A ruling in a recent court case should put an end to residential landlords being fined for failing to comply with the requirement to pay a tenants’ deposit into a regulated tenancy deposit scheme and supply the tenant with information about the scheme within 14 days of taking the deposit, according to Philip Rowland, a solicitor at Adams & Remers.

Many landlords have fallen foul of this rule which means the fine they pay to the tenant is three times the amount of the deposit and Philip Rowland says that some tenants have been exploiting their landlord’s ignorance of the regulations to get themselves in essence three months’ free rent.

In the case of Tiensia v Vision Enterprises Ltd (t/a Universal Estates) and Honeysuckle Properties V Fletcher and others the landlord failed to protect the tenant’s deposit with a Tenancy Deposit Scheme and provide the prescribed information within 14 days of receipt of the deposit as required by the Housing Act 2004. The tenant applied to the court for the landlord to pay a penalty of three times the amount of the deposit.

The court of appeal held that the landlord had until the court hearing date to comply with the ‘initial requirements’ of the Tenancy Deposit Scheme and provide the prescribed information to the tenant.

Philip Rowland said: “Landlords and tenants have been awaiting clarification on this issue and the court’s decision will be welcomed by landlords. It will mean that the court’s power to impose a penalty of three times the deposit is unlikely to be exercised in practice. I would however urge landlords to always comply with the 14 day time limit as the sanction of cost implications could still be implemented by the courts.

“Also in addition to the potential fine, failure to comply with the deposit regulations will render a standard notice to quit served on a tenant invalid. This will make it much harder to remove tenants from the property so it should give landlords an extra incentive to make sure they follow the regulations very carefully,” Rowland concluded.