Step by step guide to claiming a deposit protection penalty

by | Jun 14, 2020 | Safer Renting

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I wrote recently about the different scams employed by rogue landlords to steal tenant’s deposits.

In this piece I will explaining the procedure tenants use to recover their money and more.


Deposit protection regulations, requiring the landlord to protect the deposit within 30 days of receiving AND serve “Any relevant person” with the prescribed Information of the scheme being used can prevent a landlord from serving a notice under s21 of the Housing Act 1988, the most commonly used type of notice.

A landlord cannot serve a s21 where they have breached these regulations until they have either returned the deposit to the tenant or, in limited cases, protected the deposit albeit late.

The phrase “Any relevant person” is clarified in s 213 (10), of the Housing Act 2004 “A person who paid the deposit on behalf of the tenant”.

It is common practice these days for many local authority homelessness units to pay deposits either in discharge of the full housing duty (s193 Housing Act 1996) or in the increasingly popular practice of advising homelessness applicants to source their own accommodation and the council will pay rent in advance and deposit.

This makes the council a “Relevant person”, so if the landlord serves the tenant with the prescribed information but not the council also, this will invalidate the s21.

Note however that this is only where the council actually pays the deposit for the tenant. It doesn’t apply where there is a bond scheme in place, guaranteeing the deposit in the event of a breach and it doesn’t apply if the council give the money to the tenant to pay it themselves.

If you have a subscription to Legal Action magazine or Lexis you can find the slightly obscure case of Coppard v. Barrington (2017) where the county court addressed just this point where the tenant’s mother gave money to her son to pay the deposit and tried to mount the case that this made her a Relevant Person.

The court disagreed, saying she had not actually paid the deposit on behalf of her son but had merely lent him the money, which is not the same thing.

Councils paying deposits as part of their scheme should bear this in mind.

Deposit Protection Penalty.

Failure to comply with both requirements to protection the deposit AND serve the prescribed information, leaves the way open to tenants to seek the return of their deposit and a penalty of up to three times the amount of the deposit for a period up to 6 years of the breach arising.

To do this you first need proof of the breach. There are three deposit protection schemes where it might be:-

·         Deposit Protection Service (DPS) – 0330 303 0030

·         Tenancy Deposit Scheme (TDS) – 0300 037 1000

·         MyDeposits – 0333 321 9401

 The tenant can call each one and find out if they have it registered and if they do, what date it was registered, bearing in mind that there is a 30 day limited, so even if protected but its outside the 30 day limit that still leaves the landlord open to the penalty for late compliance.

In my experience the schemes, while perfectly friendly and helpful, wont give anyone who is not the tenant, information on this but the tenant can request email confirmation from them which can be used as evidence..

Even if the tenancy agreement states it is protected with a particular scheme, still check with the scheme to see if this is true.

Checking whether the tenant was given the prescribed information is less clear when dealing with rogues. As mentioned in the previous article statutory instrument No. 797 HOUSING, ENGLAND & WALES The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 sets out exactly what should be in the prescribed information for it to be valid.

Tenants may have lost this paperwork or not remember getting it and rogue landlords are quick to provide previously non-existent copies once they realise the importance of them.

Be awake to that possibility.

Once you have such proof, along with proof that a deposit was paid, it necessary to make the application to court using a form N208, which can be found here.

It is a fairly simple form to fill for once and only requires a short statement of facts and copies of the emails from the three schemes that they don’t have the deposit or that it was protected outside of 30 days.

Costs of registering the claim is £308 which is recoverable if the claim is successful but bear in mind that if the tenant is on benefits or low income they may be entitled to fee remission, which requires filling in a form EX160 and submitting this with the claim. An EX160 can be found here.

The process is reasonably straightforward and can be done by the tenant without having to source a lawyer and if doing it themselves they are allowed to have a helper sitting in as a McKenzie friend, who is not allowed to address the court directly but who can be there to support and advise.

When considering whether to order 1 X the deposit as a penalty or 3 X the deposit the courts will take into account the level of culpability of the landlord.

If the landlord makes the case that they didn’t know or that they thought their agent was going to do it, then the penalty might be in the lower bracket but if there is evidence that the landlord was deliberately avoiding protection or the failure is part of a range of other rogue behaviours then it is likely to be at the higher end.

Always push for the higher penalty, it’s the court’s job to exercise their discretion.

Whilst the law places responsibility on the landlord to ensure the deposit is protected, a claim can be made against a letting agent where it is evident that they are holding the deposit (Draycott v. Hannels Lettings 2010.

Safer Renting have assisted tenants to make these claims successfully.. The only thing that scuppers them is the repeated use of aliases and confusion about identities or the scams explained in the previous blog.

As is so often, what the law states and what goes on in the real world are not the same thing.

By Ben Reeve-Lewis

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About Cambridge House Safer Renting

The Cambridge House Safer Renting team present the ‘go-to’ blog on the world of the Shadow Private Rented Sector.

We monitor the world of rogue landlord and agent activity, publicise developments, circulate innovative ideas, keep readers abreast of changes in laws and regulations, raising awareness of criminal trends and scams, celebrate successful actions and interview people working in the field, connecting up anyone involved, from tenants and their advisers, to enforcement officers, lawyers and journalists.

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