Tenancy deposit advice for residential landlords
Since the introduction of tenancy deposit protection by the Housing Act on 6 April 2007, landlords should be aware that when a deposit is received from a tenant at the start of any new assured shorthold tenancy it must be lodged with an accredited tenancy deposit scheme and certain prescribed information must be served on the tenant.
A breach of the Act may invalidate a section 21 notice and prevent a landlord from being able to recover possession. The court may also order them to return the deposit and pay damages equal to between one and three times the amount of the deposit.
In the recent case of Superstrike v Rodrigues the Court of Appeal ruled that a statutory periodic tenancy constitutes a new tenancy and is not considered to be a simple continuation of the tenant’s previous status. The decision in this case may be appealed and interested organisations are lobbying the government to legislate to prevent confusion and damage.
In the meantime there is speculation as to the impact this decision will have where the tenancy is protected and has been renewed, whether by a new fixed term or a statutory periodic tenancy. There is a risk that a landlord who has either not protected the deposit (relating to a pre-April 2007 tenancy) or, has a protected deposit but has not served the prescribed information on the renewal of the tenancy or the creation of a statutory periodic tenancy, could be in breach of the Act.
Where the deposit is currently protected and a new fixed term is granted or a statutory periodic tenancy arises, we recommend that in order to ensure full compliance with the implications of the Superstrike decision, you should re-serve the prescribed information within 30 days of each renewal or the creation of a statutory periodic tenancy.
There are potential implications and risks which we would be happy to discuss with you to help you decide which route to follow.