The Court of Appeal considered if a notice under section 21 of the Housing Act 1988 (section 21 notice), seeking possession of a property let under an assured shorthold tenancy was valid if, at the time it was served, a security deposit paid in respect of the tenancy was not protected in accordance with the statutory scheme provided under the Housing Act 2004.
The Court of Appeal held that, because the deposit was received by the landlord before the tenancy deposit scheme came into force, the landlord was not subject to any of the penalties the legislation specifies for failing to register the deposit or for not giving the tenant the information it is due.
While the landlord was not directly obliged to register this deposit, because of when it had been received, the landlord could only serve a section 21 notice if the tenancy deposit was protected at the time of service or the deposit had been returned to the tenant. The landlord had served its section 21 notice without protecting the deposit under one of the authorised schemes, or returning the deposit to the tenant, so the notice was invalid.
However, the landlord would not be liable for the financial penalties imposed by section 214 of the Housing Act 1988.
(Charalambous and another v Maureen Rosairie Ng and another  EWCA Civ 1604 (16 December 2014).)