In 2005 a tenant with an assured shorthold tenancy paid a deposit of £1, 000. In November 2007, the landlord granted the tenant a further one-year tenancy. This tenancy also required payment of a £1, 000 deposit, but the landlord kept the original deposit and was not paid another. In June 2008 the landlord served a Housing Act 1988 section 8 notice seeking possession because of arrears of rent. The tenant said that as the landlord had failed to protect her deposit, she wished any compensation for this to be offset against the rent arrears. Four months rent was unpaid at the date of the possession hearing.
A District Judge held that
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