The Court of Appeal took a very heavy handed view of a residential landlord’s “minor omission” earlier this month. The landlord was ordered to pay the maximum penalty allowed by law (three times the rental deposit) for not supplying his tenant with full details of the deposit protection scheme he had used.
In the case of Ayannuga v Swindells , the tenant allegedly fell into arrears with his rent and the landlord applied to court to repossess the property. The tenant argued that the possession order could not be granted because the landlord had not fully complied with the legislation on tenancy deposits at the start of the tenancy.
The landlord had taken the deposit and protected it in one of the approved schemes but accepted that he had not given the tenant all the required information about the scheme as required by the Housing (Tenancy Deposits) (Prescribed Information) Order 2007.
The landlord argued that the deposit had been protected, that the tenant knew that it had been protected and knew which scheme it had been protected under. He said that the requirement to provide full details of the scheme was largely a technical one and that the tenant could very easily have found out anything he needed to know from the scheme’s administrator.
The judge at the first hearing agreed with the landlord and dismissed the tenant’s claim. The judge said that information in the tenancy agreement, coupled with the further information provided by the Landlord during the hearing, was enough to comply with the requirements of the law.
The tenant appealed. In their judgment earlier this month, the Court of Appeal sided with tenant. They said that the requirement to provide information was not a technicality but was of real importance as it told tenants how they could seek to recover their money and how they could dispute deductions using the scheme’s arbitration procedure. The Court ordered the landlord to pay the tenant compensation equivalent to three times the value of the deposit. He also forfeited the original deposit. Effectively a penalty of four times the deposit. Plus legal costs.
Whilst of course landlords should comply with the law, the decision to award the maximum penalty does seem unduly harsh. The deposit had been protected and the tenant clearly knew his legal rights; he does not seem to have been put at any disadvantage by not receiving the prescribed information. He could have found out anything he needed to know by contacting the Deposit Scheme itself, or by looking on their website. Or presumably by simply asking the landlord. Allowing tenants who don’t pay rent to benefit financially in this way surely sets a dangerous precedent.
Yes, of course the law should be upheld. But was there any need to come down on the landlord like a ton of bricks? Had the landlord simply kept the deposit himself he is likely to have come off no worse. It seems that landlords – like lawyers, journalists and estate agents - are fair game.