Since the introduction of deposit protection legislation there have been a steady flow of court cases arguing various points, notably with tenants trying to get the penalty of three times the deposit ! Tens of thousands of pounds have been paid out in compensation where rules have not been strictly adhered to.

In what is believed to have been the first case to go to a higher court, an agent who protected the deposit, but after the 14 days stated in section 213(3) of the Housing Act 2004, avoided having to pay the penalty.
Unless the case is appealed, this judgement is now binding on all county courts for the same facts.

In this case the deposit was protected in the custodial scheme, but later than 14 days allowed by law. It was, however, protected before the tenant commenced court action for the recovery of the deposit and penalty.
Very importantly the legislation dealing with the penalty only refers to section 213(4) (the need to comply with the initial requirements of a scheme) and not section 213(3) (the need to do it in 14 days).

Although The DPS rules do refer to 14 days the judge felt that unless this was specifically stated to be an initial requirement of the scheme, it was simply restating the law. The Dispute Service scheme rules do specify the 14 days as a specific “initial requirement” of the scheme and so could easily result in a different judgement.

The full judgement can be read at http://bit.ly/aFa5D7