Landlords have been required since the 6 April 2007 under the Housing Act 2004 to protect tenants deposits using an authorised Tenancy Deposit Scheme if they let a property on an assured short hold tendency. A tenant is required to be notified by the landlord within 14 days that this has been done. The act created a system of penalties for a landlord who failed to meet this requirement.

However in a recent Court of Appeal case a tenant had taken legal action against his landlord because the landlord had failed to lodge the tenants deposit with one of the authorised schemes. By the time the action had been brought the landlord had however put the position right. The court therefore had to decide whether the tenant could bring an action given that the failure had now been rectified by the landlord.

The court decided that he could not. They found that if the landlord had rectified the situation before proceedings are brought by a tenant the tenant has no cause of action against the landlord.

It would therefore appear that the landlord who fails to comply with the law can do so with impunity until proceedings are brought by the tenant. It should be noted however that if the landlord has not fulfilled his obligations with regards to the tenant's deposit an application for possession of the property would not be successful.