Commentary on Sections Part 6 Section 215: Sanctions for non-compliance
505.The landlord may not serve a notice under section 21 of the Housing Act 1988 at any time where a deposit is not being safeguarded in accordance with an authorised scheme or where either the initial requirements of the scheme have not been met or the prescribed information regarding the safeguarding the deposit has not been given. Under section 21 of the Housing Act 1988 a landlord can obtain an order for possession of an assured shorthold tenancy at any point after the first 6 months of the tenancy providing that any fixed term has expired and that they have given the tenant at least 2 months notice. This is sometimes referred to as the ‘notice only’ ground for possession as there is no need to prove fault on behalf of the tenant.
506.A landlord also cannot use this ‘notice only ground’ for possession while they are holding a deposit which could not be lawfully required, i.e. one which consists of something other than money.