Tenancy Deposit Protection - First High Court Decision

[lawdoctor]

You are right in that the three schemes adopt different initial requirements - however, whether these initial requirements will trump the Act's 14 day provision is in my view very doubtful.

 

Again roll on the clarity which is so badly needed.

 

Lawdoctor.

[Webranger]

lawdoctor: thanks for the info. though I must say that on constitutional grounds I strongly disapprove of this process.The courts should take notice of what the written law says plus any promises or assurances made by ministers at the time as shown by Hansard, but interpretations by civil servants or politicians of what they think Parliament intended should not be heard. That's another attack on Parliamentary supremacy. If Parliament messed up, it's Parliament that should put it right.

 

The 14 day rule was never intended to be a part of the initial requirements, it was just a time frame for meeting them, but it was never clear what these requirements were supposed to be or what their role was. More importantly there was no mention of what should happen if the time frame was not met, though S214 (3) b) and something in S215 do allow for late protection in certain instances. As it is, all the schemes decided to accept late protection so therefore the dispute resolution system is available to those tenants.

 

Steve_M: Of course those whose deposits have not been returned or are still not being protected are acting quite properly in seeking to enforce the law.The money-grubbers are those who are suffering no loss but want to twist some written rules in order to get cash to which they have no moral right - just as landlords who demand deposits and then give spurious reasons for not returning them are money-grubbers. Just before this legislation came into effect I had to act for my student son in getting a deposit returned via the court, so I have no doubts of the need of properly drafted law.

[Steve__M]

It seems to me that if the 3 schemes got together and agreed some common initial requirements, then the pigs ear could be straightened out a bit.

 

I wrote to the DPS after a recent case and they gave me a bland reply about how their legal team were looking at it and how they thought that landlords ought always to try and meet the 14 day rule. Since then they don't seem to have done anything.

[lawdoctor]

Webranger, I agree on constitutional grounds I also disapprove, sadly our constitution is-- what is not forbiden is allowed.

 

ie, we have no written constitution in this democracy!!

 

Very interesting post by the way the court case in which you played your roll of litigation friend very well if I might say.

 

Lawdoctor.

[lawdoctor]

Webranger, more info may be of some value!

 

Upcoming Court of Appeal cases:

Well, there is UK Housing Alliance (North West) Ltd v Michael John Francis which was reported on by the Nearly Legal blog at first instance and should have been heard on the 8th or 9th of February. It, however, is on the issue of whether a retention payment on a sale and leaseback can be a deposit requiring protection.

There is also Universal Estates v Tiensia which is listed to be heard on 31 March or 1 April according to its entry on casetracker. This case has the potential to change the position radically as it is all about whether the MyDeposits scheme has an implied initial requirement that a deposit be protected within 14 days.

There have been rumours of another case in a Court of Record in which the Government is intervening. Apparently the Master of the Rolls wrote to all District Judges asking them to look out for a suitable candidate to send upwards straight to a Court of Record in order to clear up the position. Honeysuckle may be that case. Its record on casetracker gives a hearing date of 7 May before a very august grouping.

 

Lawdoctor

[lawdoctor]

The entry on casestracker;

 

If you did not know how to follow a case now you do.

Summary Case Details for 20092163

 

 

Case Reference:B5/2009/2163 Title:Honeysuckle Properties v Fletcher & OrsType:AppealAppeal/Application:from the order of Mr District Judge Stonier Manchester County Court dated 30-Jan-09 Hearing Status:Fixed on 07-May-10Venue:LondonConstitution:LORD JUSTICE THORPE

LORD JUSTICE SEDLEY

LORD JUSTICE RIMER

Case Results

 

 

Track Your Case

 

Current Status:Awaiting result of a reserved judgmentTracking Information:07-May-10: Case given a reserved judgment

08-Dec-09: Case passed to List Office

11-Nov-09: Bundle corrections were approved

28-Oct-09: Letter sent to applicant/solicitor to request bundles and/or documents

 

 

 

 

Last Updated:

 

Lawdoctor

02-Jul-10

[lawdoctor]

As you can see the listing of the appeal before three such eminent Law Lords

 

shows just how important this case and the outcome is viewed.

 

Lawdoctor.

[lawdoctor]

LEGAL ADVICE WARNING!!!!

 

Sometime last year when I visited this forum using a different pseudonym I was in the round, as I still am today, in praise of the good work and value that the forum had for many. However, I was very aware that there was a small element of member 'experts' who were portraying their limited legal knowledge way beyond the true level of its value as I viewed it.

 

I realised then that if I left the spell checker off and deliberately paid no regard to grammer or layout etc the forums groupie experts would engage me with their legal knowledge of the law which was often portrayed as fact. When I replied to posts using my normal acquired style and addressed the law with which I have had a love affair for over 30 years both professionally and these days as a hobby I found that these same experts were reluctant to engage in debate.

 

This I personally found to be rather sad as when I was cutting my legal teeth if a day went by when my then mentor did not turn my face red I felt that it was a day when I had advanced very little.

 

It is often said that forum members are sometimes just retelling other peoples reported experiences, this of course is fine and one of the many things that makes it such a great site. However, as I have witnessed some of this 'retelling' is often regurgitated and portrayed as legal fact. This of course could be dangerous to the very many who just view this site to perhaps gain some knowledge to assist in their own circumstances. Although the site team do a good job they cannot monitor some of the downright misleading legal statements portrayed as fact and not opinion.

 

For my part I am merely passing through and would be unlikely to visit again for some time.

 

So when I was choosing a new name for this current fleeting visit I could not resist the name "Lawdoctor" from where I was sitting some of the legal statements being bandied about as legal fact to me appeared to be legally unwell and in need of some legal medicine from the visiting locum - "Lawdoctor".

 

I may not be a legal surgeon but I hope that I have, in my forthright approach, lent something to this forum, if I have then I am glad - if I have not then the person who says so can expect a cyber writ from me as I consider cyber liable to be actionable!!

 

LAWDOCTOR.

[lawdoctor]

So they agree with my analysis!

 

 

This is what you said earlier on this thread( after the High Court Judgement) we will shortly see if you were right--should be fun

 

Lawdoctor

[danielr]

Lawdoctor. I'd be careful of climbing on a high horse if I were you.

 

At the moment we're only looking at one ordinary mans interpretation vs another ordinary mans interpretation. We can only wait to find out what judgement is offered and how that is appealed/reviewed/applied in the courts...

[Steve__M]

The fact that an appeal judge agreed with my analysis will not change if some other more senior judges don't agree with my analysis. I do understand that even if it is a subtlety too far for some.

 

Time for another smiley

[Webranger]

Lawdoctor, thanks for the compliment, the constitutional agreement, and all the information.

I don't see how they can say that MyDeposits has an implied initial requirement that a deposit be protected within 14 days when they accept them from me even though I clearly show that they are beyond that (not often but I have made the mistake a couple of times).

 

It's a pity we don't know what the Honeysuckle case is about.

[Planner]

 

It's a pity we don't know what the Honeysuckle case is about.

 

It will be about a thieving landlord not complying with the law and/or trying to shirk their responsibilities.

[Webranger]

Now there's prejudice for you!

 

I'm not a betting man, but I would gladly take on odds that if it were possible to work out how much nationally had been "stolen" from tenants by landlords and how much "stolen" from landlords by tenants over the past 12 months, the latter would be many times greater than the former.

[xoAmyox]

Its just a shame you cant measure the stress, worry, impact on health, loss of dignity and a whole host of other problems that LL's cause tenants, i'd take odds on that. I'm not saying that the majority of LL's are like this, but the minority sure do make up for it!

[Webranger]

Just change the terms "LL's" and "tenants" in that post around and we have an equal truth.

 

It's "man's inhumanity to man" that operates whatever labels we give to different groups.

 

Once upon a time, of course, the economic and legal power was with landlords and SOME exploited it, but legal efforts to protect honest tenants have made it easy for dishonest tenants to gain the upper hand.

[Planner]

Its just a shame you cant measure the stress, worry, impact on health, loss of dignity and a whole host of other problems that LL's cause tenants, i'd take odds on that. I'm not saying that the majority of LL's are like this, but the minority sure do make up for it!

 

Quite agree.

 

Webranger seems to forget that the legislation has been introduced because of landlords actions, preferring instead to concentrate on his sense of righteous indignation that tenants are now daring to use the legislation granted to them to challange the failings of others in his ‘profession’ – Now that IS prejudice for you!

[Webranger]

What are you talking about? Your prejudice is making you unable to read. I said that the laws were introduced because some landlords exploited their position.

 

Nor was I referring to tenants using legislation, but to tenants who don't pay their rent ("stealing") and are very difficult to get out or get arrears from. Do you think that there are no dishonest tenants? Or perhaps they are all in Wales? Any righteous indignation I have is against stealing, whether the thieves are LL's or tenants.

[Planner]

What are you talking about? Your prejudice is making you unable to read. I said that the laws were introduced because some landlords exploited their position.

 

Nor was I referring to tenants using legislation, but to tenants who don't pay their rent ("stealing") and are very difficult to get out or get arrears from. Do you think that there are no dishonest tenants? Or perhaps they are all in Wales? Any righteous indignation I have is against stealing, whether the thieves are LL's or tenants.

 

But your posts betray your true feelings. Your obviously a Landlord, and you make no beef about that. Have the brass b*lls to stick to that position, your constant attempts to be the champion of both sides is beginning to look weak - Take your post 141 above for example. It starts off all ‘golly gosh, we’re all in this together chaps, landlords and tenants alike’ ‘we’re all in the same boat’, ‘arent there some nasty landlords and tenants out there?!’ – unfortunately, it concludes like the rest of your posts, back to the same default position of how hard done by landlords are because of this new legislation and how bad tenants are.

While I have no particular issue with your position, I cant stand your thinly veiled attempt at trying to be the man of both sides. Do us all a favour, stick to your landlord position, your tenant advocacy is as fake as Jordan.

[Webranger]

I'll just remind you that I have never in any post denied the need for legislation to protect tenants' deposits, I have only criticised the drafting of this legislation; the attempted introduction of a new feature in English law- the ability of one citizen who has suffered no loss to fine another for a bureaucratic error; and the determination of some commentators to view the legislation as a long overdue chance to beat up landlords as a class.

 

If you are determined to see me as a fake, that is your problem and nothing I can do about it.

[danielr]

What is your opinion of landlords and estate agents who send reminders for rent? And charge for the privellage?

The landlord has suffered no loss if they get their rental payment late. But see no problems in charging £25 per letter if they are having to send letters.

I do agree that if a tenant has got their deposit back in it's entirety that they shouldn't be entitled to extra money.

 

But I go back to the example of late rental payments, and the way that landlords (but usually estate agents) will fine you for them having to send you letters to remind you to pay your rent.

 

In that example they've got their money (albeit late). So shouldn't be entitled to more??

 

What's good for the goose is good for the gander.

 

If an estate agent or landlord think that it's fine that they should charge a tenant for sending a reminder letter for rent if it's a few days late.

 

I.e. If it's fair for landlords to fine tenants for administrative errors.

 

Then it's fair game for tenants to screw landlords for their administrative errors...

 

As I said earlier in the post. I don't agree with either. But if landlords and letting agents want to screw tenants about so much. Don't be surprised when tenants screw landlords about when they get the chance...

[Webranger]

Basically I agree with you, Danieir. Most ASTA's have a clause allowing the landlord to make a charge for sending such a letter. In mine it's £5, which is reasonable, but I have never applied it. £25 is beyond reasonable, so the tenant could offer £5 saying that the £25 is an unfair term of contract under the Consumer Credit Act.

 

The estate agent might well back down at that. If they don't, you can just not pay, but the crunch will come when they try and deduct the accumulated charges from your deposit when you leave. Or they might just decide to terminate/not renew your tenancy without having to give a reason.

 

It IS an unfair term if set at £25 so in that respect the law is on your side, but it is a problem best avoided. If the rent is going to be late, best warn them in advance and get them not to send the letter.

[Planner]

an unfair term of contract under the Consumer Credit Act.

 

 

I see its not just landlord and tenant legislation you have a weak grasp of!

[danielr]

In my case, I had actually paid the rent, and the estate agent had "miss allocated" it. I wrote them an email detailing all the times we'd paid rent, then that was the end of it, until the next month, when they again thought that we were late, as it turns out it was a few months ago they'd miss-allocated the payment so were sending us letters each month.

 

in the end I sent them another email detailing all the times we'd paid, attached bank statements to prove what I was saying, sent it off, and told them that I wouldn't be paying their charges for letters sent due to their error.

Most ASTA's have a clause allowing the landlord to make a charge for sending such a letter. In mine it's £5, which is reasonable,

short stories aside.

 

what you're saying there, is that if a tenant pays their rent late, you feel that you may want to send them a letter, and you'll charge them because they've made an administrative error.

 

as you say, it's written into the contract, they've agreed to it, contract law is on your side.

 

I'm assuming that you give your tenants fair time to realise and correct their mistake? after all if you've not paid rent you'll notice as your account has much more money in than normal.

 

what's fair time? perhaps a couple of weeks?

 

so if the rent's not paid on the 1st, by the 15th you'll be writing a letter to the tenants and charging them for that?

 

 

you're saying that if a tenant can't pay rent within a reasonable time of when they are supposed to do it, then it's perfectly fair that even though "you haven't lost out financially" that you should be able to fine tenants

I say fine because £25 is far and away beyond the cost of the time taken to print a template letter and put a stamp on it. -even £5 seems a bit much for sending out a standard letter.

 

I'm saying, what's good for one is good for another.

if a landlord feels it's OK to impose financial penalty on a tenant because they are late with their responsibilities then that's OK.

but then don't be surprised if a tenant feels that it's OK to impose a financial penalty when the landlord is late with his or her responsibilities.

 

I agree that the penalty is unfair for not registering deposits -especially when the tenant is no worse off financially, but, I also think that charging people to send them a letter saying that they are late is unfair. -especially when the land lord is no worse off financially.

 

 

you surely can't have it both ways?

 

but I have never applied it.

now this is the part when it gets interesting.

 

I understand what you're saying, you've never charged it.

 

I would assume a part of that would be that you're thinking that you're no worse off financially and it'll only be a hassle to collect the money.

 

I feel the same, I wouldn't care if a landlord didn't protect my deposit, so long as I got back all my deposit, (or at least all that I deserved) then I'd think that it was unfair to chase the landlord and it'd only be hassle anyway...

 

but that's OK, you leave your option to charge (in my opinion) unfairly in your contracts, and let the law stand as it with the option to charge (in my opinion) unfairly in the law regarding registering deposits.

[Aequitas]

Whilst the reasoning of the learned judge cannot be faulted in interpreting the statute as written, I think it is open to question whether he made the correct decision in law.

 

The effect of the provisions that were looked at is not immediately apparent and can only be determined by careful analysis. That leads us to question whether the wording as it appeared in the Act as passed in fact gave effect to the declared intention of the legislation and therefore, presumably, what parliament intended. When I first heard the contention that a failure to protect a deposit within 14 days did not lead to an automatic penalty I was reluctant to believe it; it appeared to go against what a casual reading of the Act said. However, after a careful reading I found myself forced to agree that the contention was not wholly without merit. Even so, it produced what seemed to me the nonsense that the law imposed a time limit, but effectively imposed no sanction for failing to comply with the time limit and the extreme oddity that the right to claim compensation only arose if the landlord failed to protect the deposit before the hearing, which surely no landlord would fail to do. I cannot help feeling that if that was what parliament had intended it would have said so. Accordingly the argument upheld in the lower courts that: "to suggest that the 14 day requirement set out in s213(6)(b) did not attract the penalties set out is section 214 was to “drive a coach and horses” through the intent of the Act as it would permit a landlord to not protect a deposit until such time as they were challenged in Court" seems to me to be a forceful one.

 

The notion that the Act should be interpreted so as not to impose a penalty on an innocent landlord and/or hand a windfall to a tenant who suffers no loss is entirely misconceived and misses entirely the point of a civil penalty. The intention is not to give a windfall to a tenant, but rather to encourage compliance with the law; the fact that a tenant who suffers no loss makes a gain is no more than an outcome of imposing a sanction on the landlord. Whilst one can have some sympathy with the truly innocent landlord, the legal rule that ignorance of the law is no excuse is there for the very good reason that everyone would otherwise plead ignorance.

 

No, I think the correct approach is to interpret the Act having regard to the mischief it was intended to prevent; the mischief was the unjustifiable retention of tenancy deposits by landlords and their agents. The Act addresses the mischief by providing protection for tenants and imposing sanctions on landlords who fail to provide the protection. A court is of course only required to look at the mischief an act is intended to deal with if its wording is unclear or self-contradictory. The question to be asked therefore is whether the provisions the court had to interpret are sufficiently clear and, if they are - and in fact it seems they are - whether there is anything else in the Act which requires other than a strict interpretation of them. Since the Act seems to impose a sanction with one hand, but take it back with another by making it enforceable only in circumstances unlikely to arise, I think that a more liberal interpretation is justified.

Edited July 10, 2010 by Aequitas