A new Court of Appeal decision on Tenancy Deposits
Tessa Shepperson of Landlordlaw.co.uk reports:
If you are a landlord of a property where you took the deposit AND the tenancy went periodic before the tenancy deposit regulations came into force in April 2007 you may think you are safe from the regulations. We all did.
However the Court of Appeal decision in the case of Charalambous v. Ng has ended that. In this case the deposit was taken in 2002 and the tenancy went periodic in 2005.
The Court of Appeal however have held (in a possession claim based on a section 21 notice served in 2012) that although the landlord was not in breach of the regulations, and could not therefore be sued for the penalty – the section 21 notice was still invalid.
This is becuase of the wording of s215(1)(a) of the Housing Act 2004 which says:
(1) … if a tenancy deposit has been paid in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy at a time when—
(a) the deposit is not being held in accordance with an authorised scheme, …
So if you are a landlord of a property affected by this, you need to either protect the deposit or return it to the tenant before issuing your section 21 notice.
The government are in the process of amending the deposit regulations (again) so watch this space.
Landlord Law members will find a brief report of the case and links to all the relevant articles and reports here.
Hopefully this news will not spoil your Christmas!