Nyree Applegarth, a Partner and Head of Property Disputes, examines the recent case of a tenant who brought a deposit penalty claim against his landlord for not properly protecting his deposit.
Since the government introduced legislation requiring landlords to lodge tenancy deposit monies in a government-approved scheme (and permitting tenants to claim up to three times the value of the deposit in compensation if it has not been properly protected), there has been a wealth of litigation in this area.
In the recent case of Lowe v Governors of Sutton’s Hospital in Charterhouse, another issue arising from this scheme was examined by the court. The tenant brought a claim against the landlord for failing to properly protect the deposit. It was common ground the claim was a statutory claim and therefore the limitation period is 12 years, unless section 9 of the Limitation Act 1980 applied, in which case it was a six-year period. The tenant argued the claim was not statute barred to a six-year period as it was not a claim for repayment of monies already paid out and that therefore there was no “recovery”.
The tenant argued further that if his claim succeeded, he would be awarded payment for the first time.
The judge disagreed with the tenant’s approach, considering this was contrary to the wide meaning given to “recover and recoverable”, which treated recovery as including the obtaining of money not previously paid out by one party to another.
He noted there were many examples of legislation that provided for the payments of penalties, awards, contributions or compensation, even where a claimant has made no prior payment, and he considered they were subject to a six-year limitation period.
Effectively, it means for the purposes of section 213 (6) of the Housing Act 2004, if a landlord fails to comply with legislation and there is a breach, then time will start running for limitation purposes.
