Landlord faces maximum penalty for tenancy deposit failures

The Court of Appeal has imposed the maximum penalty possible on a landlord who failed to comply fully with the requirements of the Tenancy Deposit Scheme (TDS).

The issue arose after the landlord took action against a tenant for rent arrears. The tenant brought a counterclaim denying rent arrears and seeking repayment of the deposit. He alleged that the landlord had breached legal requirements by failing to provide him with information about the scheme.

The landlord accepted that he had not complied fully with the regulations but argued that the non-compliance merely concerned minor points that did not leave the tenant in a seriously disadvantaged position.

The court accepted this argument and dismissed the tenant’s claim.

However, that decision has now been overturned by the Court of Appeal. It held that the missing information was of real importance to the tenant as it defined the circumstances in which a tenant could recover his deposit and how disputes could be resolved.

The court ordered that the landlord should repay the deposit within 14 days. It also imposed the maximum penalty by ordering the landlord to pay the tenant a sum equal to three times the deposit.

The case emphasises the need for landlords to ensure that they comply fully with all legal requirements.

Please contact Matthew Melling if you would like more information about the issues raised in this article or any matter relating to commercial property law.