Court rules against mandatory 14 day deposit protection!

I’ve been reading about last week’s decision by the Court of Appeal who ruled that as long as the landlord has protected the deposit, and provided the tenant with the relevant ‘prescribed information’, by the time the case is heard, they will not be prosecuted or made to pay the large fine. Importantly, no scheme will be able to impose an initial requirement that a deposit must be protected within 14 days with failure to do so resulting in the tenant claiming against the landlord. 

This decision comes after months of debate about when a deposit has to be protected in order to avoid the fine. The high profile case that kicked off the debate was Draycott v Hannells earlier this year. The cases heard yesterday, before the ruling, were that of Christelle Tiensia v Vision Enterprises, trading as Universal Estates and Honeysuckle Properties v tenants James Fletcher, Frank McGrory and Matthew Whitworth.

The Court believes their ruling is in line with the Government’s original intention for the schemes – and will ensure that tenants are unable to claim large sums of money from their landlords; who in some cases might have just made an honest mistake.

Understandably the concern from some is that the decision will cause complacency amongst landlords who might default to protecting deposits this way, knowing that they’ll avoid fines. However, the deterrent for this will surely be the costs they’d incur if a case was brought against them and I’m sure tenants will continue to give gentle reminders to landlords if proof of protection is not received.

Whilst it’s never been an initial requirement of The DPS’s scheme, and our Terms & conditions will not change as a result, we’ve always stated 14 days as the recommended best practice timeframe for protecting deposits and notifying your tenants. I’d still advise all our landlords and agents to carry on using this timeframe in order to be fair to your tenants and keep out of the Courts.

You can read more from me on prescribed information in my blog post next week.