Penalities for non-protection of Deposits

There has been some discussion on different forums that some landlords  are being ordered to pay 3x the amount of deposit if they fail to protect it within 30 days of receipt.

The law is quite clear and is set out in the Housing Act.  It states that a tenant can bring a claim against the landlord if the landlord has not protected the  deposit  within 30 days of receipt. 

The Judge has no discretion in this area and must order that the landlord either protect the deposit or return it.  He must also order that the landlord pay the tenant compensation. 

What the Judge does have discretion over is  how much compensation the landlord must pay  - the minimum is an amount equivalent to 1 x the amount of the deposit, the maximum is 3 x the amount of the deposit.

What the Judge awards will depend on what the Judge's view of the specific case before him.   If the landlord is a professional landlord and has ignored the law it is likely that he will be ordered to pay 3 x, if the landlord is a first time landlord with one property, or it was a genuine mistake, it is likely he will be ordered to pay 1 x deposit - however this is not set in stone.    The Judge will order what he considers just on the day.

The best thing to do is to make sure you protect the deposit within 30 days of receipt.  This applies to situations when you  have only received part of the deposit - it is still a deposit and must be protected.  If you receive another installment at a later date you can then protect that.

If you require any legal assistance regarding tenancy deposits or any other tenancy issues please email me at propertyhawk@fidler.co.uk.

Rebecca Brough

Solicitor

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