Multiple deposit breaches

In Howard v Dalton, the tenant’s damages award for the landlord’s failure to protect the tenancy and provide the prescribed information (PI) was reduced from £83,760 to £7,200 on appeal.

The first tenancy was granted in 2007. A deposit of £900 was initially taken and a further £845 upon signing the tenancy. There was then a further 7 tenancies between the parties. It was understood that the deposit was not protected until 2014 and that the PI was never served on the tenant.

Ms D pursued a claim against the landlord for failing to protect the deposit and failing to provide the PI in respect of 8 tenancies. At first instance the court held that the landlord had committed 16 breaches as follows:

  1. A breach for not protecting the deposit
  2. A breach for not serving the PI
  3. Both breaches across 8 tenancies equals 16 breaches.

The award of 16 breaches at 3 times the deposit amount of £1745 came to a total of £83,760.

On appeal the court held that a failure to protect the tenancy would inevitably lead to a failure to provide the PI. Parliament’s intention was not therefore to award damages for each breach but for one or the other because they were not independent requirements. Damages would be awarded once for each tenancy.

The landlord successfully argued that a 6-year limitation period applied to the claim. Consequently, the court reduced the number of tenancies for which a claim could be made from 8 to 4 and for unknown reasons reduced the award from 3 times the deposit to 2. The court also held that the deposit figure was £900 and not £1745. Thus, awarding the tenant a total penalty of £7,200.

Comment

There has been a lot of argument over multiple claims and whether a tenant can claim for each tenancy as a new failure to protect the deposit and whether the failure to protect and a failure to serve information are two separate claims. In this case the court held that a failure was singular but that each new tenancy was a new failure. This case is not binding except in the local circuit but it provides a useful statement of where courts are. It seems that judges are quite prepared to penalise landlords, often substantially, for deposit protection failures but will try to avoid a penalty that is so great as to be a crushing burden.

Our thanks to the nearlylegal blog for reporting this case.

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