In the case of Tenzin v Russell & Clark the landlords appealed to the Sheriff Principal against a decision to hold them liable to pay their tenant three times the deposit taken, having failed to lodge the deposit in a 'tenancy deposit' scheme. At the Appeal, Sheriff Principal Stephen upheld the previous decision and deemed the penalty reasonable to promote compliance with the Tenancy Deposit Scheme (Scotland) Regulations 2011.
Following Sheriff Principal Stephen's decision, Russell and Clark appealed further to the Inner House of the Court of Session.
The landlords submitted three grounds for appeal:
- Competency of Summary Application as a whole-
The landlords stated that the tenant's application to have the court affirm their right to payment under Regulations 9 and 10 was incompetent as their case was based on breach of Regulation 3; namely that a deposit received by a landlord must be paid into a relevant tenancy deposit schemed within 30 working days of the beginning of the tenancy.
- Competency of the insertion of a payment crave-
The landlords believed that the original Sheriff had been mistaken in allowing the tenant's application to be amended by including a request for payment.
- The sum awarded was excessive -
The landlords asserted that the Sheriff should have taken the short period of time in which they had failed to place the tenant's deposit in an approved scheme into consideration when deciding to impose the fine. They stated that the wording under Regulation 10 did not obligate the Sheriff fine them three times the taken deposit.
The landlord's appeal was ultimately refused, and the original decision was once again upheld.
Delivering the opinion of the Inner House, Sheriff Principal Pyle, sitting as a temporary judge; stated that the landlords' submissions with regard to competency were "over technical", and that there would have been no doubt the tenant's would be seeking an award of payment when they made the application. In addition to this, the Inner House held that it was competent and necessary for the tenant to prove the landlords had breached their obligations under Regulation 3 when seeking remedy under Regulations 9 and 10.
With regard to the assertion that the sum awarded was excessive, the Inner House ruled that the presiding Sheriff had decided that the breach by the landlords was serious. Accordingly, the Appeal Court had no reason to take fault with the original decision.
For more information or advice on tenancy deposits, please don't hesitate to get in touch with our experience private rented sector team.
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