Maximum penalty for Scottish landlord

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Steve Harriott, TDSJust 14 months on from the launch of tenancy deposit protection in Scotland the Courts have started to get their first cases for failure to comply with the legislation. The most recent case saw a landlord receive the full penalty for failing to protect a deposit; I have also written about another case in Scotland which saw a landlord fined £775 for getting the postcode wrong in relation to the Prescribed Information!

The new Regulations on deposit protection came into force in Scotland on 1 July 2012 and we are now seeing the first cases coming through the Sheriff’s Court.  The Regulations require the deposit to be placed with a custodial scheme within 30 working days of the receipt and for Prescribed Information to be given to the tenant within the same 30 working days period. 

In England and Wales the relevant timescales are 30 calendar days and in Northern Ireland 14 calendar days to protect the deposit and 28 days to supply the Prescribed Information. As far as we are aware there have not yet been any cases in Northern Ireland where the regulations went live in April 2013.
In Scotland, where these Regulations are not complied with then the tenant can apply to the Sheriff for a sanction and if the failure is proven:

• The Sheriff must order the landlord to pay the tenant an amount not exceeding  three times the value of the deposit; and
• May (as appropriate in the circumstances) order that the landlord should pay the deposit to an approved scheme; or order that the landlord should provide the Prescribed Information).

Maximum penalty: Ross Fraser & Alison Pease vs Andrew Meehan

In a case on 30 August 2013 in the Edinburgh Sheriff Court (Ross Fraser & Alison Pease v Andrew Meehan) the Sheriff decided that a deposit had not been protected under the Regulations. 
In this case a deposit was taken on a short assured tenancy in May 2009.  Under the transitional arrangements of the Regulations this deposit of £1,150 should have been protected by the 24th November 2012 by transfer of the deposit to a custodial scheme and the Prescribed Information should have been provided.  At the end of the tenancy 50% of the deposit was returned to the tenant following an agreement after a lengthy negotiation.  As the deposit had not been protected the tenants had not had recourse to an independent dispute resolution procedure in relation to the tenancy deposit dispute.  In this case the landlord was an experienced property professional and worked for a property agent.  However the Court found that he had failed to comply with the Regulations
As a result of the failure to protect the deposit and supply the Prescribed Information by someone the Court considered should be presumed to have special knowledge of the Regulations the Sheriff awarded exemplary damages of three times the deposit (a sum of £3,450).


It’s quite clear for this case that the Sheriff will use their discretion in the Regulations to award the maximum penalty of three times the deposit where they consider there has been a deliberate failure to comply with the legislation. 
Interestingly in Northern Ireland there is a  system of fixed penalty notices that can be issued by the local authority for such breaches for three times the deposit (or a fine of up to £20,000 in Court).
No doubt there will be more cases in the coming months in Scotland and Northern Ireland and we will continue to keep a watching brief on these matters.

Steve Harriott
Chief Executive
The Dispute Service


Posted by Steve Harriott, CEO on 10 September 2013

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