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Michelle Hearne

Solicitor - Brighton & Hove

3rd August 2012

Tenancy Deposits

Landlord saving money

Landlords beware! Strict rules apply when receiving a tenant’s deposit. Section 213 of the Housing Act 2004 provides that you must protect the tenant’s deposit by placing it in an authorised deposit scheme within 30 days from receipt of the deposit (Section 184 if the Localism Act 2011 extends the time period from 14 days until 30 days). Relevant information about the scheme must be given to the tenant within the same period of time.

What are the consequences if you fail to comply? Firstly, the Court must order you to pay the deposit to the tenant or into custodial scheme. Secondly, the Court has discretion as to the penalty you will be required to pay, but it will be no greater than three times the value of the deposit. Thirdly, a Notice under Section 21 of the Housing Act 1984 may not be served unless the deposit has been refunded in full, or less any deductions if agreed, or if the tenant has brought a claim which has been determined by the court, withdrawn or settled.

If you need to discuss this or any other dispute resolution related issue please feel free to contact the author, Michelle Hearne here.

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