David Carter of the Sheriff’s Office writing in his regular e-newsletter about the Tenancy Deposit Protection regulations, warns of problems to come.
Since April 2007, all residential landlords letting assured shorthold tenancies have had to protect any deposit paid. But the Court of Appeal in Superstrike Ltd vs Rodrigues ruled that this could also apply to tenancies that ended before the scheme even started, and the Court of Appeal’s decision in Charalambous vs Ng confirms this.
Under the amended rules of the scheme, within 30 days of taking it, a deposit must be registered in an authorised scheme and the landlord must give the tenant (or the person lodging the deposit) the prescribed information about how it is held. If this is not done, the landlord cannot serve a valid
Section 21 notice to re-gain possession when the tenancy expires.
If the tenancy is renewed (and this includes when the tenancy automatically becomes a statutory periodic one, where the tenancy is not renewed for a further fixed term), the landlord has to make sure the deposit stays protected (virtual renewal) and give the tenant the prescribed information again, within 30 days of the new tenancy.
It’s very important for landlords and their agents to get proof of service when the prescribed information is served; otherwise if the tenant denies ever having received it, any notices served will be deemed invalid by the courts even if the deposit was correctly protected.
It was assumed by many landlords and agents that tenancies before the scheme started and continued on a periodic basis were exempt. Not so.
The rulings mean that a deposit must still be protected or paid back to the tenant before a Section 21 notice can be served, even if the deposit did not need to be protected at the time it was given.
Review your deposits and take the appropriate action now.
— LandlordZONE (@LandlordZONE) January 22, 2015