Tenancy Deposit protection and points from the Khuja v Chowdhury case

The landlord (Mr K) had received a deposit in June 2011. He failed to register it into a relevant Tenancy Deposit Scheme until June 2013. It was then re-protected in a Tenancy Deposit Scheme in February 2014. It was at this point that the landlord asked the tenant (Mrs C) to sign a deposit protection certificate. Until that point Mrs C was unaware about the status of her deposit.

Immediately after providing the tenant with the certificate, Mr K served a section 21 Notice on her and subsequently issued possession proceedings. The section 21 Notice was found to be invalid on the basis that Mrs C had not been prescribed with the information before service of the section 21 Notice.

Mr K then issued a second claim for possession. Mrs C argued that this claim could not succeed in light of the fact that Mr K had not protected the deposit within the 30-day deadline. Section 215 Housing Act 2004 dictates that a section 21 Notice may not be validly served if section 213 is not complied with and/or the deposit has been protected outside of the 30-day time limit and not returned to the tenant. It was held that as such, the section 21 Notice issued was invalid and the possession claim failed.

The Court then went on to consider Mrs C’s counterclaim, which was for a penalty of up to three times the deposit on the basis that section 213 had not been complied with.

The District Judge commented on the fact that the landlord is a professional landlord and the rules of deposit protection have been in force for many years. Thus, there was no reason for him not to be fully aware of his responsibilities. It is clear that it was Mr K’s responsibility to ensure that the deposit was protected in the relevant time and that prescribed information was given to Mrs C. The District Judge went on to award two times the deposit, some £1,600.

The case of Khuja v Chowdhury demonstrates the Court’s approach to the landlord’s non-compliance of the tenancy deposit provisions and subsequent sanction. Indeed, the points that arise from this case are useful as it stresses the importance of the rules of deposit protection and the potentially costly consequences that can arise of getting it wrong.

Deposits and possession proceedings can be very tricky, and Burke Niazi are very experienced in dealing with such matters, so please call our Housing and Property team for advice.