In particular we provided a link to an article by David Smith published in The Negotiator magazine which explained the judgement in the recent appeal court case Gladehurst Properties Ltd v Hashemi. The court held that the monetary penalties for non-protection of the deposit are not available to the tenant when the tenancy has come to an end.
In other words, tenants cannot make claims against their landlords for three times the deposit at any point once the tenancy is over.
David Smith also explained that a judgement in a previous case Tiensia v Universal Estates means that "landlords are now simply unable to protect a deposit at all and if the tenant raises the issue during the tenancy they can then just place it into a scheme and rely on the decision in Tiensia to protect them".
David Smith is not alone in his understanding of the effects of these recent court cases. Several other commentators have also expressed their view that the current Tenancy Deposit Protection schemes are dead, so much so that the Government has indicated that it will use the forthcoming Localism Bill to clarify the legislation.
Meanwhile, where does this leave landlords, letting agents and tenants? Clearly we cannot be seen to be advising people to break the law but given that the law itself is now broken you have to wonder why anyone would bother using the Tenancy Deposit Protection Schemes. Unless a landlord or agent intends to use a Section 21 Notice it seems that the current law has no meaning.
We suggest that landlords, agents and tenants should read the various articles that have been published and make up your own mind about how the law now stands. For further information please click on the links below:
Tenancy Deposit Protection Bites The Dust
Tenancy Deposits- A Novel Argument on Hold
3 x deposit app by ex-tenant?
Tenancy Deposit Court of Appeal decision – the Judges’ dilemma
Court of Appeal Rules on Tenancy Deposit Protection
