Articles
Always Make Sure you have Protection
Publicans with flats within their pubs have historically let these flats out to 3rd parties despite the possibility that if they occupy under a lease, their lease may well prohibit this
However there has been another recent issue to grapple with besides potentially breaching the terms of your lease
Since April 2007 there has been a change in how private landlords administer their tenants deposit which can lead to an expensive outlay for something which started out as a way of making ends meet.
Under the Housing Act 2004, properties let on Assured Shorthold Tenancies are required to comply with a number of statutory procedures. Including protecting tenants deposits within 14 days of receipt by either holding the deposit in a Tenancy Deposit Scheme or taking out insurance.
The potential cost of failing to comply with this requirement was an order by the court to return the deposit to the tenant, and then pay the tenant 3x the amount of the deposit.
Until very recently the law surrounding this punitive sanction was unclear. However the Court of Appeal has resolved the issue in the recent conjoined appeal case of Vision Enterprises Limited (t/a Universal Estates) v Tiensia and Honeysuckle Properties v Fletcher and others.
Prior to this case and as a result of poor drafting, no one not even the courts were sure what happened if the landlord initially failed to protect the deposit within 14 days but subsequently rectified this error.
In some cases the courts decided that if the deposit had been protected albeit after the 14 days, then this was acceptable. While in other cases the Courts ordered the landlord to pay to the tenant a sum of 3x their deposit
The Court of Appeal decided that so long as the landlord does eventually comply with the requirement, the tenant has no cause of action. But if proceedings have already been started before the landlord complies with the requirement and they then subsequently comply, the landlord must pay for the costs of the proceedings.
For further advice on the above or any other property issue please contact us on 020 7354 3000. Alternatively see our retail and hospitality or commercial property sections for more information.
Author: Simon Tennant
Published: Published as part of a monthly series of property law columns in the Publican Magazine written by Colman Coyle.
Date: January 2011