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Residential Tenancies: Further Guidance on Deposits

Liam O’Shea, Director and Solicitor in Astle Paterson’s Dispute Resolution department comments on the recent case of Gardner v McCusker which sets out the need for landlords and letting agents to re-serve prescribed information relating to deposits on tenants when the fixed term of a tenancy comes to an end.

In June 2013 the Court of Appeal decided 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.)

The appeal Court set out that where a tenancy is 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 is 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.

However, the Court’s Judgment did not set out whether landlords who have entered into tenancies with their tenants on or after 6thApril 2007 have to comply with the deposit regulations within 30 days after the end of the fixed term of such an Assured Shorthold Tenancy.

Birmingham County Court has recently heard the case of Gardner v McCusker within which the Judge decided that :-

  • in the circumstances where:-
    • the tenancy was signed after 6th April 2007
    • the landlord had originally complied with the deposit provisions by protecting the deposit and providing to the tenant the prescribed information, and
    • the landlord failed to provide a further copy of the necessary prescribed information about the deposit to the tenant within 30 days of the initial fixed term tenancy coming to an end,
  • the Court held the landlord was in breach of the deposit rules and therefore:-
    • the landlord was not able to serve a valid notice requiring possession of the property, (pursuant to section 21 of the Housing Act 1988); and
    • the landlord was ordered to pay to the tenant:-
      • the deposit;
      • 2 times the value of the deposit; together with
      • the legal costs of the tenant.

At Astle Paterson we have advocated to our clients for some time the need to re-serve the prescribed information on a tenant within 30 days of a fixed term tenancy coming to an end (and the coming into being of a statutory periodic tenancy.)

Whilst the decision has been made in the County Court (and is not binding on other County Courts or appeal Courts) it would appear prudent for landlords and letting agents alike to, as a matter of course, re-serve the prescribed information immediately on their tenants on the coming to the end of the fixed term of a tenancy.

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.

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