Restrictions on use of section 21 due to non-compliance with deposit protection

Restriction on use of section 21 notice if a landlord has not complied with the tenancy deposit protection scheme rules.

This content applies to England

When section 21 cannot be used

A non-compliant landlord or agent cannot use the section 21 notice procedure to end an assured shorthold tenancy while either the:[1]

  • deposit was not originally protected within the relevant time limits

  • deposit is not currently being held in accordance with an authorised scheme

  • landlord has not provided the tenant and any 'relevant person' with all the prescribed information within the relevant time limits

  • deposit consisted of property other than money

A section 21 notice served in any of these circumstances will be invalid, and will need to be served afresh after the relevant conditions are satisfied.

For information about the section 21 notice procedure and the other circumstances in which a section 21 notice could be invalid see section 21 notice.

Time limits

It is important to establish the relevant time limit for compliance with the tenancy deposit protection rules in order to ascertain if the restriction on the use of section 21 notices applies to a certain landlord/agent. Normally, the time limit for compliance is 30 days from receiving the deposit.

Failure to protect the deposit

A landlord who has not protected the deposit in an authorised scheme within the relevant time limits can serve a valid section 21 notice only  after either the:[2]

  • deposit is returned to the tenant or any 'relevant person' in full, or subject to any deductions agreed with the tenant

  • tenant and any 'relevant person' made an application to the court in respect of the landlord's non-compliance, and the claim has been either determined by the court, or withdrawn, or settled out of court between the landlord and tenant.

Failure to notify prescribed information

A landlord who has protected the deposit within the relevant time limits but has not given to the tenant and any 'relevant person' all the Prescribed information, can serve a valid section 21 notice only after either the:

  • landlord notifies the tenant (or any 'relevant person') with the prescribed information

  • deposit has been returned to the tenant or any 'relevant person' in full, or subject to any deductions agreed with the tenant

  • tenant or any 'relevant person' made an application to the court in respect of the landlord's non-compliance, and the claim has been either determined by the court, or withdrawn, or settled out of court between the landlord and tenant

Failure to return the deposit

It is arguable that the deposit is not returned to the tenant or 'relevant person' until they actually receives it, so that any section 21 notice served before then would be invalid.[3]

Renewal of tenancies and deemed compliance

Where a deposit has been protected within the time limit and the tenancy is replaced by a new tenancy (whether this is a statutory periodic tenancy or a new fixed term), the requirements will have been met in relation to the new tenancy if the:[4]

  • landlord and tenant are the same

  • premises are the same or substantially the same

  • deposit was protected during the previous tenancy

  • prescribed information was given during the previous tenancy

  • deposit continues to be held in the same scheme as when the prescribed information was given

The previous tenancy (known as the 'original tenancy in the legislation') does not need to immediately precede the new tenancy. The same conditions may apply if there has been a further fixed-term or periodic tenancy between the previous and the new tenancy.

If the same conditions are met, the landlord will be able to serve a section 21 notice as the requirements will be deemed to have been fulfilled in relation to the new tenancy. This applies even if the deposit was protected, or the prescribed information was served, outside of the required time limits in the previous tenancy.

Change of landlord

The purpose of the prescribed information is to provide the tenant and any 'relevant person' with all the necessary information to resolve any disputes relating to their tenancy deposit. In one case, it was held that where the new landlord did not provide the tenant with an updated version of prescribed information despite having the tenancy deposit protection scheme account transferred to them, the section 21 notice they served was invalid.[5]

Last updated: 17 March 2021

Footnotes

  • [1]

    s.215 Housing Act 2004, as amended by s.184 Localism Act 2011; Khuja v Chowdhury [2015] EW Misc B18 (CC).

  • [2]

    s.215(2A) Housing Act 2004, as inserted by s.184 Localism Act 2011 and amended by s.31 Deregulation Act 2015.

  • [3]

    Chalmiston Properties Ltd v Boudia [2015] Barnet County Court (27 October 2015), reported on Nearly Legal on 29 October 2015.

  • [4]

    s.215B Housing Act 2004 as inserted by s.32 Deregulation Act 2015.

  • [5]

    Sebastiampillai v Parr [2019] Central London County Court (11 April 2019), reported on Nearly Legal on 6 May 2019 - note that this is a non-binding decision.