Though tenancy deposit protection requirements have been in place now for more than 6 years, there has been uncertainty about whether these applied in respect of assured shorthold tenancies which began before 6 April 2007, but continued on after the contractual term expired some time after that date.
Before 6 April 2007, there was no requirement for landlords to comply with any tenancy deposit protection requirements and so the deposit would not have been protected by the landlord. Should the contractual term of such an AST expire and the tenant remain in occupation paying rent, a statutory tenancy (under section 5 of the Housing Act 1988) would then come into existence based on the terms of the AST. The previously unanswered legal question was whether or not, if this new statutory tenancy came into existence after 6 April 2007, it would trigger an immediate obligation to comply with the new tenancy deposit legislation.
The Court of Appeal has now handed down a judgment in the case of
Superstrike Limited v Rodrigues that
makes it clear that a landlord does have to comply with the tenancy
deposit legislation once such a statutory tenancy has come into
existence.
An amendment introduced by the Localism Act 2011 also prevents a landlord from serving a section 21 notice (a necessary step in getting back possession from a tenant purely on the basis that the AST has ended) if the tenancy deposit monies have not been protected within a short period of time after being received unless certain exceptions apply.
This, therefore, means that any landlord in the same situation as the landlord in the Superstrike case will only be able to claim back possession of premises if, before a section 21 notice has been served, he repays the deposit to the tenant or pays back to the tenant such part of the deposit monies that has been agreed by the tenant or determined by the court.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
