The following letter from our Chief Executive, Joanna Kennedy, was published in the most recent issue of The Law Gazzette:
The Court of Appeal has driven a coach and horses through the tenant deposit scheme inserted into the 2004 Housing Act to protect tenants against the widespread abuse by landlords of the rental deposit system. This provision which required landlords to keep deposits with a third party was designed to prevent landlords from, effectively, robbing tenants. The loss of this protection can have a devastating impact on low income or vulnerable tenants in the current climate.
I was a solicitor for over 30 years and now run an charity which helps those on low incomes negotiate the civil justice system. We have recently had a proliferation of very vulnerable clients who are either on the brink of homelessness or forced to remain in substandard conditions because of their inability to recover their deposits. One mother , living on benefits , in desperation at the appalling conditions in her flat , moved ,borrowing the money for a deposit on a new property. Her landlord would not repay the deposit so we helped her to issue proceedings for recovery . Just before trial the landlord repaid the deposit and issued a counterclaim for several times the value of the deposit for damages for spurious allegations of disrepair. The recent cases mean that the landlord will suffer no punishment for having forced this vulnerable tenant into the stress and anxiety of court proceedings and has deprived her of the opportunity to have any issue of disrepair dealt with by the alternative dispute resolution procedure set up by the scheme .
This is yet another example of the odds being stacked against the disadvantaged at a time when the devastating cuts to the whole advice sector means that there will be very little support available to help them find redress,
The Court of Appeal will of course say that they were only interpreting a poorly worded statute. However the decisions suggest they were influenced by the punitive effect of the penalties in the scheme on non compliant landlords so they chose to let landlords off scot free whatever the impact on tenants.
Shelter have tried to persuade the government to amend the legislation to restore the tenant’s protection with no success. The whole saga is yet another example of how our current legal system and its funding favours the more powerful over the less.