Friday, 9 November 2012

Court imposes maximum penalty for 'minor' omission of prescribed information

This week a residential landlord who failed to produce the prescribed information to the tenant under the Tenancy Deposit Scheme has received the maximum penalty from The Court of Appeal.

Although the landlord produced "most" of the materials and the omission was described as "minor" the case, which was initially dismissed by a judge, The Court of Appeals overturned the decision and awarded the full penalty to the tenant.

After the case, lawyers pointed out that the omission could have been rectified by simply giving the tenant a copy of the Tenancy Deposit Scheme's leaflet. It should also be noted that this is something the tenant was able to get for themselves.

The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 states that landlords (or the agents representing them) are obliged to produce a list of "prescribed information" to all tenants. This "prescribed information" sets out exactly how the scheme works and its implications.

In this instance, the case of Ayannuga v Swindells, the landlord omitted seemingly minor pieces of information that had been listed in the prescribed information, regardless of the fact the information was already in the public domain.

The landlord argued in the initial hearing that he had provided most of the information with only minor deficiencies related to the technical details of the scheme and that these details were easily accessible to the tenant by contacting the provider of the scheme. The judge found in favour of the landlord and the claim was dismissed with the landlord being able to keep the deposit.

However, this was followed by a hearing at the Court of Appeal in which the previous decision was overturned. In addition, it was ruled that the tenant be awarded the maximum compensation of three times the deposit.

Luke Maunder, a property specialist with law firm Barlow Robbins, said: "This case has important implications for residential landlords and residential agents.

"It is not uncommon for minor pieces of information to be omitted from the prescribed information, particularly as the Act allows it to be produced separately from the Tenancy Agreement, and some required items instinctively seem less important as the tenant can find it easily elsewhere.

"In the case of Ayannuga v Swindells, the landlord failed to provide details of the procedures to be followed in certain events. Details of the Tenancy Deposit Scheme had been provided, but the omission of the additional information - potentially as simple as including a leaflet provided by the Scheme - has cost him thousands.

"The maximum fine is three times the deposit, but the landlord also forfeits the original deposit, so in reality it is four times. As a deposit is usually at least a month's rent, a small error can be very costly."

The important lesson to be learned from this is that guidelines and rules within the property industry must be adhered to with absolute precision. More and more stories are emerging of landlords and agents alike being reprimanded for details, which may seem arbitrary but have far-reaching consequences.

Luke Maunder concludes: "All residential landlords and letting agents need to take note of the important decision in Ayannuga v Swindells and make sure that they provide all the necessary prescribed information, ideally well within the 30 days allowed."

Click here to view the original article Court imposes maximum penalty for'minor' omission of prescribed information.

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