News
Letting Agents and Landlords: You only have until 23rd June 2015 to check whether you have protected deposits taken before April 2007
Liam O’Shea, Director and Solicitor in Astle Paterson’s Dispute Resolution department discusses the urgent need for Letting Agents and Landlords to check whether their Tenants’ deposits have been properly protected in light of new rules.
Liam said, “Lettings Agents and Landlords will remember, with some concern, the effects of the case of Superstrike Ltd v Rodrigues [2013] EWCA Civ 669 which related to an Assured Shorthold Tenancy entered into prior to 6th April 2007 (when the original rules for protecting deposits came into force.)
In that case, the appeal Court set out that where a tenancy was signed before 6th April 2007 and the tenant remains in occupation of the property after the fixed term (and after 6th April 2007), a landlord was required to protect the deposit and give his tenant the prescribed information relating to the deposit.
The Court stated that the statutory periodic tenancy, which arises immediately after the end of the fixed term of an Assured Shorthold Tenancy, was a ‘new tenancy’ within the meaning of the deposit rules and therefore the landlord was required, within 30 days after the end of the fixed term of the Assured Shorthold Tenancy to comply with the deposit regulations.
This case has been a cause of constant headaches for Landlords up and down the country since!”
Liam continued, “In a direct response to assist with the Superstrike problem, the Government has passed the Deregulation Act 2015.
However, Lettings Agents and Landlords only have until the close of business on 23rd June 2015 to take advantage of one of the Act’s most important changes.
Where deposits have been taken before 6th April 2007 and the tenancy became periodic after that date, Lettings Agents and Landlords must protect the deposit and serve the prescribed information on the Tenant by 23rd June 2015 – at which point the deposit will be protected properly and treated as always having been.
Moreover, if you don’t protect them by 23rd June, you will be in breach of the deposit rules!”
“The Deregulation Act has also set out that, first, deposits taken after 6 April 2007 that were protected with prescribed information served at some stage during the initial tenancy will be treated as having had the prescribed information served on every renewal or on becoming statutory periodic tenancies, and secondly, deposits taken before 6 April 2007 which became periodic before that date must be protected or returned before a section 21 notice can be served with no penalty.” Liam concluded.
Liam O’Shea of Astle Paterson specialises in the law of Landlord & Tenant and carries out work on behalf of Landlords throughout Burton upon Trent and the surrounding areas – please contact him on 01283 531366 or by email at loshea@astlepaterson.co.uk.
