Our recent article explained how the existing law in relation to tenants’ deposits changed as of 6 April 2012. One of those changes was that, if a Landlord fails to register a tenant’s deposit, or provide the tenant with prescribed information about their deposit, within 30 days of receipt, a Court may order the Landlord to repay the deposit to the tenant - plus a further one to 3 times the amount of the deposit. This second part is entirely at a Judge’s discretion.
The question of how a Judge may decide whether a Landlord should have to pay one or three times the amount of the deposit is not addressed in the new law.
However, a local Judge with extensive experience in Housing Law, has recently offered some guidance.
In considering the extent of the penalty to be applied, the Judge must take into account all of the circumstances surrounding the case. Particularly, the Judge is likely to consider the following factors:
- What is the Landlord’s reason for failing to comply with the deposit requirements?
- How many properties does the Landlord own and let?
- Was the failure due to the act of a third party, e.g. a letting agent?
- Did the Landlord know of the requirements but deliberately choose not to comply?
- What is the effect of non-compliance on the tenant?
The Judge has suggested that those Landlords with extensive portfolios and who clearly operate a professional lettings business will most likely attract the heavier penalties for non-compliance.
In reality, until these cases start reaching the County Courts, we will not have a clear picture as to how these penalties will be decided.
Prevention remains the best option – ensure that your tenants’ deposits are registered and that the prescribed information is served!
If you have any queries, please contact the Emsleys Housing Law Team on 0113 260 3115.Back to Blog