LANDLORDS across Dorset should take extra care when registering tenants' deposits following a landmark legal ruling, a leading law firm has warned.
Battens Solicitors, which has offices in Dorchester, Weymouth and Sherborne, says ignoring the fine print of the 'Prescribed Information', required to be supplied to tenants within 30 days of receipt of the deposit, could leave property owners out of pocket.
In a case that turned on a narrow technical point, the Court of Appeal has ordered a landlord to pay a tenant £3,800 - four times the value of the deposit - because not all the necessary details were provided to the tenant in the Prescribed Information.
Edward Thompson, a solicitor in Battens' Property Resolution Department, said: "All landlords and letting agents renting property under an assured shorthold tenancy in England and Wales are required to secure deposits in a Government backed protection scheme. It is intended to ensure that tenants can get all or part of their deposit back at the end of the tenancy providing they are entitled to it. In Ayannuga v Swindells, the Court of Appeal has set a precedent that makes it clear the fine print of information advising tenants about the relevant scheme and their processes is not just a procedural formality."
The case concerned information about how the deposit was to be repaid, what would happen if either the landlord or tenant were not contactable at the end of the tenancy, and what the arrangements would be should a dispute arise, including how to access alternative dispute resolution.
Mr Thompson added: "While the landlord had covered off most of the Prescribed Information, what was written did not precisely match the statutory requirements. So when a dispute arose for rent arrears the tenant was able to obtain an order for a sum despite the landlord's claim for possession based on rent arrears. It is a salutary warning for landlords and agents alike about what can happen when things go wrong. As always, legal advice is recommended from the outset as prevention is better than cure."
The ruling, which may only be overturned if a further appeal is made to the Supreme Court, sets a precedent that potentially affects all privately let properties. As an indication of the numbers involved regionally, the South Somerset private rental market accounts for around 5,760 homes or 9% of the total housing stock. In North Dorset, around 3,000 homes or 11% of the stock are in the private rental market. In East Dorset, Poole and Weymouth & Portland, the figures are 7%, 12.2% and 13.7% respectively.
For more information, contact Battens on 01935 846000.