23 Sep 2013

Pease v Meehan: A Landmark ruling on Tenancy Deposit Scheme

Pease v Meehan: A Landmark ruling on Tenancy Deposit Scheme

An Edinburgh Sheriff, Sheriff Mackie, recently issued a landmark judgement which considered a landlord’s failure to correctly allocate a tenancy deposit to an approved Tenancy Deposit Scheme. This case has highlighted the severe penalty landlord’s face should they fail to allocate a deposit to an approved tenancy deposit scheme timeously.

An Edinburgh Sheriff, Sheriff Mackie, recently issued a landmark judgement which considered a landlord’s failure to correctly allocate a tenancy deposit to an approved Tenancy Deposit Scheme. This case has highlighted the severe penalty landlord’s face should they fail to allocate a deposit to an approved tenancy deposit scheme timeously.

In this case a landlord leased a property to a tenant under a one year Short Assured Tenancy Agreement dated May 2009 which thereafter continued on a month by month basis and was most recently renewed on 13th October 2012. On 1st November 2012 a Notice to Quit was served on the Tenant who duly vacated the property on the expiry of the notice period. However, a dispute then arose when the tenant sought the return of his tenancy deposit which amounted to £1,150.00.

It later transpired that the deposit had not been deposited by the landlord on or before the statutory deadline of 24th November 2012 and as such he was in contravention of Regulation 3 of the Tenancy Deposit Schemes (Scotland) Regulations 2011. It was admitted by both the landlord and the tenant that the deposit had been paid by the tenant, that the landlord had failed to lodge it and, most interestingly, that an extra-judicial settlement had been agreed whereby the landlord returned half of the deposit to the tenant.

However, the tenant then proceeded to raise action on the basis that the landlord had failed his statutory due to correctly lodge the deposit in an approved scheme. The landlord claimed that he had been unaware of this requirement as he resided in Australia and property management was not his business.

Sheriff Mackie considered matters and, despite the lack of experience of the landlord and the preceding settlement payment, held that £3,450.00 was payable by the landlord to the tenant. Sheriff Mackie also highlighted that these payments should not be considered as compensation to the tenant but rather a sanction against landlords.

Alistair Johnston, Trainee Solicitor


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