Garner & Hancock, Landlords Legal Services

Landlords Beware

Serving the prescribed information on your tenant

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[Photo by oatsy40 from the Flickr pool]

You need to read on if….

 you have a tenant that you have not renewed their tenancy after the expiry of the Assured Shorthold Tenancy

The Case that Changed everything

It is no exaggeration to say that the case of Superstrike Ltd. v Rodrigues [2013] EWCA Civ 669 has drastically shaken up the way that Assured Shorthold Tenancy deposits are protected.

2014-11-02-13.00.20Must, Must protect the deposit

The requirement to protect deposits under a Tenancy Deposit Scheme arose with the Housing Act 2004, specifically section 212, and any deposit received on or after 6th April 2007 has had to be protected in one of the authorised schemes.

The Schemes to protect your deposit

The four authorised schemes offered different types of protection either

  • An insurance type scheme under which they would insure the deposit for a fee;
  • A custodial scheme whereby they would hold the deposit on account
  • Held by an agent in one of their deposit schemes
  • No deposit held

Failure to comply – The Consequences

Failure to comply with the new requirements would mean a landlord could be liable for sanctions and he tenants could claim damages of up to three times the value of the deposit.

Any section 21 notice served while the deposit was not protected would not have been validly served on the tenants. These remedies are open to the tenant where the landlord has in anyway failed to comply with the initial requirements of the tenancy deposit scheme, i.e. protecting the deposit and serving on the tenant the prescribed information relating to the deposit within 30 days of receipt of the deposit by the landlord or his agent.

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When a tenancy finishes but is not renewed

At the end of the fixed term of the tenancy, the tenant remained in the property on a periodic tenancy. The landlord did not re-send the prescribed information, nor re-protect the deposit. The Court of appeal found that the periodic tenancy which arose at the end of the fixed term was a new tenancy for the purposes of protecting the deposit. The landlord therefore was in breach of his requirement to protect the deposit and serve the prescribed information on the tenants within 30 days of the start of the tenancy or receipt of the deposit monies.

Serving the prescribed information

Because of this breach, the landlord would not be able to serve a section 21 notice on the tenant, and could be liable for three times the deposit sum in damages to the tenant, despite the fact that the tenant moved in prior to April 2007 and so the landlord did not think that tenancy deposit scheme rules applied.

Equally when serving section 21 notices, landlords should be more careful than ever about making sure the deposit protection scheme requirements have been complied with.

2014-10-13-21.19.05Garner & Hancock Landlords Service 2016

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