Guidance issued on the Superstrike case

** Stop Press ** 

The  Deregulation Act has now received the Royal Assent and so the problem associated with the Superstrike case are now at an end.  Please see the blog post >> here.

I have left the information below up as an archive in case you want to know what the problem used to be!

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There is a brief case report here and links to relevant blog posts.

To remind you:

Superstrike v. Rodrigues

This is a court of appeal decision regarding a deposit which was taken before the tenancy deposit regulations came into force in April 2007, but where the tenancy ran on as a periodic after that time.

The Court held that as a periodic tenancy which arises under s5 of the Housing Act 1988 is a new tenancy, this meant that the landlord had an obligation to protect the deposit and serve the prescribed information at that time.

The reason for this is that the deposit had been paid in  respect of the previous tenancy agreement.  As that tenancy had ended and a new tenancy (albeit a periodic one) had taken its place, the deposit would be deemed paid back to the tenant and then repaid to the landlord to enable it to apply to this new tenancy. 

This notional repayment brought the deposit within the scope of the regulations and the landlord was therefore under an obligation to protect it and serve the prescribed information.  This needed to have been done before the 6 May 2012 (when the new regulations came into force).   

As the landlord believed he did not have to protect (and so had not done so), he lost his claim for possession.

At present is seems likely that this case will also affect deposits taken since April 2007.  So even if the deposit was properly protected at the time of payment, it will need to be re-protected and the prescribed information re-served every time a periodic tenancy arises.  As well as every time a new fixed term tenancy agreement is given to the tenant.

The tenancy deposit schemes should provide for the deposit protection to continue to a subsequent tenancy and so the real problem is the service of the prescribed information.  Many landlords will now find themselves in breach of the deposit regulations as a result of this. 

Guidance issued by the Deposit Schemes

The guidance is the same for all schemes - you can download it from My Deposits page >> here along with a briefing document with comments on the implications of the case.

Basically:

  • If your tenancy is still within the original fixed term

You are advised to check the deposit is still protected at the end of the fixed term and re-serve the prescribed information at that stage if the tenants do not vacate.

  • If your tenancy has renewed either as a new fixed term or as a new periodic tenancy

(Eg the tenants have just stayed in the property on a month to month basis).  If this happened less than 30 days ago - make sure you re-protect the deposit if necessary AND re-serve the prescribed information.

If the the tenancy renewed as a periodic or new fixed term more than 30 days ago - then it is likely you will be in breach already without realising it..

It is up to you whether you

  • Re-protect (if necessary) and re-serve the prescribed information now or (bearing in mind that most tenancies end amicably with the tenants moving out)
  • Re-serve the prescribed information just before you serve a section 21 notice (assuming the deposit is still protected).

This is all highly unsatisfactory and just shows what happens if legislation is not thought through properly.

I will post here if I hear any more news.

Tessa Shepperson

PS If you think you may be in breach there is a possible fix if you give the tenants a new fixed term tenancy agreement.  See the standard wording >> here.

Talk by Giles Peaker

Here is a video of a useful talk by Giles Peaker of Anthony Gold which was recorded (I think) in Setpember / October 2014.

 

 

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