The Housing Act 2004 made it a legal requirement for landlords to protect their tenants’ deposits by placing them into an authorized protection scheme within 14 days. Once that has been done the landlord needs to give all the relevant details to the tenant. This is just a number of things you should supply to your tenant, such as emergency numbers, stop cock locations and landlord insurance amongst other things.

If the landlord fails to protect the deposit the tenant may be in line for a penalty award of three times the deposit. Suppose the landlord innocently fails to protect it, perhaps because of an administrative error by a third party? Does the penalty become payable?

The Court of Appeal recently decided that in such a case the penalty would not be payable as long as the deposit had been protected before the Court hearing. However it would be very unwise to make a habit of relying on this as a reason to delay protecting deposits. Apart from anything else you could be liable for substantial legal costs. It is quite easy to use one of the deposit schemes so make sure you stick to the 14 day time limit.