Court rules on tenancy deposit information after scheme transfer

A County Court appeal has clarified when landlords must serve fresh deposit information if a tenant’s money is moved between protection schemes.

Laura Murphy, Paralegal in our Dispute Resolution team provides an update.

The issue arose after the tenant paid a deposit that was protected in the MyDeposits scheme. Prescribed information was served correctly at that stage.

The landlords later transferred the deposit to the Tenancy Deposit Scheme (TDS) custodial scheme and sent out a new set of prescribed information. However, this included the tenant’s former email address rather than her updated contact details.

When possession proceedings were brought under section 21 of the Housing Act 1988, the tenant argued the notice was invalid. She said the landlords had failed to meet the requirements of section 213 of the Housing Act 2004 by not supplying correct prescribed information following the transfer.

First instance decision

At the County Court the judge held that prescribed information only needed to be served when the deposit was first received. Moving it between authorised schemes did not trigger a new duty.

The judge also found that the error in the email address meant the later prescribed information was defective, but this did not prevent the section 21 notice from being valid.

The appeal

On appeal, His Honour Judge Glen reached different conclusions. He held that the statutory duty under section 213 does arise again if a landlord chooses to transfer a deposit into a new authorised scheme. The tenant is entitled to receive prescribed information for the new scheme, not just the original one.

However, the judge also ruled that the error over the email address did not make the prescribed information invalid overall. What mattered was whether the information, taken as a whole, was “substantially to the same effect” as required by the legislation. Because the notice included other correct contact details, it met that test.

The appeal succeeded on the point of principle: landlords must re-serve prescribed information if they move deposits between schemes. But the tenant’s challenge to the possession order failed, as the minor error in contact details was not enough to invalidate the notice.

The case highlights the importance for landlords and agents of updating prescribed information whenever deposits are transferred, while also indicating that not every small mistake will undermine compliance.

If you would like more information about the issues raised in this article or any aspect of commercial property law please contact Laura on 01228 516666 or click here to send her an email.