In initial 30 days residential landlord’s contract to protect tenant’s deposit fulfilled preconditions of termination notice

Private landlords can take proceedings to regain possession of their property without having to give any reasons under the Housing Act 1988 using Section 21’s automatic right of possession once the fixed term has expired.

A landlord cannot use Section 21 to regain possession during the fixed term. They can serve a Section 21 notice on the tenant during that term, providing the date they state they require possession on does not precede the end of the fixed term.

If their tenant paid a deposit, Section 215(1) (a) of the Housing Act 2004 (“the 2004 Act”) says the landlord cannot rely on the Section 21 notice unless the deposit has been protected in accordance with the tenancy deposit schemes.

In Tummond, R (on the application of) v Reading County Court & Anor [2014] the landlord had let a property for 6 months under an assured shorthold tenancy.

In December 2012 the Landlord served a notice requiring possession at the end of the tenancy under section 21.

In June 2013, after the fixed term had expired, the landlord commenced proceedings for possession, relying on that notice.

The claimant asserted that the landlord could not rely on the section 21 notice because it had been served at a time when the claimant’s deposit was not held in accordance with an authorised scheme. Accordingly, the landlord could not rely on the Section 21 notice.

Section 215 is headed “Sanctions for non-compliance”. However, there had been no non-compliance in this case.

The 2004 Act required that the deposit be protected within 30 days (s.213 (3)). This had been done.

The 2004 Act also required that the prescribed information referred to in s.213 (5) of the 2004 Act be provided in substantially the prescribed form within 30 days (s213 (6)).

This too had been done.

In so far as there had been any other “initial requirements” under the authorised scheme these had been complied with inside the 30 day period, and actually by 2nd January 2013.

Since there had been no “non-compliance” there could be no justification for “sanctions” predicated on there being “non-compliance”.

Moreover, Section 215(1) (b) would only be triggered if the landlord had failed to comply with the initial requirements, including protection of the deposit, within the prescribed 30 day period.

The clear inference was that unless and until that occurred there would be no applicable sanction.

The claimant’s case that there would be was wrong.

In the interim before the 30 day period expired the landlord had contractually agreed to comply with scheme requirements and to protect the deposit within the 30 days.

The claimant’s case that he would in that intervening period still be subject to the “sanction” of s.215 (and s.214) until the deposit had been formally protected was untenable.

In this case where the landlord was contractually bound by the tenancy agreement to protect the deposit under an authorised scheme from the moment of its receipt that Landlord would “hold” the deposit “in accordance with an authorised scheme” even before the deposit was protected.

The fact that the defendant had at the time of service of the Section 21 notice been contractually obliged to deal with the deposit in accordance with an authorised scheme satisfied the requirements of s.213 (1).

The existence of that obligation to deal with the deposit in that way meant that from the moment the deposit was received by the landlord, it was also being “held” in accordance with an authorised scheme.

At all subsequent times the money was dealt with in accordance with the scheme requirements. So the court rejected the tenant’s claim.

This blog has been posted as a matter of general interest. It does not remove the need to get bespoke legal advice in individual cases.