TheTenanancy Deposit Scheme, introduced under the Housing Act 2004, made it a requirement that landlords deal with deposits made by their tenants which were received on or after 6 April 2007 (CHECK) using an authorised tenancy deposit scheme and to notify the tenant within 14 days that this has been done. The Act set up a system of penalties for landlords who failed to meet this obligation.
Recently, however, the Court of Appeal has issued a ruling which will please landlords and dismay tenants. It involved a tenant who took legal action against his landlord because the landlord failed to lodge the tenants deposit with one of the authorised schemes.
By the time the action had been brought, the landlord had put the position right. The question before the court, therefore, was whether the tenant could bring an action given that the failure which led to the action had been put right.
The court concluded, by a two to one majority that the 14 day time limit must apply from the time at which a tenant brought an action against the landlord rather than the date on which the deposit was paid.
However, until the landlord has lodged the deposit, he cannot regain possession of the premises.
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