In some ways my professional career as a solicitor can be traced alongside the development of tenancy deposit protection. It was first introduced as part of the Housing Act 2004 when I was a trainee solicitor. My first law book was about the Housing Act 2004 at that time, and this Act has been a defining element of my career. Some might say I should have stopped the writing there but there have been around ten more books, and numerous book chapters and articles since! I recall speaking at a conference where I pointed out the flaw in the legislation which gave rise to the decision in Universal Estates v Tiensia and, from there, an fix of sorts through the Localism Act 2011. I cut my teeth on early appeal work in cases such as Draycott v Hannells which helped clarify the scope of agent liability. More recently, I have acted on appeals which have looked at the fundamentals of the prescribed information structure in Northwood (Solihull) v Cooke and Charterhouse v Lowe. These are merely a few of the cases in which I have had more direct involvement, there have been many others. In the sense that deposit protection was intended to reduce the number of small claims in the courts over deposit deductions by diverting these to adjudication it has been a success. In terms of its overall reduction of litigation, it has been a conspicuous failure, in that it has spawned a plethora of far more complex and expensive cases in the appellate courts. Often the legislation has proved to be a very unhelpful trap for the unwary with, largely useless, additional obligations created by cases such as Superstrike v Rodrigues which Parliament was then obliged to fix in the Deregulation Act 2015. The more recent approach by the appeal courts, typified by Northwood (Solihull) has been to accept that most landlords are individuals and relatively unsophisticated in the law and so to adopt a relatively pragmatic approach. The County Courts have not always been so practical!

This brings me to the more recent case of Siddeeq v Alaian which is a County Court case and is being reported online in some specialist websites. While it is a County Court case it is a decision of a Circuit Judge and so is likely to be binding (or treated as such) on most District Judges, certainly in the London Circuit. In this case the landlord properly protected the tenancy deposit with a scheme but managed to serve the prescribed information before the receipt of the deposit itself. This may sound ludicrous, how could a landlord serve the information in advance of receiving the deposit. But residential tenancies are a very practical world with very tight margins. Most landlords and agents have a very clear idea where the tenancy deposit is going to be lodged well in advance of it being taken and while wanting to get their paperwork right they also want to keep the process as lean as possible in order to keep costs down. Often therefore paperwork such as deposit paperwork is incorporated into tenancy agreements and goes out to tenants at the same time as the tenancy agreement is being signed, before the deposit has been paid over.

The County Court has now held that this is wrong and that the deposit paperwork can only be served after the deposit has been received by the landlord or his agent. At one level this is a fairly natural reading of s213(6)(b), Housing Act 2004. This tells us that the prescribed information must be given “within the period of 30 days beginning with the date on which the deposit is received by the landlord.” The most natural reading is that there is a period starting with the deposit being received and ending 30 days later during which the information must be given. An alternative, but more strained, reading is that there is a period which has no set start date but which ends 30 days after the deposit was received in which the information must be given. That second reading is the less obvious one but where legislation created a perverse result then sometimes the more difficult reading is the correct one. In this case the natural reading tells us that where a landlord has properly protected a deposit and given all the right information to the tenant then they should face challenges recovering possession of their property and be subject to penalties simply because they gave that information a few days too early. That seems like a perverse outcome to me!

This case looks like it will not be appealed further. However, I doubt that this issue will go away. Not least as there will be a number of landlords and agents now finding themselves in breach of the deposit legislation when they thought that they had complied with it. Therefore, I suspect this will be back before an appeal court relatively soon. Likewise, if you thought that the imminent demise of s21 would also bring the end of a lot of deposit litigation because it will no longer be required as a defence to s21 then you are also likely to be wrong. The Renters (Reform) Bill allowed for a defence to s8 notices if the deposit had not been properly dealt with and I anticipate a similar provision being found in its replacement.

So, the world of tenancy deposit litigation is likely to continue to pop up in my work for some time to come.