Residential landlords risk losing deposits and paying a penalty if they fail to give tenants the required information
Woe betides any landlord who fails to do either of these things as he will not be able to serve notice to recover possession from the tenant at the end of the tenancy and, to add insult to injury, the landlord will have to pay a penalty of between one and three times the amount of the tenant's deposit, the exact amount to be determined by the court.
In a recent decision, the Court of Appeal explained that providing the tenant with the information was equally as important as the obligation to protect the deposit with an approved scheme, as it enabled tenants to understand how that particular scheme worked and how to reclaim the deposit at the end of the tenancy. The fact that a tenant would be able to obtain the information directly from the scheme was irrelevant. The Court of Appeal in the case ordered the return of the tenant's deposit (£950) and, perhaps surprisingly, awarded payment of the maximum penalty of three times the deposit (another £2850).
Most landlords are anxious to comply with the first requirement but sometimes fail to provide the required information. This case is a reminder to landlords that a failure to do so will be an expensive mistake and well informed tenants are likely to lie in wait for landlords to slip up.
For further information on the rules for tenancy deposit scheme and a full list of the information to be provided to tenant, please download our client note Tenancy Deposit Schemes.