ARTICLE

Neophytou v Smitka & Smitkova (2016) Barnet County Court - DDJ Solomon

In 2010 N granted a 12-month tenancy of a three-bedroom house to their agents, MML. MML in turn granted an assured shorthold tenancy to S. S paid a deposit of £2,100. When MML tried to take accelerated possession proceedings in 2012, they were dismissed because the claimant had not signed the claim form, the deposit had not been protected in accordance with the Housing Act 2004 and the section 21 notice expired on the wrong day. N were dissatisfied with MML and terminated their arrangement so that N became S’s direct landlord.

S had agreed a lower rent with MML but N refused to accept this. They issued section 8 possession proceedings on the grounds of rent arrears. S counterclaimed for damages for disrepair and failure to comply with the deposit provisions of the Housing Act 2004. On 12^th June 2015 the parties settled all claims on the basis that N would pay £3,000 direct to S’s new landlord before S moved out. However, S were all packed to go, just waiting on the money, but N refused to pay it. The agreement collapsed and S stayed. The consent order which set out the settlement agreement had provided that the previous proceedings would be dismissed if no-one applied to restore them by 31^st August 2015.

On 10^th August 2015 N served a fresh section 21 notice. In November, they took fresh accelerated proceedings. S defended on the basis of non-compliance with the deposit provisions of the Housing Act 2004. Initially, N claimed that there had been no deposit at all but only an “incentive payment” to MML. However, two weeks before the final hearing, N changed their position. They now admitted that there had been an unprotected deposit but relied on section 215(2A) which says that the prohibitions on giving a section 21 notice do not apply in a case where—

1. the deposit has been returned to the tenant in full or with such deductions as are agreed between the landlord and tenant, or
2. an application to the county court has been made under section 214(1) and has been determined by the court, withdrawn or settled by agreement between the parties.

N had sent an amount equal to the deposit to S just two weeks before the hearing, 8 months after serving the section 21 notice. N argued that when s.215(2A)(a) said “the deposit has been returned” it meant at any time before the hearing. DDJ Solomon agreed with S that s.215(2A)(a) had to be read together with the previous subsections and clearly meant that the deposit had to have been returned before the section 21 notice was served.

S’s counterclaim in the previous proceedings amounted to an application under section 214(1). N argued that the court had determined that application when it dismissed the proceedings and the application had been settled by agreement in accordance with s.215(2A)(b). DDJ Solomon again agreed with S that a dismissal was not a determination. She further held that, although the parties had intended to settle the case, neither party now regarded the agreement as still in existence, e.g. N still alleged the existence of rent arrears arising from before the agreement.

The claim was dismissed with costs.