Statutory Information – Protecting your Tenant’s Deposit

Every letting agent knows that when a tenant pays a deposit for their rental home, it must be protected in a recognised deposit scheme, and the appropriate information provided to the tenant. The tenant has a right to know where the money is being held, as well as when and why their landlord may seek to make deductions from the deposit at the end of the tenancy.

However, the following case shows just what a tenant could seek to claim from their landlord if they felt their deposit had not been protected in line with the rules, and how complex defending such a case could be. 

Lowe-v-Charterhouse

In the case of Lowe-v-Charterhouse, the claimant – Mr Lowe – entered a fixed term tenancy with his landlord in 2010. There were then up to eight tenancies entered into, although some of these were not statutory periodic tenancies.

Mr Lowe brought a deposit penalty claim on the basis that he had not been provided with the statutory prescribed information from the very start of the first tenancy in breach of s213 (6) of the Housing Act 2004. Mr Lowe claimed £120,888 including an additional £729.60 which he claimed was held as the deposit.

However, thankfully for the landlord Mr Lowe was not successful. Some of the reasons for this are outlined below:

1. As per the Limitation Act 1980, Mr Lowe was only able to claim for the previous six years; and as the claim was issue in 2021, the applicable date was June 2015.
2. The court was not satisfied that the £729.60 was held as part of the deposit.
3. The court held that the requirement to serve a copy of the prescribed information on the tenant by the landlord had been met as an unsigned copy of the prescribed information had been served on Mr Lowe under a cover letter from his landlord.
4. Furthermore, the prescribed information required “…the circumstances when all or part of the deposit may be retained by the landlord, by reference to the terms of the tenancy” to be included. In Mr Lowe’s prescribed information Clause 6 was mentioned which did not match Mr Lowe’s Tenancy Agreement as it was not originally an AST, so was in different form. The Court held that again this was substantially to the same effect.
5. On the issue of whether there was a new tenancy in October 2015 the court found insufficient evidence of a concluded agreement. However, Mr Lowe had begun paying an increased rent, but this by itself was not sufficient to establish a new tenancy agreement. 
6. There was no ninth tenancy, and therefore no 10th statutory periodic tenancy.
7. The landlord had attempted to return the deposit to Mr Lowe by cheque. Mr Lowe had said that he didn’t know how to ‘conveniently’ deposit the cheque with his online bank. He also did not provide bank details for a transfer.

Based on the above and more, Mr Lowe’s claim was dismissed; however, what is of particular interest is points three and four above. As Mr Lowe is currently appealing this decision, it will be interesting to see whether the court of appeal upholds the decision of His Honour Judge Luba KC.

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