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Written by: Dan Sandler
Date: 4th August 2015
The Deregulation Act 2015 came into force on 26th March, 2015 and extended the necessity to protect deposits on Assured Shorthold Tenancies granted before April 2007, as well as, providing Landlords with an amnesty period to retrospectively protect any deposits that they held by 23rd June, 2015.
So, if a Landlord took a deposit on a tenancy since 6 April, 2007 and protected and served the Prescribed Information, and the tenancy has since either rolled into a Statutory Periodic Tenancy after the fixed term of the tenancy expired or been renewed, then as long as the deposit is still protected in the same scheme and the tenancy details have not changed, the Landlord will be deemed to have complied. In other words, this specific change overturns the Court of Appeal decision in Superstrike .v. Rodrigues.
The clarification in the law provides more protection to Landlords who could, up until the change, be faced with a fatal defence to their possession claim if they had failed to serve the Prescribed Information upon their tenants at the time of the initial tenancy and at the time each replacement tenancy was entered into.
If the Statutory Periodic Tenancy has ended before 26 March, 2015 or, the whole deposit is no longer being held before that date, the Landlord is viewed as having complied with the requirements of deposit protection within the appropriate time-scales and there are no penalties for Landlords in those circumstances.
If a Landlord took a deposit on an Assured Shorthold Tenancy before April 2007, it subsequently rolled into a Statutory Periodic Tenancy or it was renewed after April 2007 and the tenancy was still in existence on 26th March, 2015, then the deposit must have been protected and Prescribed Information served by 23rd June, 2015. A landlord will not be able to serve a Section 21 notice and WILL be liable for financial penalties for non-compliance until they have protected the deposit and they may not be able to recover possession from the tenant.
In addition, the fact that the changes have a retrospective effect also mean that landlords who have recently had their possession claims dismissed could take steps to appeal that dismissal.
Despite the changes, it is important to remember that there must have been some protection originally and the correct Prescribed Information given for this to apply. So, if a Landlord failed to give correct Prescribed Information originally, they will have also failed for each renewal or Statutory Periodic Tenancy.
There is no change to the current rules that Prescribed Information can be given late to allow service of a section 21 notice but the Landlord can face a penalty of between one and three times deposit plus return of the deposit which they could be ordered to pay if the tenant applies to the Court for compensation.
The final change (which isn’t in relation to Superstirke) allows the agent’s details to be used on the Prescribed Information where they have taken and protected the deposit on the landlord’s behalf. Previously there was doubt as to whether the agent’s details could be provided instead of the landlord’s when the agent took the deposit and protected it on the Landlord’s behalf.
For further advice and information please contact Sallyann Vipond on 0161 928 9321.