Failure to comply with statutory tenant deposit requirements results in failed s. 21 possession notice

Ref. Charalambous v Ng [16 December 2014]

In this case, the Court of Appeal has found in favour of a tenant whose deposit was not adequately protected under the statutory requirements of the Housing Act 2004, rendering the landlord’s section 21 notice void.

When the tenant first took residence of the property in 2002 and paid a deposit of £1,560, the statutory requirements of the Housing Act 2004 with regards to deposits had not been conceived. The tenancy expired and was renewed a couple of times, with the deposit being carried over and credited against the new tenancy. When the last tenancy expired in 2005, a statutory period tenancy took over and occupation continued.

Seeking possession in 2012, the landlord issued a notice under s. 21 of the Housing Act 1988 requiring the tenant to give up possession.  At this stage, however, statutory regulations had been introduced by the Housing Act 2004 and implemented with effect from 6 April 2007.

Specifically, any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme – like the DepositProtectionService, MyDeposits or Tenancy Deposit Scheme.

Where the landlord has not complied with the details of the scheme within 30 days of receiving the deposit, no s. 21 notice can be validly issued, unless the deposit is first returned to the tenant in full or with agreed reductions.

Thus, whilst no lease renewal actually came after the statutory requirements were in force, the Court still found in favour of the tenant – making it abundantly clear that any landlord holding a deposit outside of an authorised scheme, regardless of the lease details, will suffer the same consequences.

In this case, the notice was rendered void and the landlord was not able to gain possession.

A strong lesson for landlords, therefore, and any whose tenancy protection processes are out of date should make this a priority before the courts stand in their way of removing a tenant.

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SRJ                                                                                                                                              01.01.15

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