There is good news for landlords who receive a deposit from a tenant on a grant of a shorthold tenancy.

Section 213 of the Housing Act 2004 imposes a number of obligations on landlords of residential property who are in receipt of deposits from their tenants. Among other things, the landlord must comply with specified "initial requirements" and provide the tenant with certain prescribed information within 14 days of receipt of the deposit by the landlord.

A landlord who fails to comply with these requirements within the 14 day time limit risks a statutory penalty of three times the amount of the deposit.

In the recent case of Tiensia v Vision Enterprises Ltd, a landlord failed to protect the tenant's deposit within an authorised scheme and omitted to provide the tenant with the prescribed information within 14 days of receipt of the deposit.

However, the court held that the landlord had until the court hearing date to comply with the statutory requirements. The landlord complied with its obligations before the date of the hearing, albeit after the initial 14 day statutory period had elapsed, and so avoided a statutory penalty.

This is good news for landlords. It appears that, in practice, the statutory sanction of three times the deposit is unlikely to be imposed. Indeed, the court held that a tenant "ought to write a letter before claim to the landlord", thus providing the landlord with a further opportunity to comply with its obligations.