The CA has favoured a very restrictive interpretation of the Tenancy Deposit legislation, insofar it relates to L’s failure to lodge T’s deposit within the required timescale. In the court’s view, there is no penalty for protection later than 14 days – merely a penalty if there is a complete failure to protect at all. What this means, therefore, is that L can protect T’s deposit at any stage right up to the steps of the court house, and serve T with the prescribed information at that late stage, and escape the relevant penalties. Thus, L’s deadline for compliance is the court hearing itself – and not even the date by which proceedings are issued. 


Needless to say, many disagree with this judgment (including Sedley LJ who said that it ‘drains the legislative scheme of all effect by reducing the remedy for non-compliance to near-impotence’). But one point that has not been resolved is what happens if the tenancy has already ended, and whether L can then protect the deposit (after the end of the tenancy) and still escape liability. Logically it would seem not, but the issue remains unresolved. 


Some commentators have suggested that Ls who have previously paid the penalty may be able to claim it back; that would seem to be wrong (any court order for the payment of damages will be valid unless it is set aside or overturned on appeal, and most Ls will now be well out of time for any appeal). 


Whilst the penalty regime is now in tatters, it is worth making the point that the deposit scheme has not been complete wrecked; Ls still need to look after T deposits correctly since if the deposit has not been properly protected then all T needs to do is threaten court proceedings, which will almost certainly then result in L fixing the problem. Tiensia v Vision Enterprises Ltd [2010] EWCA Civ 1224 (access free at www.practicalconveyancing.co.uk). Source: http://nearlylegal.co.uk/blog.