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Ignorance is Not Bliss

‘Prescribed information’ about the Tenancy Deposit Scheme (‘TDS’) means just that. So the Court of Appeal has recently held in Ayannuga v Swindells [2012] EWCA Civ.

The TDS, introduced by ss.213-214 Housing Act 2004 (‘the Act’), has had a troubled past. Most of its drafting deficiencies were corrected by the Localism Act 2011 which took effect on 6 April 2012. So the real interest has been to see whether the courts are now prepared to enforce the new regime. 

In Ayannuga T had paid a deposit into an authorised custodial scheme. L brought proceedings against T, including a claim for possession based on rent arrears. T counterclaimed, denying any rental arrears and seeking repayment of the deposit. He alleged that L had breached the Act by failing to provide him with information on the TDS as prescribed by the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (‘the Order’). 

Dismissing T’s counterclaim, the judge held that L had substantially complied with his obligation to provide the prescribed information. Information in the tenancy agreement and additional information (supplied only at trial) had substantially the same effect as the information prescribed by the Order. 

On T’s appeal, L accepted that he had not fully complied with the Order, but contended that the information was available from the scheme’s administrator or its website, so this was just a technicality; it did not seriously disadvantage T. 

The CA disagreed. The whole scheme (including dispute resolution) is important and a tenant is entitled to know about it. It awarded T the return of the deposit and 3 times the deposit as a penalty. It also apparently commented (the report is not yet published) that if there is a doubt about the validity of a notice it should be determined by following the test in Ravenseft v Hall [2002] HLR 33 (is the notice to substantially the same effect in telling the tenant of their rights etc under the TDS). 

There was a similar result in Suurepere v Nice [2012] 1 WLR 1224. So the moral is clear: these things matter. If not, a tenant can resist a s21 notice claim and use it as a counterclaim to reduce any money claim, or to resist a possession claim based on, say, arrears of rent.

Derek Kerr / 1st Dec 2012


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