We have a question today from Steward Szumski of West Dorset District Council on the question of tenancy deposits:
On a recent training course Ben advised that the law regarding protecting deposits had been tightened up as there were so many loop holes. One of the things mentioned was that the Landlord now has 30 days to protect a deposit, however, if a deposit is not protected within that timescale a valid s.21 could not be served. Ben advised that the only way around this for the Landlord was to return the deposit to the tenant (regardless of rent arrears & damage to property) and then serve notice.
I was wondering what the case would be if the tenant refuses to accept the deposit back from the Landlord. Would it mean the Landlord could never serve a valid notice and the tenant could just remain in the property as long as they wanted??
The first paragraph is largely correct. However if the tenant consents, then the landlord can deduct any money due from the deposit before refunding it (Ben tells me he did mention this in his talk). Also the landlord will not have to refund the deposit money if the tenant has already made a claim for the penalty which has been resolved in some way.
Your question is an interesting one. However I don’t think the tenant could prevent eviction by refusing to accept the money.
Turning to the act, what it actually says is, that a s21 notice can be served if:
the deposit has been returned to the tenant in full or with such deductions as are agreed between the landlord and tenant
The wording says ‘returned’ – there is no mention of whether the tenant accepts it or not. So my view is that so long as the money is offered to the tenant, they cannot prevent the landlord from using the s21 procedure by refusing to accept it.
I don’t have any actual authority for this as there is no case law on it, but I am pretty sure the Judges would agree with this view – otherwise it is unfair.