A warning from Martin Mears that landlords are at risk from a pernicious & unjust rule concerning tenants’ deposits
- Section 184 of the Localism Act 2011 puts landlords in an unjust position.
- Example: despite returning the deposit, one landlord had to pay six times the original deposit or go to court with no prospect of recovering his costs.
In the bad old days it was common for residential landlords to take a deposit at the commencement of the tenancy which in practice the tenant had little prospect of ever seeing again. The deposit, claimed the landlord, would just about cover the dilapidations and he would retain it accordingly. If the tenant was unhappy about this he could instruct a surveyor and bring him along to argue the case in the small claims court. For most tenants, of course, this was not an economic option.
The perceived evil of the wrongfully withheld deposit was first addressed by s 213 of the Housing Act 2004 which required residential landlords to safeguard the deposit by way of an authorised scheme. This had to be done within
