant….
For example, as the wronged tenant, I have to go through all the work, and stress of going through the legal system because my landlord has not adhered to HIS legal obligations, and at the end of it, the landlord will now only have to pay the money back that was mine all along, and depending on the “up to 3x” will very possibly not actually receive ANY fine for flouting the law.
Again, how does that possibly incentivize landlords to stick to this law?
It has lessened the incentive!
The amendments seem to weaken even further this imbalance for the tenant.
Any help or advice from anyone will e much appreciated.
The amendments serve primarily to clarify points made in the Universal case. It was decided that the language of the HA was unclear and swayed towards present tense (leaning on the deposit being secured before the hearing)
Now Tenants may have clearer guidelines to follow and rogue LL/LA will no longer be able to rush a deposit into a scheme in order to use the s214 to abuse the Act.
IMHO the amount 3x penalty was purely pulled from a hat…and as such fails to offer an objectional penalty. However leaving it to the DJ discretion gives too much open space and with any luck and good persuasion this amendment maybe adjusted. I would like to see a given penalty based on factors. For example 1x dep if LL didnt realise his obligations e.g 1st strike, or relatively new LL
2x dep for established LL who may have had admin error
3x dep for LL who cannot provide strict evidence that every other dep they are currently responsible for is secured
4x dep for continual abusers
Just the views of a bored housewife who is currently embroiled in a non secured dep case!