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Helen Jackson comments on the recent case of Draycott & Anor-v-Hannells Letting Limited.
Since the introduction of the Tenancy Deposit Scheme in April 2007, there has been a shortage of reported cases on the application of the Act. However, a case heard earlier this year in the High Court, Draycott & Anor -v- Hannells Letting Limited has been reported. This case relates to the situation where a Landlord asks a letting agent to deal with the letting and associated deposit.
The Housing Act 2004, which requires deposits received by residential landlords to be paid into one of the 3 Government approved schemes, provides for fines for non-compliance. Section 214 (4) of the Housing Act 2004 provides that a tenant can apply to the Court in the event that his/her deposit has not been protected within a scheme within 14 days of receipt.
In the Draycott case, the deposit was received by the letting agent who did not pay the deposit to the scheme within the 14 day period. The letting agent was the defendant to the claim. The agent defended on the basis that any claim regarding failure to comply with the act would be against the landlord only.
The Court did not accept that defence and held that a tenant can bring proceedings against an agent who receives the deposit and fails to protect it. In this case, the fine was not ordered to be paid as, prior to the commencement of proceedings, that the agent did protect the deposit in the scheme.
This case underlines the importance of compliance with the Housing Act 2004, to ensure that deposits received are paid into the scheme within 14 days of receipt. If you are acting as agent for a landlord, this case demonstrates that the Judges will be willing to fine agents, who fail to comply. The fine that could have been imposed was the payment of 3 times the amount of the deposit.
If you have any queries or concerns about a related issue and would like advice, please contact Helen Jackson. Helen specialises in property related disputes and is a member of the Dispute Resolution Team in Exeter. The Team is described as "exceptional" in the Legal 500 2010 independent directory.
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