Since April 2007, tenancy deposits taken in connection with assured shorthold tenancies must be protected by an approved tenancy deposit scheme. If the landlord fails to comply with the initial requirements of the scheme within 14 days of receiving the deposit, the landlord is prevented from relying on the mandatory ground for possession on two months’ notice and can be ordered to pay the tenant a penalty of three times the deposit. However, this apparently severe sanction is not as tough as it seems as the Court of Appeal has now confirmed that the landlord will not incur the penalty as long as the initial requirements of the scheme are complied with by the date of the hearing.  

Source: Housing Act 2004; Tiensia v Vision Enterprises Ltd and Honeysuckle Properties v Fletcher [2010] EWCA Civ 1224.