The case of Lowe v Governors of Sutton's Hospital In Charterhouse [2024] EWHC 646 (Ch) was recently heard in the High Court. It was concerned with some of the formalities that must be complied when a deposit is taken in connection with an assured shorthold tenancy. The issues that the case considered included the below:

  • Whether the landlord in the case provided the tenant with the requisite information about deductions being made to the deposit in compliance with the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 ("the 2007 Order").
  • Whether the landlord had complied with the provision of a certificate in respect of the prescribed information in compliance with the 2007 Order.

Legislation

  • Certain prescribed information must be given which complies with the 2007 Order. This prescribed information must be provided within 30 days of receipt of the deposit; this was previously 14 days up until 2011 when the legislation was amended.
  • Paragraph 2(1)(g) of the 2007 Order provides that circumstances within which a landlord may retain a deposit in whole or in part, must be confirmed. A landlord must also confirm that the information given is accurate to the best of their knowledge and belief by providing a signed certificate to the tenant.

Facts

  • A contractual tenancy was entered into in January 2010 ("the tenancy"). At the time the tenancy was not an assured shorthold tenancy ("AST").
  • The tenancy automatically transformed into an AST from 1 October 2010 by operation of law (due to the increase in annual rent limits for ASTs).
  • A document titled 'prescribed information' was sent to the tenant in September 2010. The document was designed to enclose the prescribed information as required under the 2007 Order. This was the only time that the landlord attempted to provide the tenant with the prescribed information.
  • Multiple tenancy arrangements were entered with the landlord and tenant between January 2010 and August 2015. A statutory periodic AST arose in August 2015 and this continues to run.

Issues

  • The document titled 'prescribed information' mistakenly referred to the wrong clause of the tenancy when confirming the circumstances within which the deposit would be released, or deductions may be made.
  • The document titled 'prescribed information' contained the wording of the requisite certificate stating that the information given is accurate to the best of the landlord's knowledge and belief, but the certificate was not signed. The covering letter enclosing the document titled 'prescribed information' was signed.

Held

  • The prescribed information as required under the 2007 Order, was correctly served in respect of outlining the circumstances in which the deposit may be retained. This is because the reasonable person would recognise that the document titled prescribed information contained an error and the reasonable person could reasonably locate the correct term in the tenancy.
  • The signed covering letter enclosing the document titled prescribed information satisfies the landlord's obligation under the 2007 Order to confirm that the information given is accurate to the best of their knowledge and belief by providing a signed certificate to the tenant. This is because the certificate was provided in a form substantially to the same effect and the signed covering letter fulfils the statutory purpose of the 2007 Order as the covering letter and document titled prescribed information were intended to be read together.

Key takeaways

  • Reference to the incorrect clause of an AST within the prescribed information may not be fatal to the prescribed information being correctly served so long as the reasonable person can recognise that there is an error and can identify the correct clause in the agreement.
  • An unsigned certificate within prescribed information may not be fatal to the prescribed information being correctly served if a covering letter enclosing the prescribed information is signed and is intended to be read in conjunction with the prescribed information.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.