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westminster
12-02-2010, 15:57 PM
The first High Court judgment, therefore binding on lower courts, announced today.

http://painsmith.wordpress.com/2010/02/12/high-court-decision-on-tdp/
http://nearlylegal.co.uk/blog/2010/02/two-weeks-three-months-whatever-tds-in-the-high-court/

In a nutshell, it's okay to protect a deposit late with the DPS custodial scheme.

BUT there are some pending appeals so it's not the last word on the issue.

Moderator1
14-02-2010, 21:05 PM
All 'Coronation Street' posts have been eliminated from this RESIDENTIAL LETTINGS version of the thread.
See the TAKE A BREAK version for them: http://www.landlordzone.co.uk/forums/showthread.php?t=26158

moanygit
17-02-2010, 08:06 AM
Sorry, I can't access those websites from my work computer.

Is the jist of it that:
a) It's ok to lodge a deposit for protection late, but you may have to suffer a court appearance before you get the all clear?
or
b) Submitting a deposit for protection late will incur no procedure/investigation whatsoever? (i.e. as if it had been protected on time)

thanks

westminster
17-02-2010, 10:45 AM
Sorry, I can't access those websites from my work computer.

Is the jist of it that:
a) It's ok to lodge a deposit for protection late, but you may have to suffer a court appearance before you get the all clear?
or
b) Submitting a deposit for protection late will incur no procedure/investigation whatsoever? (i.e. as if it had been protected on time)

thanks

Option a). There is nothing to prevent a tenant issuing a claim. They just won't win it if the claim involves late protection with the DPS. Note that this only applies to the DPS - not the other two schemes - and it's still possible there will be an appeal.

Here's an extract from the first link. The parties were Draycott v Hannells Lettings Ltd.


Therefore... it was found that [Hannells] late lodging of that deposit with the DPS was not a breach of the Act or of the initial requirements of the DPS scheme and accordingly the appeal was allowed and the judgement against Hannells of the lower Court was set aside.

Therefore as things currently stand...late registration does not automatically attract the penalties set out in section 214, and the DPS scheme has no initial requirement that the deposit be registered with it within 14 days of being received.

This is by no means the end of the matter though. This case is still capable of being taken to the Court of Appeal and there are at least two more cases which will see judgements handed down from that Court within the next few months and they could have the effect of altering the position again.

jeffrey
17-02-2010, 10:51 AM
Here's the full report of Draycott v Hannells Lettings Ltd.: http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/QB/2010/217.html&query=title+(+Draycott+)+and+title+(+v+)+and+title +(+Hannells+)+and+title+(+Lettings+)+and+title+(+L td.+)&method=boolean

Note that the defendant which T sued was the Letting Agent, not L.

icedfusion
05-03-2010, 16:11 PM
Good day all,

I hope this has not been posted before, i did a quick search to see - however, this is good news for all Landlords being taken to court by a tenant for not protecting the deposit within 14 days:

Summary

If you do not put the deposit into a scheme within 14 days and the T takes you to court, so long as you put the deposit into a scheme by the time you go to court, you will only be liable for the court costs up to the time the deposit is put into the scheme.

The appeal document has the following details:

Neutral Citation Number: [2010] EWHC 217 (QB)

Case Number: IHQ/09/1118

The Honourable Mr. Justice Tugendhat

Between:
Michelle Draycott, Paul Maxwell Draycott (respondents)
and
Hannelss Letting Limited (appellant)

Hearing Date: 25th Janurary 2010

If anymore details are required, let me know and I will post them from the document I have.

Thanks

ice.

bsx043
06-03-2010, 00:01 AM
Having trawled through this and related forum I would like to ask a specfic question regarding tenant's deposit.

An agent manages my property and hold the tenant's deposit, which was taken in 2006, when the tenancy started. It has subsequently not been protected by the agent when the tenancy was renewed in 2007 and 2008. It is now a perodic tenancy. Am I liable in case of problems with the tenant? What action do I need to take to cover myself?

I am concerned because I am faced with the situation of evicting a tenant for rent arrears.

westminster
06-03-2010, 00:33 AM
Having trawled through this and related forum I would like to ask a specfic question regarding tenant's deposit.

An agent manages my property and hold the tenant's deposit, which was taken in 2006, when the tenancy started. It has subsequently not been protected by the agent when the tenancy was renewed in 2007 and 2008. It is now a perodic tenancy. Am I liable in case of problems with the tenant? What action do I need to take to cover myself?

I am concerned because I am faced with the situation of evicting a tenant for rent arrears.
If the tenancy is an assured shorthold tenancy, in England/Wales, with rent less than £2,083.33 pcm, and you're not a resident LL, then the deposit should be protected.

Protect it with the DPS, send T the prescribed info with proof of postage, and you are safe from non-compliance claims (in light of the high court case).

http://www.depositprotection.com/
https://www.depositprotection.com/public/documentlibrary/agentinfo.aspx

If you don't do this, you are exposed to a deposit non-compliance claim, and in addition any s.21 notice will not be valid if served before the deposit is protected.

bsx043
06-03-2010, 11:23 AM
Thanks, Westminster. My agent is clearly negligent here but unfortunately I have to face the buck by protecting the deposit now and issue a new s21 notice.

Foolishly, up to now I had thought that the agent should have done this when he renewed the tenancy in 2007. In reality, therefore, he still holds the deposit. I have posted elsewhere on this forum that I realised only last week when I collected all the documents from the agent that he had not protected the deposit. He advises me (verbally) that since the deposit was taken in 2006 it is not necessary to protect it. In fact, he served the Section 21 Notice on the tenant, so technically he is in the wrong here. Thankfully, I have realised just as I was about to submit the claim form N5b (claim for possession under accelerated procedure).

However, this leaves me confused about the actual procedure. In Form N5b, it states (7B(d)) that “if your claim for possession is in relation to an Assured Shorthold Tenancy where a deposit was taken after 6 April 2007, you must provide evidence that such deposit is safeguarded with a tenancy deposit scheme (TDS)....”. The agent says that this does not apply in my case, since the deposit was taken before this date and the new tenancy agreement has replaced the first tenancy agreement for the same premises and with the same landlord and tenant (clause 6 of the form applies). As far as I can see, there is nothing in form N5b that seems to indicate that my application would be invalid.

My question is: Can I go ahead now to claim possession having already issued Section 21 Notice (with 2 months already served), and also protect the deposit now? Or do I need to serve another s21 Notice (after protecting the deposit) before going ahead?

Put slightly differently, where does it say that s21 Notice is invalid without protecting the deposit that was taken before April 2007?

westminster
06-03-2010, 13:09 PM
He advises me (verbally) that since the deposit was taken in 2006 it is not necessary to protect it....

....My question is: Can I go ahead now to claim possession having already issued Section 21 Notice (with 2 months already served), and also protect the deposit now? Or do I need to serve another s21 Notice (after protecting the deposit) before going ahead?

Put slightly differently, where does it say that s21 Notice is invalid without protecting the deposit that was taken before April 2007?

There is no definitive answer to this because the meaning of "received" in the statute (see s.213 HA2004 (http://www.opsi.gov.uk/ACTS/acts2004/ukpga_20040034_en_19#pt6-ch4) for example) is open to interpretation, and there has not yet been a higher court decision on this particular issue.

One argument says that the deposit is deemed to have been re-taken/re-received when a new fixed term tenancy is signed. On the other hand, there's your agent's argument, that received means physically received. The statute also talks of deposits "paid" or "given" in connection with a shorthold tenancy. You see the problem.

The fact remains that some landlords have been ordered by county courts to pay the 3x penalty when the deposit has not been protected following renewal of a tenancy after 6th April 2007, hence it is advisable to do so. For example:
http://nearlylegal.co.uk/blog/2010/02/tenancy-deposit-renewal-of-tenancy-again/

I've never had to fill in a form N5b, so can't help you there - but it's possible that the tenant could argue the S.21 notice was invalid at the possession hearing, and I would imagine it's also possible the judge might accept the argument.

There is always the s.8 procedure if there are at least two months' rent owing and unpaid... Deposit protection not relevant to this procedure.

bsx043
06-03-2010, 16:16 PM
As long as my application for the accelerated procedure does not get rejected outright, I am prepared to take a chance making a case for possession on the s21 route, since the alternatives are more costly and uncertain. As far as I am aware, there is no hearing on the accelerated s21 route but I am uncertain about whether the defendant can issue a defence. Also, can the application be rejected outright in the light of my remarks above about not protecting the tenant's deposit? Any views on this, please?

About pursuing the s8 route, an argument is made in my other posting, also echoed by my agent, that this can be long-winded if T plays it out on financial hardship grounds by making small payments each month, which he has been doing (also his case for HB is now pending, thanks to my agent). There are in fact over four month’s rent now owing and unpaid, so I have a case on the s8 route grounds 8, 10, 11 but a notice has yet to be served and I don’t have all the facts, given my agent’s sloppiness on this matter.

My hopes are pinned on reclaiming possession on the s21 route but given the uncertainty wonder whether I can opt for the s8 route if it fails.

I have explained on another thread - Sloppy Agent and Troublesome Tenant -my circumstances if it helps – unable to directly post the link somehow.

westminster
06-03-2010, 17:49 PM
Here's your thread
http://www.landlordzone.co.uk/forums/showthread.php?t=26639

I know very little about possession procedure as I've fortunately never had to evict anyone. Most people on the forum seem to advise serving both a s.21 notice and a s.8 notice. As a s.8 notice on the grounds of 8, 10 & 11 only has to give 14 days notice (so I believe) I imagine you follow the procedure for that one first, then use s.21 as Plan B if that fails.

More info here:
http://www.letlink.co.uk/letting-factsheets/factsheets/factsheet-8-claims-for-possession-the-section-8-notice.html

I would guess that even with s.21 accelerated procedure the tenant would have the opportunity to defend it - the notice might, for example, cite the wrong section or give incorrect dates (though maybe the court checks that, not the tenant). Speaking of which, are you certain that the agent got the s.21 notice right; i.e. was it a S.21(4)(a) notice, giving at least two months, and seeking possession after the last day of a rental period (the periods commencing on the day after the last fixed term agreement ended)?

I'm going to post the question in nutshell form as most people will miss this thread because they think it's about the high court case. Also bear in mind that the forum is much less active at the weekend.

westminster
06-03-2010, 19:54 PM
And here's an answer for you.

http://www.landlordzone.co.uk/forums/showthread.php?t=26660

bsx043
06-03-2010, 22:01 PM
Thanks Westminster for your help and advice. I have been totally reliant on the agent who is adament to follow that S21 route. Do I have a case against the agent for getting me into this difficulty, I wonder? If I halt the agent now, I bear the losses. If I let the agent go ahead, I waste more time. Heads, I lose. Tails, lose.

On the techicalities of the s21 notice, seems OK. Perhaps the s8 route offers some comfort for recovery of arrears, and s21 again after protecting the deposit.

yai ling
02-06-2010, 15:09 PM
I have a question regarding the meaning of "to commence proceedings" in a TDP case.

Draycott v Hannels, Paragraph 54, states that "the outcome of this appeal turns on whether the 14 day requirement is, or is not, a part of the initial requirements of an authorised scheme. If it is not, then when the deposit is paid into the scheme later than 14 days from its receipt by the landlord, but before the tenant commences proceedings, then the court cannot be satisfied under s.214(2)(a), and therefore the court will not be able to make an order under s.214(3) or (4)." (Emphasis added)

What does it mean to "commence proceedings"?

Section 214 of the Housing Act, entitled "Proceedings relating to tenancy deposits", does not seem to explicitly define when proceedings start, but the first paragraph of this section states that "(1) Where a tenancy deposit has been paid in connection with a shorthold tenancy, the tenant … may make an application to a county court on the grounds...." (Emphasis added)

But.... an informal summary of Draycott posted on this forum defines the start the proceedings as the actual hearing date.


I am a tenant. In my case,

-- my deposit for an AST signed in June 2007 (i.e. after the TDP provisions of the Housing Act took effect, in April 2007) was not protected within 14 days of receipt;

-- nor was it protected when I filed my claim with the court in June 2008 (when I first learned about the TDP provisions of the Act);

-- nor was it protected when the defendant filed his defence and counterclaim (in which the LL said he would not protect the deposit) that same month.

-- nor was it protected when the LL made an additional filing in July 2009;

-- nor was it protected by the date of the hearing in September 2009, which the LL did not attend, and at which the judge ruled against the LL, ordering him to protect the deposit, to pay me 3x the amount of the deposit, and to pay costs;

-- nor was it protected, after LL failed to comply, when I served an Interim Third Party Debt order in October 2009 (which didn't work as the Landlord's account was overdrawn);

-- nor was it protected as of this morning, at a hearing where the Landlord asked to set aside the September 2009 judgement. The Landlord claims he did not attend the September 2009 hearing because he never received a notice of the September 2009 hearing date. The judge accepted that, with the postal service being what it is, this was plausible, and so has granted a new date for the entire case to be reheard in September 2010.

When, in this chain of events, for the purpose of Draycott v Hammell, do the "proceedings commence"?

To my mind they began when I filed the claim with the county court in June 2008, and if not then, certainly by the time the Landlord filed the Defence and counterclaim that same month.

But.... an informal summary of Draycott posted on this forum defines the start the proceedings as the actual hearing date. If this is true, LL might try to claim that proceedings have never commenced, and will only do so in September 2010, and so might try to avoid the penalty by protecting the deposit before the Sept 2010 court date.

Or would that be a strained interpretation, given that the LL clearly knew of my claim, and started filing things with the court as early as June 2008?

My quite competent solicitor agrees with my definition, but as there is a lot riding on this, I'd appreciate a 2nd opinion.

Any advice would be much appreciated.

Paul Gibbs
02-06-2010, 15:18 PM
Proceedings start when you have issued a claim at court. The court issues the claim, and allocates a claim number.

westminster
02-06-2010, 19:34 PM
Commencing proceedings and making an application to the court are the same thing, more or less. It's when the claimant applies to the court and the claim is then issued by the court. The proceedings culminate with a hearing.

Note that there were two further deposit cases heard at the Court of Appeal last month, the rulings yet to be announced, which may (or may not) overturn Draycott v Hannells, and may (or may not) clarify how the statute should be interpreted. See
http://blog.painsmith.co.uk/2010/04/30/more-key-tenancy-deposit-cases-come-to-court/

But in any case, it seems unlikely it will occur to the LL to protect the deposit after three years.

westminster
11-11-2010, 10:33 AM
http://blog.painsmith.co.uk/2010/11/11/court-of-appeal-rules-on-tenancy-deposit-protection/

Very interesting. The 3x deposit sanction does not apply when a LL protects a deposit late, so long as it's done before the claim gets to the hearing stage, even if it is against the rules of the scheme (i.e. the ruling also applies to TDS/MyDeposits).

The ruling did not consider what the position would be if the tenancy had ended at the time the deposit was protected.

jta
11-11-2010, 10:45 AM
This para. is very interesting


The Court further held that no scheme can impose an initial requirement that a deposit must be protected within 14 days, a failure to adhere to which will allow a tenant to claim against the landlord. Therefore the current imposition by The Dispute Service scheme of a requirement to register within 14 days is no more than an administrative requirement for that scheme and registrations with that scheme made after 14 days are not invalid for the purposes of tenancy deposit protection legislation although the scheme may consider them violations of its rules and may therefore adjudicate on the deposit in a manner that is against the landlord’s interests.


Does that mean that TDS and Mydeposits are going to have to change their rules?

Shivvy
11-11-2010, 11:17 AM
Yes, this is good news for me :D

Just breathing a huge sigh of relief...

Thanks for all your help on these issues.

I am now experiencing the incompetence that some have previously mentioned with the DPS, with being told by them at the beginning of the week that the T failed to provide any evidence in the 2 week deadline and a form would be sent out to me to transfer the deposit into my account, to today finding out that the T had sent them evidence in the form of an email (within the two week deadline), but it was lost in their administrative process!! Just waiting for a further summary now ... what a headache!

westminster
11-11-2010, 11:20 AM
This para. is very interesting
....Does that mean that TDS and Mydeposits are going to have to change their rules?

It'd be a nonsense if they didn't, as they can no longer say (as they currently do) that the protection is invalid if it's not done within 14 days.

I suppose, if late protection is just considered a 'violation' of the rules, then the scheme could impose its own consequences - maybe barring the member from future membership? I don't see how using adjudication against the LL (as seems to be suggested) would work - LL would just opt out and go via the county court.

I'm going to read the whole judgment and see whether it sheds any further light.

jeffrey
11-11-2010, 12:39 PM
Yes. Here's the full CA report: http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2010/1224.html&query=title+(+Universal+)+and+title+(+Estates+)+an d+title+(+v+)+and+title+(+Tiensia+)&method=boolean
This is the most significant part of the judgments:

It will be an unusual landlord who will not, faced with a section 214 claim, ensure that by the time of the hearing he has fulfilled his outstanding obligations under section 213, with the consequence that in practice section 214 will be likely only to bite in the most exceptional and unusual cases. I recognise all of that. Equally, however, it can also be said that in that overwhelming majority of cases the net result will be that the legislation will have achieved its primary objective, that of the due protection of the tenant's deposit. What more can reasonably be asked of it?

jjlandlord
11-11-2010, 13:01 PM
Reading through the CA report as provided by Jeffrey, there are a few points that are important (if I understand correctly):
1. s.21 notices cannot be served until deposit is protected,
2. if L protects deposit as a result of a claim by T, T may still expect to be awarded costs by the court.

If correct, these are two good reasons to protect the deposit promptly imo.

jeffrey
11-11-2010, 14:01 PM
Reading through the CA report as provided by Jeffrey, there are a few points that are important (if I understand correctly):
1. s.21 notices cannot be served until deposit is protected,
2. if L protects deposit as a result of a claim by T, T may still expect to be awarded costs by the court.

If correct, these are two good reasons to protect the deposit promptly imo.
Yes- but your point 1 is not a result of the CA decision; it's in fact statutory! See s.215 of the Housing Act 2004 below:

215. Sanctions for non-compliance

(1) If a tenancy deposit has been paid in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy at a time when:
(a) the deposit is not being held in accordance with an authorised scheme, or
(b) the initial requirements of such a scheme (see section 213(4)) have not been complied with in relation to the deposit.

(2) If section 213(6) is not complied with in relation to a deposit given in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy until such time as section 213(6)(a) is complied with.

(3) If any deposit given in connection with a shorthold tenancy could not be lawfully required as a result of section 213(7), no section 21 notice may be given in relation to the tenancy until such time as the property in question is returned to the person by whom it was given as a deposit.

(4) In subsection (3) “deposit” has the meaning given by section 213(8).

(5) In this section a “section 21 notice” means a notice under section 21(1)(b) or (4)(a) of the Housing Act 1988 (recovery of possession on termination of shorthold tenancy).

ftgpmb
11-11-2010, 21:36 PM
I've often wondered about the schemes imposing "rules" ... and then allowing them to be broken. Surely the act of receiving a deposit after the so called 14 day limit means de facto it is not a rule?

jeffrey
15-11-2010, 17:01 PM
I've often wondered about the schemes imposing "rules" ... and then allowing them to be broken. Surely the act of receiving a deposit after the so called 14 day limit means de facto it is not a rule?
Wrong. It's a rule; it's meant to be obeyed; and there are sanctions for failure. What more do you want?

westminster
15-11-2010, 17:06 PM
I've often wondered about the schemes imposing "rules" ... and then allowing them to be broken. Surely the act of receiving a deposit after the so called 14 day limit means de facto it is not a rule?
There is no 14 day limit to receiving a deposit. When a LL receives a deposit, he has 14 days as from the date of receipt in which to protect the deposit.

marcusw
15-11-2010, 21:58 PM
from a tenant's point of view, I have just moved from a property where I was a tenant for 2.5 years (moved in may 2008), 16 months into the tenancy I received a letter one day informing me that the deposit I paid was now with mydeposits, though for the wrong amount which they corrected when I pointed it out. Now I was unaware of the legal requirements for landlords and was only when my landlord started getting a bit nasty when I told him that I was leaving and started getting edgy about my deposit that I came across all this stuff, is maddening when you have been a good tenant that they can so disregard the law, am coming up to the 10 days to get my deposit back and do not feel one bit confident

Blackcatgirl
16-11-2010, 13:42 PM
http://blog.painsmith.co.uk/2010/11/11/court-of-appeal-rules-on-tenancy-deposit-protection/
The ruling did not consider what the position would be if the tenancy had ended at the time the deposit was protected.

My case is exactly that point. I am still waiting to know whether I have been granted leave to appeal in the High Court, London. Application made to appeal in July 2010...

Blackcatgirl
07-02-2011, 13:10 PM
I am in the High Court on the 9th February.

Lawcruncher
13-02-2011, 17:04 PM
I have just read the judgement. I have to agree with the dissenting judge who said he found it difficult to believe that Parliament intended the effect that a strict interpretation achieves. Even one of the non-dissenting judges said he regretted the conclusion reached by the majority since "it means that landlords are not disciplined as Parliament must surely have intended".

Nimbus2000
15-02-2011, 23:04 PM
I have just read the judgement. I have to agree with the dissenting judge who said he found it difficult to believe that Parliament intended the effect that a strict interpretation achieves. Even one of the non-dissenting judges said he regretted the conclusion reached by the majority since "it means that landlords are not disciplined as Parliament must surely have intended".

Well, if after all is said and done, the deposit is protected under one of the schemes, the tenant will have achieved that protection and can be secure in the knowledge that he has a fair and impartial party handling the money when it comes his/her time to move out and seek the return of the deposit. What does it really matter when the landlord protected the deposit? In fact, as other posters have pointed out, Landlords put themselves at a disadvantage re S21 Notices and so forth unless the deposit has been protected. From the tenant's point of view, it really makes no odds until the tenant needs to vacate and tries to get that money back....

Blackcatgirl
05-05-2011, 14:54 PM
As a tenant it matters when the deposit was 'protected'...
I say that because my deposit money was paid into a scheme AFTER I started Court proceedings (expensive) and AFTER the tenancy had actually ended. The reality is, that by paying in the deposit a month after the tenancy has ended I had no access to free arbitration services, and the scheme owners stated that I needed a Court Order to decide whether the Landlord or myself as the tenant 'owned' the money! After 11 months I got a Court Order for the return of my deposit money, but no costs (and no penalty either incidentally)
Judgment from the High Court appeal I made is being given tomorrow.

jeffrey
05-05-2011, 15:39 PM
Q: can a deposit be protected late?
A: yes, definitely, IF the tenancy is still running.
The problem is whether a deposit can be protected after the tenancy has ended. I guess "no"; but we'll wait/see.