Deposit dilemmas
Is the tenancy deposit
scheme unravelling?
Our legal experts
explain the issues and
dangers to agents.
ince April 2007 residential
S
landlords have been obliged to
protect deposits received from
tenants who have taken on
an assured shorthold tenancy
agreement. The aim of the
legislation is to protect tenants from unfair
deductions, to ensure deposits were
returned – and promptly – to the tenant.
However, as tenants become ever more
aware of their rights (which is not, of course,
a bad thing) court action regarding the
management of these deposits is becoming
more widespread. Some of the decisions
made in these cases indicate that there may
be issues with the legislation and how the
courts can deal with such cases.
An unhappy tenant may take not only
his landlord to court, he may take action
against the letting agent – without a good
Professional Indemnity policy would you
be able to defend yourself?
Legal experts Laura West and
Marianne Rivett report here on a few of
the cases recently brought to court.
The requirements of the compulsory
tenancy deposit scheme are set out in
Pt VI, Chapter 4 of the Housing Act 2004
[HA 2004]. Within 14 days of receiving
a deposit a landlord must, pursuant to
s 213(3), comply with the initial
requirements of one of the authorised
schemes (two being custodial, one
insurance backed). Neither “landlord” nor
“tenant” is defined for the purposes of the
scheme. Additionally, pursuant to s 213(5),
a landlord who has received a deposit must
give to the tenant and any other “relevant
person” (defined in s 213(10) as any person
who has paid the deposit on behalf of the
tenant) certain prescribed information as
set out in s 213(5) HA 2004 and the
Housing (Tenancy Deposits) Prescribed
Information) Order 2007 (SI 2007/797).
48 FEBRUARY 2010 PROPERTYdrum
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