Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

Tenancy Deposit Protection- A Binding Decision

Tomorrow (Monday 25 January 2010) PainSmith has a case appearing in the High Court which should provide the first binding decision on Tenancy Deposit Protection under the Housing Act 2004.

In Draycott v Hannells Lettings Ltd there are two issues for the Court to consider.

  1. Whether an agent can be pursued for the usual penalties under s214 due to the deposit being unregistered; and
  2. Whether the penalties under s214 bite merely on late registration or only if the deposit is unregistered when the Court comes to consider the matter at hand.

PainSmith is acting for the Defendant lettings agent in this case which is expected to have far-reaching effects across the industry. There is unlikely to be a final decision tomorrow but it should follow relatively shortly and will, no doubt, be reported here when it does.

UPDATE: Mr Justice Tugendhat has reserved his decision. At this stage we do not know when a final decision will be rendered. We will post more information here as it becomes available.

Filed under: England & Wales, ,

9 Responses

  1. Trevor Hulme says:

    What was the outcome of this case?

  2. PainSmith says:

    As we said we are still waiting for a decision from the High Court which we would hope will appear this month. When we have a decision we will post it here.

  3. Sara says:

    Is there a decision on this case now?

    I am being sued by my tenant on a similar matter. I registered her deposit late (due to not knowing about this scheme) and we are going to court next week. I am really scared that I will be fined 3 times the deposit. The only case I have found searching the internet is the Draycott v Hannell case and it is said this case will set a precedent for all cases to follow…

    Also, I understand it might be relevant to when the deposit was lodged with a scheme (DPS in my case). I lodged it as soon as the tenant informed me about this. It was lodged on a Monday and I received a letter from court on the Saturday the same week. If the deposit has been lodged before her going to court I might not have to pay the penalty according to some landlord websites. I hope this is true…

  4. PainSmith says:

    There is a decision on the case this post refers to (Draycott v Hannells). If you are referring to Universal Estates v Tiensia then you need to look at this post (http://blog.painsmith.co.uk/2010/08/16/universal-estates-v-tiensia-where-is-it/).

    There is no decision on Universal Estates and there is unlikely to be one before next month. We would suggest you ask the Court to stay your hearing pending the Court of Appeal decision in Universal Estates.

  5. Sara says:

    Hi,
    What is the decision on the case Draycott v Hannells?

    I have read a lot about this on the internet and it seems that a lot of county court cases have different judgements. What applies to my case, is the fact that I was not aware of the deposit scheme and simply acted in good faith and secured the deposit as soon as I found out. The judgement in similar circomstances points to my favour. Keeping this in mind, would you still advice to ask the postpone the case and wait for the judgement in the Universal Estates case?

    Also, I am not sure if this topic relates to the subject in this thread, but I will ask anyway. I might not be able to attend the hearing (depending if I can get a babysitter or not) next week. Thepsu strongly adviced me to attend otherwise it is very likely I will lose the case. Hm…! To me this sounds like a clear case of discrimination. Any thoughts?

  6. Tom Derrett says:

    There is now a court of appeal decision which also sides with the landlord

  7. Tom Thomas says:

    As a private landlord is it necessary to be part of the tenancy deposit scheme. If there is no letting agent involved can’t you have an informal arrangement with the tenant?

  8. PainSmith says:

    If you take a deposit you must register it with a scheme. You could elect not to take a deposit.

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