Last month's ruling by the Court of Appeal could
mean that private landlords who unwittingly broke the law with
regard to deposit protection will face legal action from their
tenants.
The ruling, which has been accused by landlords of lacking
"common sense", comes from the case of
Superstrike Ltd vs Marino
Rodrigues, where the tenant remained in her previous
property after it became mandatory, in April 2007, for deposits to
be protected. At this point, the court has ruled, the landlord
should have protected the deposit.
The Court's ruling means that whenever a deposit has
become periodic, then it needs to be re-protected by the landlord
or agent responsible for handling the tenant's deposit.
This effectively means that a tenancy which becomes a
statutory period tenancy is not a continuation of the previous
fixed-term tenancy, but must be treated as a whole new
tenancy.
Court of Appeal rule goes against deposit schemes'
guidance
This runs contrary to the advice supplied by some deposit
protection schemes: for example, My Deposits advise that there is
no need to provide new deposit protection is a scheme moves from
fixed-term to statutory periodic. Other schemes may simply request
that they are informed of any change in the terms of the tenancy,
without demanding that a new tenancy be created.
Lawyer Tim Briggs responded to the results of
Superstrike Ltd vs Marino Rodrigues
by issuing a series of guidelines for concerned agents and
landlords:
"1) All tenancy deposits should be re-registered at the
end of the fixed period of the tenancy, or the landlord is not in
compliance with s.215 of the Housing Act 2004, and therefore no
valid Section 21 Notice can be served.
2) If the deposit is registered at the beginning of the fixed term
before 6 April 2007, but the periodic tenancy begins after 6 April
2007, the deposit needs to be re-registered.
3) If the deposit is not registered before 6 April 2007 and the
periodic tenancy started before that time, there is no need to
register money taken for a deposit."
