Failure to Comply with Deposit Initial Requirements

Paula O'Brien v Jacqueline Jones & Andrew Alexander (T/A Belvoir Huntingdon). Northampton County Court, Claim No 9KG00335 12/02/2010

This case raises an interesting and vital point regarding compliance with the initial requirements of a tenancy deposit scheme. There is also a helpful example of disrepair contained within the case. 

Nearlylegal has produced an excellent analysis of this case.


Ms Jones (the landlord) granted an assured shorthold tenancy to Mrs O'Brien (the tenant), and Mr Alexander was the agent. The tenancy ended on 19 December 2008 by agreement, and the tenant had withheld the last two months' rent due to alleged disrepair. The deposit (£950.00) was protected with the Dispute Service within 14 days, and (I think) prescribed information had been provided within 14 days but was amended before the hearing.

Deposit Arguments

Prescribed Information

The tenant claimed that the prescribed information was incorrect because the landlord had provided the agent's address which was also provided in the tenancy agreement (as allowed by s.48 Landlord and Tenant Act 1987). The tenant argued that the address required under the Housing (Tenancy Deposits)(Prescribed Information) Order 2007 must be a personal home address of the landlord. The court held that the prescribed information order made no such requirement, and the agent's address was sufficient. (Which, it is submitted is correct)

Initial Requirements

When a deposit is received in connection with an assured shorthold tenancy, the landlord must comply with the initial requirements of a scheme [s.213(3)]. 

"The initial requirements" of an authorised scheme are such requirements imposed by the scheme as fall to be complied with by a landlord on receiving such a tenancy deposit [s.213(4)]. 

In this case, the deposit was protected (within 14 days) with the Dispute Service. 

Their scheme rules state (taken from the rules at the time of the case) [Highlights inserted by author]

8.2 For TDS this means that within 14 days of the tenant paying over a deposit to a member, whether or not the funds have been cleared:

8.2.1 the tenant(s) must have received the information specified in paragraph 14.2.3 by its inclusion in the tenancy agreement; and 

8.2.2 the information specified in paragraphs 14.3 must have been lodged on the TDS tenancy database. Paragraph 8.2 comprises the initial requirements of the Tenancy Deposit Scheme (Housing Act 2004, Section 213 (4)).

14.2 states:

The regulations contained in The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 require The Dispute Service to provide certain information and documentation to Members to pass on to their tenants. This can be found in Appendix 4. 

The information should be included in the tenancy agreement as specified in TDS G Clauses to be included in tenancy agreements and terms of business

The documents will be provided by The Dispute Service Ltd, either in hard copy (for which there will be a charge fixed by the Board from time to time) or electronically, for Members to pass on to their tenants.

The landlord or agent had not included TDS G Clauses within their tenancy agreement as required by the scheme's initial requirements. Therefore, the tenant argued that the landlord or agent had not complied with the "initial requirements" of the scheme and was entitled to 3 x deposit as a penalty (at the time of this claim, the penalty was fixed at three times the deposit). 

The landlord and agent argued that the missing TDS G clauses were a mere technicality, and the tenant was not prejudiced because they contained no further significant information. After all, the landlord had already provided prescribed information, tenancy agreement, inventory and the appropriate tenant's leaflet explaining the deposit scheme.

Correspondence between the tenant and the Dispute Service revealed that because of the breach of providing the TDS G clauses, the free alternative dispute resolution was not available to the tenant. So the tenant was unable to take advantage of this free service. 

The court held that the landlord was in breach of the initial requirements of the scheme and therefore in breach of section 213(3) Housing Act 2004 and ordered the return of the deposit plus three times the deposit as compensation totalling £3800 but offsetting the two months unpaid rent.

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