Anyone familiar with residential tenancies will know of the onerous duties placed on landlords to protect deposits taken from tenants. Once the initial window for compliance has passed, you cannot serve a valid Section 21 Notice and are automatically liable for a claim for a minimum of one and maximum of three times the value of the deposit. This is the case even if breach is only a failure to provide prescribed information about the protection scheme.
How many times can a tenant claim compensation for their deposit breach?
Recently, the Dartford County Court in Howard v Dalton raised a further issue by deciding that a tenant could receive compensation for each instance of breach. In this case, the failure to protect a deposit and a failure to provide prescribed information were treated as separate breaches, each giving rise to compensation. The result was that the landlord was held liable for a penalty of six times the value of the deposit (£1,745). To compound the landlord’s misery, the same breaches occurred on eight different tenancies, leading to a compensation award in excess of £83,000.
The landlord successfully appealed, with the Judge clarifying that a tenant was only entitled to compensation once for each tenancy. The Court commented that it was inevitable that a landlord who failed to protect the deposit also failed to provide prescribed information and that it was not the intention of Parliament to award a separate compensation in those instances.
As a County Court decision, this is not binding on future cases. However, it is likely to be persuasive and does provide some comfort in future cases of multiple breaches. Remember however that some breach(es) on multiple tenancies will still cost you dear so make sure that your processes (or those of your letting/managing agent) are correct and reliable.
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For more information on how Tozers can assist you in your lettings, please contact a member of the Property Litigation team on 01392 207 020.
