In the summer of 2013, the Superstrike vs Rodrigues case saw the implementation of a law change that would affect landlords up and down the country.
Since the tenancy deposit regulations came into force in April 2007, landlords in the UK were required to put tenants’ deposits into a protected scheme and serve Prescribed Information at the start of each new tenancy if they let their property on an assured shorthold tenancy agreement.
Usually these agreements lasted six months, at the end of which the agreement would become periodic on a month by month basis or renewed for another set term. Under such circumstances where the same tenant remained in the same property, no further action was taken with regards to the deposit.
However, when the Superstrike case arose, tenancy deposit protection was thrown into the spotlight. It resulted in a court ruling that the periodic tenancy which arises under s5 of the Housing Act 1988 at the end of a fixed term where the tenant stays on, is in fact a new tenancy. Therefore the deposit would need to be re-protected and the Prescribed Information re-served.
This meant that scores of landlords were at risk of having claims brought against them by their tenants despite believing that they had acted legally and ethically.
However, landlords can at last relax at the end of the rules following the Court of Appeal decision in the Superstrike vs Rodriguez case.
The amendments in the Deregulation Act 2015, which received the Royal Assent on 26 March 2015, came into force with immediate effect and the tenancy deposit rules are now as follows:
Deposits taken before April 2007 where the tenancy became periodic after that date
All deposits must now be protected and the Prescribed Information (PI) must be served. Landlords have been given a period of 90 days to deal with this – i.e. until 23 June 2015.
If landlords protect and serve the PI within this time, the deposit will be treated as if it had always been protected. If they don’t, they will be in breach – so this is a get out of jail clause for many landlords. If you are one of them, take action immediately!
Deposits taken after April 2007 that have been protected and the Prescribed Information served during the original fixed term
These will be treated as if the PI had been served on every renewal or whenever a statutory periodic tenancy arose – even if the PI was served late initially, as long as the deposit continues to be protected with the same protection scheme.
So great news - landlords no longer need to keep re-serving the PI or re-protecting the deposit.
Deposits taken before April 2007 which became periodic before that date
Here landlords are not in breach of the law and they don’t have to protect the deposit now.
However, the deposit must be protected or the money returned to the tenant (or the person who paid it) before any S21 notice can be served. Landlords will not be liable for any financial penalty for non-protection.
The new rules will not help you if you have failed to protect a deposit taken after April 2007.
Court proceedings
If landlords are involved in court proceedings for possession, they can take advantage of the new rules, unless their case was concluded some time ago and you are out of time to appeal.
Letting agents
The PI rules have also been amended to allow for agents’ details to be given instead of landlords’ details where the agent is dealing with the deposit.
