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What is the legal process for claiming tenant deposit compensation?

By Brad Askew on 05/11/2014 with comments

The law on tenancy deposits comes from The Housing Act 2004 (as amended by the Localism Act of 2011). The act sets out how you can claim compensation from your landlord if he fails to protect your deposit.


If you wanted to claim compensation from your landlord for failing to protect your deposit (by not putting it in a tenancy deposit scheme) within 30 days, you could go to court to claim compensation. It’s important to mention here that you should try and resolve the dispute before going to court. Whether through mediation or another dispute resolution method. The use of the courts should be your last option. This is due to how expensive the courts are to use. The court you’d go to is the County Court. The County Court is the lowest court of authority in civil law and will hear small claim cases such as tenancy deposit disputes. You have 6 years from the date of your deposit to issue a claim to the court so there’s no rush!

The county court is a court of first instance (where a civil case is first heard in the trial process). The small claims court is where most tenancy deposit disputes are heard and is part of the county court, dealing with claims under £10,000. The idea of the small claims court is that anyone can represent themselves, you can use a legal professional to represent you but the cost would be so much that it wouldn’t be worthwhile in relation to your claim. You will go to the small claims court, as your claim will most likely be under £10,000. There is no jury here just a judge.


If your landlord has not protected your deposit within 30 days then the judge in the county court will order that they repay you the deposit and award you compensation too. But how is compensation calculated? The act states that compensation should be no less than your deposit and no more than three times the amount.

The way compensation is calculated is dependent on the overall conduct of your landlord. Say for example your landlord has made an honest mistake and has protected your deposit but is one or two days late, the court will take this into account and probably award you just the value of your deposit in compensation.

Alternatively, if your landlord never intended to protect your deposit, the judge may award you up to 3 times the amount as compensation. It is entirely up to the judge to decide how much compensation you should be awarded and they will look at the overall conduct of your landlord when making their decision. The important point here though is that the amount of compensation you can be awarded ranges from one to three times the value of your deposit.

However. there are fees you’ll have to pay when issuing a claim in court. To start your claim in the county court you’ll need a N1 form. This will allow you access to the courts but does require a fee. On the form you should state why your are claiming and what your claiming for. If you win your claim your landlord will reimburse you for this fee.

The size of the fee depends on your claim and in this instance should be relatively low. (Between £80-£200). If you do decide to act for yourself you will obviously save legal fees, however if you choose to use a solicitor you will have to pay for their time which won’t be cheap. An important point here is that win or loose you will have to pay your solicitors fees in the small claims court so it is probably best not to use them in court as they’ll be very expensive. Perhaps ask them for advice before going to court instead.


After you’ve sent your N1 form into court and they’ve checked it’s okay they will send this form to your landlord along with court proceedings. This letter sets out your claim to the landlord and gives them the option to either settle now and pay you straightaway or disagree with your claim and go to court. There will be a deadline for your landlord to reply within, normally 14 days, if he wants to avoid going to court. If they decide to go to court they have an extra 14 days to prepare their argument. Once the court receives your landlord’s reply they will then set a date for the hearing.

The procedure in the small claims court is intended to be simple enough that you don’t need a solicitor. Before the trial you’ll have to pay a hearing fee and you may be asked to bring certain documents with you. (Such as proof of your tenancy agreement and any documents relating to your deposit). Remember if you win your case your landlord will have to pay you back for the hearing fee and your N1 claim fee.

In the small claims court you don’t need any witnesses or detailed evidence. All you will need are forms of written evidence relating to your tenancy and deposit. At the trial there will be a judge, the other party and you. The small claims case will be heard in the county court in a small court room or in the judge’s chambers (office). As the matter is quite small when relating to tenancy deposits, it’s likely the judge will settle the issue at the first hearing. However if you’re not able to agree they may set a date for a further hearing.

The timescale of the whole process really depends on how busy your local county court is. Usually though, it will take between 3-6 months from issuing your claim to the hearing, where you will find out if you are entitled to compensation or not. 


Written by Rory Jutton.  
Rory is a first year law student at the University of the West of England. Although only just starting his legal studies, Rory is really passionate andenthusiastic about the law. He has a particular interest in Tenancy Disputes. After finishing his degree, Rory hopes to become a solicitor.