The Deregulation Act 2015, which received Royal Assent on 26th March 2015, contains important changes to TDP legislation that attempts to clarify the issues created by the court cases of Superstrike vs Rodrigues and Charalambous vs Ng.
A reminder of the cases
The Superstrike vs Rodrigues judgement stated that a statutory period tenancy (STP) should be deemed a ‘new’ tenancy and found that deposits taken on tenancies before the TDP law was in place (6 April 2007) and which then either renewed or continued as a STP should have been protected (or re-protected) with the up to date prescribed information (PI) served on the tenant.
The Charolambous vs Ng judgement ruled that even though a deposit was taken before 6th April 2007, because it had not been protected and PI served, a Section 21 notice served on the tenant was invalid.
What the Deregulation Act 2015 changes mean?
If either of these scenarios affect you then the below changes are important to understand:
- If you took a deposit on any Assured Shorthold Tenancy before April 2007 and have not protected it then the deposit must be protected and PI served, otherwise you will not be able to issue a Section 21 notice at any point in the future. However, it’s important to note that there are no penalties for any landlords who don’t protect deposits with a landlord deposit scheme in these circumstances. This effectively confirms the decision in Charalambous vs Ng.
- If you took a deposit on a tenancy since 6 April 2007 and protected and served the PI, and the tenancy has since either rolled into a SPT or been renewed, then as long as the deposit is still protected in the same scheme and the tenancy details have not changed you will be deemed to have complied. In other words, this specific change overturns Superstrike vs Rodrigues judgement.
- If you took a deposit on an AST before April 2007 and the AST subsequently rolled into a SPT or was renewed after April 2007, then the deposit must be protected and PI served by 23rd June 2015. You will not be able to serve a Section 21 notice and WILL be liable for penalties for non-compliance until you’ve protected the deposit.
- The final change (which isn’t in relation to Superstirke or Charalambous) allows the agent’s details to be used on the PI where they have taken and protected the deposit on the landlord’s behalf. Previously there was doubt as to whether the agent’s details could be provided instead of the landlord’s when the agent took the deposit and protected it on the landlord’s behalf.
What to do now?
There will no doubt be a large number of deposits that now require protecting and landlords/agents have been given three months to do so in order to avoid any risk. Remember, if you have deposits that now need protecting you have until 23rd June 2015 to do so.
All my|deposits members should check all of their tenancies to see when they’ve taken and protected deposits, including serving the PI. This is a window of opportunity to get everything in order and prevent any issues with the protecting of deposits, serving the PI, serving Section 21 notices and avoiding any potential penalties.
If you need to protect a deposit taken before April 2007 call us on 0333 321 9401 or visit www.mydeposits.co.uk