TDS - case law and the demise of the HA2004?

[MrShed]

Hi all,

 

Just been doing some catching up as I have been out of the loop for a while, in particular to do with EDs excellent standard advice on the TDS case laws.

 

From some personal reading, it would appear that that three main case laws are Tiensia, Gladehurst and Potts.

 

My current high level understanding of the consequences of these case laws are as follows:

 

- A claim for three times the deposit due to failure to protect must ALWAYS fail following the ending of the tenancy.

- A claim for three times the deposit due to failure to protect must ALWAYS fail if the deposit is protected prior to the hearing.

 

This basically means that in practical terms, it is effectively impossible to enforce a three times penalty due to non protection - unless you sue at the start of the tenancy, and the landlord is dumb enough not to protect by the hearing.

 

So, at this stage, my understanding is that there is no real case law as of yet for 213(5) - i.e. prescribed info, so this may be the only avenue of enforcing the three times deposit penalty.

 

Am I correct in my surmisation?

 

If so, then I have to say that I am delighted this has become the outcome. I had argued since day one that the 3x penalty was an unneccessarily draconian step, and something of a precedent within law. Although, undoubtedly, it is down to the terrible way in which the HA2004 has been written, I believe that it has brought the TDS areas back to what it should have been - enforcement only, which is still allowed.

 

Any thoughts from anyone..?

[Steve__M]

The problem now is that we're back to a situation where it cannot be enforced after the tenancy has ended (possibly even if case is submitted before the end of the tenancy).

 

Amendments have been submitted via the Localism bill. IIRC the amendment suggests the 14 day limit for protecting the deposit should be strict, and the penalty should be between 1 and 3 times the deposit at the discretion of the judge, and depending on how bad the LL has been.

 

http://blog.painsmith.co.uk/2011/06/24/back-again/

[Ed999]

So, at this stage, my understanding is that there is no real case law as of yet for 213(5) - i.e. prescribed info, so this may be the only avenue of enforcing the three times deposit penalty.

 

Am I correct in my surmisation?

 

 

Actually, the Potts case deals with a claim under section 213(5): Potts v Densley

 

 

In Potts the tenant might have won if she had raised the point that the landlord had failed to provide her with the prescribed information pursuant to section 213(5) [see paragraph 56 in the Judgement].

 

She failed to do so. She based her claim solely on section 213(3) [failure to protect the deposit], and so lost the case. If a tenant mentions section 213(5) in a similar claim, he might win!

 

If the tenant sues DURING the tenancy, if the deposit hasn't been protected he needs to claim a breach of both section 213(3) [securing the deposit] and section 213(5) [provision of prescribed information]. If he claims only under section 213(3) he is likely to lose, just as the tenant lost in Potts, for the reasons you've mentioned.

Edited July 20, 2011 by Ed999

[Aequitas]

The legislation has been partly successful and partly a failure.

 

It has been a success in that many landlords are protecting deposits and tenants are getting them repaid when they are not at fault much more easily than they used to.

 

It has been a failure because if the landlord fails to protect the deposit the three times the deposit compensation is not payable unless the landlord is incredibly stupid or if the tenancy has ended.

[Ed999]

It has been a success in that many landlords are protecting deposits and tenants are getting them repaid when they are not at fault much more easily than they used to.

 

 

The difficulty is that this happy state of affairs has only come about because of the threat of landlords having to pay a hefty penalty - triple the amount of the deposit - if they do not protect the deposit as required by the Act.

 

Now that - as a result of Gladehurst - no penalty can be imposed on a landlord once the tenancy has ended, even if the deposit was never protected, we are thrown right back to the bad old days. The Act might as well have never existed. It is now a joke.

[Aequitas]

The difficulty is that this happy state of affairs has only come about because of the threat of landlords having to pay a hefty penalty - triple the amount of the deposit - if they do not protect the deposit as required by the Act.

 

Now that - as a result of Gladehurst - no penalty can be imposed on a landlord once the tenancy has ended, even if the deposit was never protected, we are thrown right back to the bad old days. The Act might as well have never existed. It is now a joke.

 

A good point. However, there is still a sanction because a landlord cannot serve a section 21 notice until the deposit is protected.