Tenancy Deposit Protection - First High Court Decision

[Aequitas]

...have a weak grasp of

 

Hey! I claim copyright in that phrase!

[Webranger]

Aequitas: Thank you for a well-reasoned contribution. The only disagreement that I can have with it is to say that once we wander off the firm ground of what Parliament actually passed onto "the intent of the Act" we are in a quagmire.

 

I have said repeatedly that the intent was to protect tenants, not only from losing deposits but also from the uncertainty of knowing that they would not lose it when the tenancy ended. I doubt if you will disagree with that. It's when people try to expand that intent that we are in the mire.

 

I have added that it was not the intent to provide a stick with which to beat landlords. Justice Tugandhat took the same view, but others clearly disagree with that. I don't know what evidence there is to say that WAS the intent of Parliament.

 

You say, "The intention is not to give a windfall to a tenant, but rather to encourage compliance with the law," with which I entirely agree, but you go on to say, "the fact that a tenant who suffers no loss makes a gain is no more than an outcome of imposing a sanction on the landlord" which raises big questions of equity. If we are going to take this line, then we MUST stick very closely to what the Act said, not what people think Parliament meant it to say.

 

Judge Tugandhat referred to " a long-standing presumption against doubtful penalisation," and this legislation introduces something completely new to English law - what I have called a "fine" but you have better referred to as a "civil penalty." There are other civil penalties, certainly, but they are set by governmental bodies such as Companies House, and there are "damages" awarded for many things, even footling ones, but this is uniquely a civil penalty paid to a private citizen who has suffered no damage.

 

At least, that is the situation if we take your interpretation, and it can immediately be seen as undesirable, whereas in my interpretation the civil penalty is only applied where there IS damage - the uncertainty of whether the deposit is safe. You must surely admit that my interpretation is in accordance with the whole tendency and understanding of existing English law.

 

You say, "I think the correct approach is to interpret the Act having regard to the mischief it was intended to prevent; the mischief was the unjustifiable retention of tenancy deposits by landlords and their agents," and that highlights the danger of interpretation that goes beyond the words written, because in interpretation we use emotive words to make a point. The Act doesn't say that it was "intended to prevent a mischief," it was for the protection of deposits - you see how the change of a single word can warp the whole interpretation?

 

The wording of S.214 (3) and (4) is quite clear so you cannot expect courts to make an order that someone who does not hold a deposit should pay it to tenant or scheme. You have to say that the Act is so badly drafted that we have no alternative but to go along with exactly what was passed and hope that some day Parliament will pass something that makes more sense.

 

What that something should be is a scheme that says tenants must pay the deposit into a scheme which will provide a guarantor certificate (bond) which a landlord MUST accept as in lieu of deposit. How simple, how straightforward, tenants and landlords both protected!

[Aequitas]

I think it is patently obvious that the Act does impose doubtful penalisation. The Act says in section 214 (4):

 

The court must also order the landlord to pay to the applicant a sum of money equal to three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order.

 

That subsection only makes sense if there are circumstances in which an order can be made.

 

The Act is clear to the extent that if certain conditions are met then compensation must be paid. The problem is deciding when those conditions are met. It cannot possibly be the case that the Act provides for compensation, but makes it impossible for the conditions for the compensation to be met.

 

The provision that a tenant or anyone else may be entitled to compensation when he suffers no loss may be unique, but that does not stop the clear words of the Act. Parliament is supreme and can legislate how it wants. If the conditions are fulfilled the compensation must be paid – no discretion is allowed. It seems to me here that it is you who is wanting to look outside the statute to decide what it means!

[Webranger]

There is very little between us, really.

 

The point about "doubtful penalisation" is that a court must be very certain that a penalty is clearly authorised by legislation in the particular circumstances that pertain, which is why my insistence on what the Act actually says is more applicable than your wish to interpret the "intention" of the Act.

 

I totally agree that if the conditions are met then the penalties must be applied and that Parliament is supreme (or should be but isn't because of the EU) and that it can legislate what it wants. But "what it wants" can only be determined by the words it authorises, not by someone thinks it meant.

 

So I am definitely not trying "to decide what it means." My central point is that there must be "a person whom it appears to the court is holding the deposit" before any payments or penalties can be imposed because that is what the Act says.

[Aequitas]

....Parliament is supreme (or should be but isn't because of the EU)

 

Untrue. EC regs may become part of the UK law but they do so by the courtesy of Parliament. Parliament remains supreme.

 

My central point is that there must be "a person whom it appears to the court is holding the deposit" before any payments or penalties can be imposed because that is what the Act says.

 

That is a different point that we have discussed elsewhere, though I cannot remember where for the moment.

[Josie8]

My niece rented a flat and paid £750 deposit. Deposit scheme is mydeposits.co.uk. Been there two years. Niece decides to move on and gives a months notice. She's had a few issues with landlord.

 

Receives email from landlord on 14th July saying must pay last months rent and deposit will only be returned after she moves out on production of receipted utility bills etc. Next months rent not due till 19th July.

 

Fair enough.

 

She received letter from my deposits advising her that the deposit was now unprotected from 14th July - reason given was renewal of tenancy??

 

She thinks if she pays rent on 19th Landlord is going to withold deposit. There was no inventory signed when she moved in and its a basic ast.

 

Should the deposit still be protected ? Any advice gratefully recieved x

[Webranger]

Crucially you haven't given the date upon which she gave notice.If it was after 19th June, then LL was right, she must pay 19th July rent. Then he will repay deposit on checking condition of flat plus situation with utilities. Notice has to be given for at least one month before a rent due date - not just anywhere in the month.

 

However, LL was wrong to unprotect deposit at this stage. Tell niece to ring and then write to mydeposits telling them to reprotect deposit until niece has confirmed agreement.

[Kentish Lass]

The deposit protection legislation is the most appalling piece of drafting and whichever first year trainee did it should be shot!!

 

And why doesn't Danielr pay by standing order. Saves having to even think about it!!

[willie nelson]

wow, when i started reading this last night i thought i'd find a decision at the end! so really is there still nothing definite to go on? when can it be expected?

i'm just starting to see how the law works, and am starting for the same reason as many people, a pain in the neck landlord that did not protect the deposit and now doesn't want to return all of it, so i'm gonna see if i can get it back plus some....

sorry i'm new here... could someone direct me how to start a new thread where i could discuss my particular case, and where best to start, please?

[Webranger]

Go to Residential and Commercial Lettings - The Consumer Forums and click New Thread but you may get more attention here.

 

Assuming that you have not yet moved out, I suggest that you write to LL immediately informing him that he is in breach of Housing Act 2004, Section 214 and you will take court action to regain deposit plus 3 x deposit if he does not immediately agree to pay you deposit in full when you do leave.

 

Of course, he may have valid reasons for withholding some of deposit but his failure to protect deposit puts him in a vulnerable position so that would be a just result.

 

On the other hand, if your tenancy started before April 2007 he didn't have to protect deposit. Make sure you have all your facts right, including did you give one month's notice from a rent due date? In fact, when you post here asking for advice, make sure you give full data and dates, otherwise you can be given advice based on misunderstanding.

[willie nelson]

ok, thanks webranger, as brief as possible with all details, if someone prefers me to post elsewhere please say so:

tenancy started feb 15th 2010, signed ast for 3 months, stayed til july 9th, offered 1 month noticed from june 9th, which was accepted by landlady. moved out then waited a week without hearing anything, so we sent text message asking when we could expect return of £780 deposit. this was ignored.another text message sent 12th asking got reply saying she was on holiday will do it the next week (this week beginning 26th july). i said that that isnt really good enough as she's had plenty of warning, it's our money etc. if she had it protected we should get it within 10 days (which i belived at the time is this true?) she replied angrily that it would be next week and she'd be taking of money for a broken kettle and "unusable mattress" without stating how much.. i replied pointing out she could get in lots of trouble for not protecting the deposit if we so chose and that she should pay money into my account or inform me a cheque was in the post by close of business friday or i would seek legal advice. she replied even angrier that i better not ry that after my behaviour (not sure exactly what she means, I did tell her to shut up once when she was shouting at me on the phone, and tell me that this was harrassment even though it was her called me!) and added that she would sue me for harrassment if i contacted her again.

this is for a few months a non functioning relationship. i have (generously, i think) warned her several times that she has not protected our deposit and that she should back off from what amounted to (illegal) threats of eviction, and threats of entry without our consent, with she believes is justified because she thinks i have been obstructive to various people related to her selling her house (which is untrue), and from what i've read irrelevant, but i'm just trying to give you background. there is no signed inventory, she emailed an old inventory pdf from previous tenants saying it'll do, a month after we moved in. i hardly looked at it. certainly didnt sign it.

i'm sick of her and now, and think it's time to deal with this through the courts, should i write to her or fill out the claim form now?

thanks for any advice, your forum is great

[willie nelson]

sorry webranger did i post a reply to you and not onto the forum? i dont see it up...

[willie nelson]

oops! there it is. sorry everyone... i'll work it out.

[Webranger]

WOW! The trouble with texting is that it so so ephemeral. Even keeping it saved is difficult, I don't know if it is possible to print out. My point being it is difficult to use as evidence, probably impossible.

 

SO, write a letter, first class recorded delivery, saying that you have received legal advice that if you take court action a court will order her to pay you a total of £3,120 plus costs and if you have not received your £780 in full by this Friday you will commence the court action next Monday morning.

 

Let us know what happens. If she telephones or texts, ignore her.

[willie nelson]

the last communication saying return deposit by last friday (23rd) i sent as a pdf by email as well as a text telling her to check her email urgently which i sent thursday 22nd. she wont speak to me on the phone anymore hence text conversations.

at one point getting my deposit was all i wanted. now i've run out of patience so think why shouldnt i go for the lot if i've got to start this. i've given her, i think, three warnings about the tenancy deposit scheme just so she stops causing trouble, and she responds that i shouldn't threaten her. i really thought she would just like to end this as easy as possible, and now i have no sympathy at all. we cleaned the flat well, the kettle worked but has a dodgy connection from the beginning which died after a couple of months so we put it away and used our own, and i didnt even notice the mattress when we left, it was already and old mattress and all we did was sleep on it for 5 months! if it was less than 5 years old i'd be surprised. anyway that is beside the point, isn't it?

is there any reason why i should write just asking for £3120 or i'll file a claim and she might have to pay costs as well?

presumably one month notice that she accepted by email isn't a problem even when it's not rental period month ie 9th june til 9th july, not 15th til 15th (or for that matter 9th - 15th)... it's an entirely seperate issue isn't it?

thank you

[Webranger]

It's up to you, but my advice stays the same, write that letter and get it off today. If she doesn't pay up, carry out the threat. But you cannot demand the £3,120, that is for a court to award. As I have written elsewhere, court action is expensive, time-consuming, emotionally destructive, and very uncertain.

 

The extra £2,340 is a siren song and you may hit the rocks trying to get it, settle for the deposit if you can get that.

[willie nelson]

hmmm.. i can see you dont really approve of the 3x compensation, webranger, and yes it's pretty harsh but that's the law....

anyway, isn't my pdf letter sent as email attachment last thursday as valid as a 1st class recorded delivery? and she is therefore already warned...and her reply is basically: "do what u like" or wait til (unspecified day) next week (ie this week) for partial return with (unspecified amount) deductions. i told her that if i didnt receive the money or assurance by the end of the next day (which seemed reasonable, is there a requirement for 7days or something?) i would take legal action, if i write another doesn't that make it look like empty words or just a bit pointless? isn't it now time to make a claim, or wait and see how much i get on some day this week, she's told me not to contact her again! i have no idea what's going on!!

[Webranger]

As I said, it's up to you but I'm suggesting that you cover yourself fully so she can't claim that she didn't receive the email, etc. etc. You've nothing to lose except a bit of postage and a few days delay, and you will be able to show the court how reasonable you were and how much chance you gave LL.

 

It's not that I don't approve of 3 x penalty for really recalcitrant LL's, they do deserve it, but look at the posts of Blackcatgirl on another thread in this forum and you will see how it is possible to come a cropper. I'm just urging caution.

[willie nelson]

yeah thanks, but i guess what it comes down to now she's really annoyed me and in fact legally she can never now comply with the requirements of the tds, whatever she decides to do! even if she does repay the full deposit today.

[willie nelson]

hi, new development today, but i don't want to hijack this thread so i have started a new thread "not returning deposit, deposit not protected". please read through this i would really appreciate some advice...

thanks so far

[willie nelson]

and sorry one important question is

it doesn't matter that when she offered to protect the deposit i didn't insist that she did, does it?

i could post the email and reply if you need to see the wording. someone told me that that just show that she was fully aware of the law and used me to reach an agreement not to comply......

thanks again

[danielr]

And why doesn't Danielr pay by standing order. Saves having to even think about it!!

 

Ahh, you miss understand. I do pay by standing order. The estate agent misallocated a payment back in march. So as far as the estate agent was concerned they thought that we'd paid no rent in march. Sent a letter in April saying we were behind on our rent. Then our rent for April goes out and they think it's for march. So come may they send us a letter saying we haven't paid for may. So imsent them an email detailing all our payments. They replied acknowledging that they'd found the money and everything was fine.

And it was until June when we get a letter saying that we haven't paid again, we're behind on our rent and we'll be liable for a cost of £25 per letter, also telling us that the landlord has sought legal advice and was about to start proceedings for getting us out of the house.

 

It turns out that our estate agents had been happy to copy the landlord in to all communication from them to us that we weren't paying rent. But conveniently forgot to let the landlord know hat we were ok...

 

Well, after my last email to them, which included my email from the month before detailing our payments, and their positive confirmation of this. Scans of bank statements showing our payments. A polite refusal to pay the charges for their letters sent in error. A suggestion that if they are having IT troubles that they should double check their payments before contacting us, and the suggestion that the landlord may do well to reclaim any solicitors costs his far from them (since we'd confirmed that our rent was up to date less than 30 days before the last letter)...

 

Strangely we've not had any more letters from the estate agents since then.

[willie nelson]

so is there any high court decision yet? why does it take so long?

[Webranger]

Yes, there was a High Court decision, that's what this thread is supposed to be about. I think you mean, is there an Appeal Court decision yet? You'll find the latest at http://blog.painsmith.co.uk/2010/08/16/universal-estates-v-tiensia-where-is-it/

where it reads:

 

Universal Estates v Tiensia- Where is it?

 

The two conjoined appeals of Universal Estates v Tiensia and Honeysuckle Properties v Fletcher were heard by the Court of Appeal on 7 May 2010. These are both appeals relating to the tenancy deposit protection provisions introduced by the Housing Act 2004.

 

The judgement has been reserved and we are informed that further questions were asked of the various parties involved fairly recently. As the Court of Appeal is now in recess until 1 October there is now unlikely to be a any decision in these key cases until after that date.

 

What aspects of the legislation those cases deal with I have been unable to discover.

 

Why does it take so long? Oh, boy, what a question. Have you read Charles Dickens about the slow grinding oppression of the law? I tell you, in 150 years, it ain't changed!