Can Landlords Serve the Prescribed Information before Deposit Payment?
The recent ruling in the case of Siddeeq v Alaian has highlighted how important it is for landlords and letting agents to carefully check that they are complying with the law when dealing with tenancy agreements.
Where a deposit is paid by a tenant to a landlord in connection with an assured shorthold tenancy agreement, the landlord is required to ensure that all tenancy deposits are protected under the tenancy Deposit Protection Scheme (DPS).
Section 213 of the Housing Act 2004 states that landlords are required to:
- Protect the deposit within 30 days of it being paid (see section 213(3)); and
- Serve the prescribed information within 30 days of the deposit being paid (see section 213(6)(b)).
If a landlord fails to protect the deposit, a tenant can take their landlord to Court and potentially receive 1 to 3 times the value of the deposit as compensation.
In addition to protecting the deposit, landlords and letting agents need to be aware of the importance of timing when it comes to providing a tenant with the prescribed information (which includes information regarding the amount of the deposit and details of the scheme that holds the deposit).
The case of Siddeeq v Alaian was to determine whether it was sufficient for the prescribed information to be served prior to the tenant making their deposit payment.
The case of Siddeeq v Alaian
The tenancy agreement was signed on 12 November 2021. At the same time, the landlord provided the prescribed information to the tenant. The tenant then paid the deposit on 13 November 2021 and the landlord protected this on 19 November 2021. Therefore, the prescribed information was provided to the tenant before they actually paid the deposit.
When the landlord later served a Section 21 notice and subsequently issued a claim for possession, the tenant defended the claim. The tenant stated that the prescribed information was provided before the deposit was paid to the landlord thus rendering the Section 21 notice invalid.
The District Judge held that the prescribed information could be served prior to payment of the deposit.
Appeal
On appeal by the tenant, His Honour Judge 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. If a landlord is serving the prescribed information before the deposit has been paid, then they cannot possibly certify the amount of the deposit paid.
Landlords will be aware that some tenancy agreements include the prescribed information within the agreement. However, care should be taken to ensure that the prescribed information is only served after the deposit has been both paid and protected.
Any questions about tenancy deposit disputes? Whether you are a landlord or a tenant, we’re here to assist with all aspects of property litigation, from deposit regulations and prescribed information rules to other rental-related issues. Contact our expert property team for support today.
