Where a landlord takes a security deposit from their tenant in connection with an assured shorthold tenancy agreement, the landlord is required to protect that deposit with an approved deposit protection scheme. Under section 213 of the Housing Act 2004 (HA) landlords are required to:
- Protect the deposit within 30 days of it being paid by the tenant or relevant person (section 213(3)); and
- Serve the prescribed information within 30 days of the deposit being paid by the tenant or relevant person (section 213(6)(b)).
Failure to comply with the above can render a landlord/landlord’s agent liable for compensation at the equivalent of 1 – 3 times the value of the deposit. Where it is an initial requirement of the chosen deposit protection scheme to serve the prescribed information, it will also mean that the deposit is not correctly protected, where a deposit is not correctly protected, a section 21 notice cannot be validly served until the deposit is returned to the tenant.
Siddeeq v Alaian – The Case
The case of Siddeeq v Alaian, heard in the County Court at Mayor’s and City of London County Court on 9 August 2024, considered whether it is sufficient to serve the prescribed information, before the tenant has paid the deposit.
The Facts
The tenancy agreement was signed on 12 November 2021. The agreement, like many others, included a section setting out various aspects of the deposit prescribed information. Within that section there was space for the landlord to sign and certify the information and for the tenant to confirm that the information was accurate. The leaflet for the relevant deposit protection scheme was also provided with the tenancy agreement.
The tenant paid the deposit on 13 November 2021 and the landlord protected it on 19 November 2021 and gave the tenant a copy of the deposit protection certificate. Therefore, the prescribed information was signed before the deposit even paid to the landlord and protected.
The landlord later served a section 21 notice and issued a claim for possession via the accelerated procedure. The tenant defended the claim on the basis that the prescribed information was given before the deposit was paid to the landlord, meaning the requirements were not met and thus the section 21 notice was not valid. At the hearing, the District Judge held that the prescribed information could be served before the deposit was paid.
The Appeal
The tenant appealed this decision. On appeal, HHJ Hellman held that the prescribed information must be provided after the deposit is paid by the tenant. Within the prescribed information, the landlord must state the amount of the deposit paid, which if a landlord is serving the prescribed information before the deposit has been paid, they cannot certify the amount of the deposit in good faith if no deposit has been paid at that time.
Points to Take Away
This case clarifies whether or not the requirement to serve prescribed information can be satisfied before the deposit is paid. However, it remains unclear whether it would be sufficient to serve the prescribed information after the deposit has been paid, but before it has been protected with an approved scheme.
We appreciate that some tenancy agreements include the prescribed information by default, but landlords and agents should ensure that the prescribed information (along with any necessary leaflets) is served only after the deposit has been paid by the tenant and protected.
If you require any assistance in respect of an assured shorthold tenancy agreement, please do not hesitate to get in touch with a member of our Residential Possession Team.
Please note that none of the above information constitutes legal advice
