The High Court in Lowe v Charterhouse [2024] EWHC 646 (Ch) has dismissed an appeal as to whether a landlord complied with requirements to provide prescribed information in relation to a tenant's deposit.
Mr Lowe, the Claimant, entered into a contractual tenancy on 4 January 2010 with Charterhouse, the Defendant, and at the commencement of the fixed 12-month tenancy paid a deposit of £3,300.
At the time the tenancy did not qualify as a shorthold tenancy because the annual rent paid was above the specified limit which was £25,000. The relevant limit was increased from 1 October 2010 to £100,000 and so the tenancy then automatically became an assured shorthold tenancy. Assured shorthold tenancies qualify for specific protection for tenants' deposits. A deposit must be dealt with in accordance with an authorised scheme and certain prescribed information must also be provided by the landlord to the tenant within a time-limit of 30 days.
If the requirements are not complied with then there are certain consequences that can arise including that the deposit must be repaid to the tenant or paid into a designated scheme account, the landlord can also be made to pay a penalty to the tenant of the same value as the deposit or up to three times as much.
The facts
In September 2010, the landlord's agents sent Mr Lowe a letter enclosing required information about the designated scheme under which the deposit was to be held and a form headed "A – Prescribed Information". This form mistakenly referred to "Clause 6 of the Tenancy Agreement attached". However, no tenancy agreement was attached and the provisions about the use of the deposit were not in clause 6. There was a second issue in that the letter sent to Mr Lowe was signed but the Prescribed Information Document containing an appropriate certificate was not signed.
As a result of various renewals, there were a total of 8 different tenancy arrangements between Mr Lowe and the landlord.
The claim
In the initial claim, the Claimant made the following main points:
- The deposit required protection.
- Charterhouse, the Defendant, had failed to provide the prescribed informed as required.
- The prescribed information was deficient in that it was not signed.
- There was a total of 8 tenancies and so there were also 8 separate deposits and so on this basis he claimed he was entitled to 8 separate penalties.
The County Court rejected Mr Lowe's claim determining as follows:
- Although the Prescribed Information Document referred to the wrong clause "clause 6", the Claimant should have known to look instead at clause 5.3 of his own tenancy and so it satisfied the statutory requirements.
- It did not matter that the certificate in the Prescribed Information Document was not itself signed as the covering letter had been signed and was sent and received by the Claimant.
- The deposit paid by the Defendant was paid in connection with a shorthold tenancy as his original tenancy had automatically become one or because his later tenancy was one from the start.
- The relevant limitation period is 6 years and so the majority of Mr Lowe's claim was time barred.
- There was no further agreed fixed term and so there were only 7 tenancies between the parties.
- The Defendant's pleaded claim did not mention the deposit and only sought that there was a payment of a penalty.
The Appeal
Mr Lowe appealed the decision, and the Judge dismissed the appeal and concluded that although there was an error in that the Prescribed Information Document referred to "clause 6" there was no real prejudice to Mr Lowe. The Judge also found that the although the notice was unsigned it had a signed covering letter and so was a form "substantially to the same effect". Finally, the Judge found that there was a limitation period of 6 years for this claim under section 9 Limitation Act 1980.
This case will be welcomed by landlords who find themselves defending tenancy deposit claims because of minor issues with prescribed information. Nevertheless, it remains important to strictly comply with the requirements for such deposits.
