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Landlord appeals Court decision and gets deposit penalty reduced by £6,900

The case of Davies v Scott 2019 saw a Landlord appeal a County Court decision regarding the penalty for failing to protect the Tenant’s deposit.

At first instance, it was held that the Landlord misled the Tenant in relation to the status of the deposit. The Landlord had in fact breached by failing to protect the Tenant’s deposit. The District Judge stated that the respondent was a “professional landlord” and that this fact speaks to his culpability in relation to the protection of the Tenant’s deposit. The District Judge added that the fact that the Landlord was misleading the tenant placed this case among “the worst cases of this sort”. As such, the District Judge set the penalty at 3 times the deposit. This meant a sum of £13,800.

The Landlord appealed.

On appeal, it was held that the fact that the Landlord was intentionally misleading the Tenant was given an “inordinate amount of weight”. The Courts should instead look to the culpability of the Landlord, as creating a distinction between the acts of intentionally and accidentally misleading would place an extreme evidential burden on the Tenant. How is the Tenant supposed to prove that it was intentional rather than accidental? With regards to culpability, the “professional landlord” label that was used in the decision making does not have any statutory force behind it. With these 2 factors from the first instance decision revisited and revised, the penalty was reduced by half to 1.5 times the deposit. This meant that the penalty had been reduced to £6,900.

It is important to be clear on which factors Courts consider when it comes to deciding the penalty. If you need help regarding this or any other property issues then please contact us.

Email Simon Parrott

Email Nastassia Khilkevich

Lettings eBrief - 28 February 2020