Steven Wood of Coffin Mew solicitors has written an article about a recent court case regarding Landlord, Managing Agent and Tenant rights surrounding the Deposit Protection Services (DPS) and access to monies deposited with it.
Most landlords are now aware of the legal requirement to protect deposits taken in connection with shorthold tenancies. To date there has been little reported litigation under the provisions of Chapter 4 of the 2004 Act and this case is a useful benchmark of the courts’ attitude and interpretation of the Act. Crucially, it serves as a reminder that until such time as a deposit is properly protected the landlord is precluded from utilising the accelerated possession procedure set out in s.21 of the Housing Act 1988 and which is one of the main reasons why landlords choose to use shorthold tenancies. Perhaps less obvious though is the hidden cost for the landlord if it gets it wrong – the deposit in this case was relatively high at £2,700 but, even so, the cost of the legal proceedings will have far outstripped the amount of money at stake. The moral of this case is simple: ignore the deposit protection provisions at your peril.
Read the full article.