‘Lowe’ and behold: an important update for residential landlords about their tenants’ deposits
Sponsored feature | Georgia Dinallo, associate, HCR Hewitsons
The recent decision in Lowe v Governors of Sutton’s Hospital In Charterhouse [2024] has clarified what deposit documents residential landlords have to serve on their tenants and whether their prescribed information is sufficient if it contains mistakes.
Case background
In the above case, the tenant made a claim against the landlord for failing to serve their deposit’s prescribed information correctly. Their points included the following:
1. The prescribed information was not signed by the landlord, but it was accompanied with a covering letter signed by their managing agent.
2. The prescribed information had a typographical error where it referred to the incorrect clauses of the tenancy agreement.
3. Because the landlord had served several copies of the prescribed information over the years of their occupation, they should receive a penalty for each default.
Case decision
The trial judge dismissed the claim, but the tenant appealed to the High Court. The High Court dismissed the appeal on the following grounds:
- The prescribed information contained an obvious typographical mistake and this did not prejudicially effect the tenant. From the perspective of a reasonable person the prescribed information was supplied. The statutory language also provided some flexibility, if the information supplied is “substantially to the same effect”.
- The same was said for the requirement for the prescribed information to be signed. The purpose of the statute had been complied with and information supplied was substantially to the same effect, as the landlord’s managing agent signed the covering letter to the prescribed information.
- The claim had a limitation of six years in place and this date had passed. Even if the claim was valid, compensation was limited to the last of the landlord’s defaults.
This case shows the importance of landlords following the correct procedure when it comes to providing prescribed information. If a deposit was taken in connection with an assured shorthold tenancy agreement, landlords must serve their tenants with a copy of the following:
- A deposit certificate
- The deposit scheme’s prescribed information
- Any information booklet the deposit’s scheme may annex to the prescribed information.
Serving these documents correctly and in time is essential as this will ensure a valid ‘no fault’ eviction notice pursuant to Section 21 of the Housing Act 1988 can be served. Failing to serve the deposit’s prescribed information within 30 days of a deposit being received can also result in a landlord receiving a penalty of up to three times the deposit sum.
What does this mean?
Lowe v Charterhouse gives landlords clarity on what mistakes the court may accept in connection with a deposit’s prescribed information.
However, as a matter of best practice, landlords should seek legal advice if they have any queries before they serve a tenancy’s housekeeping documents. This will ensure that the documents served are compliant and effective.
The risks associated with serving the prescribed information incorrectly are significant. It could mean the difference between whether a landlord can serve a ‘no fault’ eviction notice or not. This would inevitably make it much harder for a landlord to recover possession of their property.
At HCR we represent a number of portfolio landlords and have specialists in our Real Estate Disputes team who can assist you should you wish to obtain possession of your property or if you have made an error in your tenancy documents. If you would like assistance with this, contact us via our website.
For more information, contact Georgia Dinallo on 01223 447490 or at gdinallo@hcrlaw.com.
