Tenancy Deposit Scheme Disputes
Landlord & Tenant
If a Landlord fails to protect a deposit with one of the government approved tenancy deposit schemes within 30 days of receiving it, then the tenant can apply to the county court. The court can order that the landlord repays the deposit to the tenant immediately and can also order that he or she pays up to three times the amount the deposit to the tenant in damages. This could potentially be a significant sum.
A Landlord would also be unable to serve a Section 21 (no fault) Notice to the tenant giving two months notice to regain possession of the property. This severely restricts the landlord’s ability to regain possession of the property. To try to avoid a damages award of up to three times the deposit the landlord should try to protect the deposit and provide the 'prescribed information' as soon as possible after missing the 30 day deadline. Doing this is likely to reduce any penalty imposed by the court.
A bigger problem caused by a failure to protect the deposit, is that a valid Section 21 eviction notice cannot be served. In practice, this means that if the deposit has not been protected, but the landlord wants to regain possession of the property by giving the tenant two months notice, this will not be possible. In such circumstances a Landlord has to repay the original deposit to the tenant before issuing a Section 21 notice. If the Landlord does this and providing that the Section 21 notice is valid then they will be able to regain possession of the property after giving the tenant the statutory two months notice.
For more information on serving a valid eviction notice see our tenant eviction page.