Taking a tenancy deposit from a tenant is standard practice for landlords, providing financial protection against rent arrears or damage. However, the law around tenancy deposits is strict, and even minor breaches can carry serious legal consequences.
A recent Court of Appeal decision — Lowe v the Governors of Sutton’s Hospital in Charterhouse [2025] EWCA Civ 857 — has shed light on how technical mistakes are viewed by the courts. Here’s what landlords need to know.
Tenancy Deposit Rules
If a landlord takes a deposit for an Assured Shorthold Tenancy (AST), they must:
- Protect the deposit in a government-approved tenancy deposit scheme, and
- Provide prescribed information to the tenant within 30 calendar days of receiving the deposit.
This is a legal requirement under Section 213 of the Housing Act 2004. Failure to comply can lead to:
- A tenant claim for breach under Section 214, which may result in the landlord being ordered to pay up to three times the deposit amount.
- A restriction on the landlord’s ability to serve a valid Section 21 notice to regain possession of the property.
What is Prescribed Information?
The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 outlines what landlords must provide. This includes:
- The amount and date of the deposit
- The rental property address
- Details of the deposit protection scheme used (name, address, contact info)
- Contact information for the landlord, tenant, and any third party who paid the deposit
- Circumstances under which deductions can be made
- The process for returning the deposit
- Details of the scheme’s dispute resolution service
- A certificate signed by the landlord confirming the accuracy of the information
- A copy of the scheme’s information leaflet (where applicable)
If any of these elements are missing or incorrect, the prescribed information may be deemed invalid — even if the deposit itself has been properly protected.
Common issues include an unsigned certificate or an incorrect reference to a clause in the tenancy agreement. These can open the door to legal challenges.
The Decision in Lowe v the Governors of Sutton’s Hospital in Charterhouse
The Court of Appeal’s decision in Lowe v the Governors of Sutton’s Hospital in Charterhouse has provided helpful clarity on how strictly the courts will interpret the prescribed information rules.
In this case:
- The landlord referenced a non-existent clause (“Clause 6”) in the prescribed information, when the correct clause was actually “Clause 5.3”.
- The certificate confirming the accuracy of the information was not signed, but the landlord sent a signed covering letter alongside it.
The court applied the Mannai principle (from Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997]) — which asks whether a reasonable recipient would still understand the intent, despite a minor mistake.
The Court of Appeal concluded that:
- The incorrect clause reference did not invalidate the prescribed information, as a reasonable tenant would still understand it referred to the relevant tenancy clause.
- The signed covering letter was “substantially to the same effect” as the signed certificate required under Section 213(6) of the Housing Act 2004.
What This Means for Landlords
The decision introduces a more practical and purposive approach to tenancy deposit compliance. Courts may be prepared to overlook technical errors, provided they do not materially affect the tenant’s understanding or rights.
However, this should not be seen as a free pass. Landlords must still ensure full compliance with the rules. The safest approach is to get everything right from the outset — particularly when it comes to the prescribed information, the courts are willing to be flexible over technical slip-ups. But don’t rely on that! It’s always best to get the paperwork exactly right.
Need Help with Tenancy Deposit Issues?
Whether you’re a landlord or a tenant, our Property Disputes team can help. We regularly advise on tenancy deposit claims and compliance issues. If you’ve got a question or concern, get in touch with our Landlord and Tenant specialists today.
Disclaimer
The contents of this blog or any other published by Talbots Law cannot be considered as legal advice. You should take no action without prior consultation with a qualified solicitor or legal professional. The contents of this blog refers to the process in England and Wales.