Tenancy Answers - Claiming for deposit non-protection
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Important Note - this page does not apply 

to tenancies that ended before April 2012

If your tenancy ended before 6th April 2012, please see here.

Claiming compensation for deposit non-protection

Claims under section 214 of the 2004 Housing Act (as amended)

The Housing Act 2004 (amended by section 184 of the 2011 Localism Act) introduced the concept of "Tenancy Deposit Protection" with regard to AST tenancies and obliges landlords to protect/register all tenancy deposits with one of 4 approved schemes within 30 days of the deposit being paid.  The penalty for failure to do this, or provide details of the protection (called 'prescribed information') is that the court has to order the return of the deposit and in addition a payment of up to three times the value of the deposit.
 
Such a claim must be made by 'the tenant'.  If yours was a joint tenancy then all the joint tenants must be claimants.
 
If your tenancy was arranged/managed through an agency and you paid your deposit to the agent then you can claim against both the agent and landlord jointly.
 
The penalty was formerly "3 times the deposit", now it is between one and three times the deposit.  Where a landlord has made some attempt to reduce the impact of his failure on the tenant (perhaps by protecting as soon as he became aware of his omission) then one would expect the court to award a lower penalty. 
 
The recent court case of Superstrike Ltd v Rodrigues in the appeal court held that a specific tenancy that had begun before the deposit protection rules were introduced needed to comply with sections 212 to 215 because a new tenancy had been created once the fixed term ended (after April 2007).  It is feared that the courts could find that although a deposit scheme may continue to protect a deposit from a fixed term tenancy into a new statutory periodic tenancy, the landlord will not have complied with section 213(5) if he does not re-serve 'prescribed information' within 30 days of the commencement of each tenancy.  At the time of writing, this is merely supposition, but tenants should check with a legal professional as failure to comply with section 213(5) also gives rise to the same penalty.

Aside from that, section 16 of the Localism Act 2011 (Commencement No. 4 and Transitional, Transitory and Saving Provisions) Order 2012 could be read to imply that any deposit relating to an AST tenancy that was in existence on 6th April 2012 (even if it pre-dates the 2004 Housing Act) must be protected in line with the requirements of the act.  The wording is not specific, it merely implies that, and until a higher court has to make a judgement, the meaning of this section will remain uncertain.

16.—(1) Subject to paragraph (2), the amendments made by section 184 of the Act apply in respect of any tenancy deposit received by a landlord in connection with a shorthold tenancy where the tenancy was in effect on or after 6th April 2012

Civil Procedure Rule 56.1(f) defines section 214 deposit protection claims as 'Landlord & Tenant Claims' and practice direction 56.2 (para 2.1) states that 'landlord & tenant claims' have to be dealt with as a 'Part 8' claim.  Part 8 claims have to be submitted on a different claim form (N208) and will be allocated to the "multi-track" (CPR rule 8.9(c)) not the "small claims track".
  1. The claim is much more complex - most litgants will require the services of a solicitor
  2. The claim is much more expensive - the court fees alone to get the hearing to court are in excess of £1000.  Current court fees can be found here, the items a claimant would expect to pay would be the application fee, the allocation fee, pre-trial checklist and the hearing fee.
  3. The losing party may be ordered to pay the other partys solicitors costs etc (solicitor - £170/hr?)

However, presuming the tenant is the winning party then the landlord is likely to be ordered to refund to the tenant most or all of his/her solicitors costs and court fees.