How to help bring about changes to legislation post “Superstrike”

by Mary Latham

16:48 PM, 6th August 2013
About 5 years ago

How to help bring about changes to legislation post “Superstrike”

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How to help bring about changes to legislation post “Superstrike”

One of the things that are uppermost in landlords’ minds at the moment is the concern that we are vulnerable to possible litigation following the “Superstrike” case. The degree of that vulnerability varies from landlord to landlord and of course some landlords are not at all clear where they stand.Mary Latham

All of the deposit protection schemes and large landlords associations are working behind the scenes to persuade DCLG to tweak legislation to prevent courts being overrun with cases from tenants who have not actually been deprived of their legal rights but have become aware of the loophole that Superstrike highlighted.  In other words they are not asking for a change in the law which would enable those landlords who do not/did not protect their tenants deposits (HA 2004 & Localism Act 2012) to get away with it.  What they are asking for is a change which prevents those landlords who believed that they were acting within the law from facing litigation from their past and present tenants. These are the landlords who do/did protect their tenants deposits and provided the tenant with the Deposit Protection Certificate and Prescribed Information for Tenants within 30 days of having received the deposit but who were unaware that they needed to provide the documents again, despite the deposit protection continuing and no new paperwork being issued, at the point at which the fixed term of the tenancy ended and a Statutory Periodic Tenancy began (HA 1988). There are also those landlords who have tenancies that began before the Deposit Protection legislation came into affect (HA 2004) and therefore did not protect their tenants deposits. These landlords were also unaware that if the tenancy became a Statutory Periodic Tenancy at the end of the fixed term after the law changed that they should have protected the deposit and served the documents on their tenants. This last point was the crux of the Superstrike case.

In addition to the concerns many of us have about the potential litigation (it has not yet been established that there is actually a threat beyond the circumstances of Superstrike) is the issue of not being able to regain Possession of properties using Section 21 (HA 1988)

In order to convince Government that this is a major problem in the PRS they need to be shown actual evidence and the only people who can give them that evidence is us (landlords and letting agents).  All of the organisations involved in the discussions have produced a short survey to gather the facts.

The combined results will be present to DCLG.

The survey will take just a few minutes of your time and will not ask you to identify yourself.

If you do not take the time and trouble to complete the survey we may lose the argument and fail to get the legislative changes that we all need. 

Please follow the link  below and do your part to bring about a solution for us all before the Courts are filled with cases brought by the “No Win No Fee” people that have sprung up to make easy money from landlords who have simply made a mistake and have not in any way deprived our tenants of their legal rights.

Please also send a link to this article to every landlord you know to make certain they aware of this very important survey.

Click this link >>> https://www.surveymonkey.com/s/NLASS

When I completed the survey I found that I needed to read it first then work out which category my deposits fell into before going back and completing it – which took less than 2 minutes. By doing the calculations for this survey I am now clear of where I stand with each of my tenancies.

This was a useful exercise and may help me going forward when the inevitable happens and a landlord is sued by a tenant for one of the possible scenario.

I think that you may find this helpful too.



Comments

Mark Alexander

19:07 PM, 6th August 2013
About 5 years ago

Done 🙁

I had already worked out these figures by June 12th, the day after the Superstrike Court of appeal decision was first made public. Needless to say, I've not been sleeping too well ever since!
.

Industry Observer

16:02 PM, 7th August 2013
About 5 years ago

Mary

The threat beyond Superstrike is obvious and immense. The CoA had determined, quite correctly, that a SPT is a new tenancy.

They have also referred to the deposit on that new tenancy being a new deposit - even if the same money.

I'd have thought the threat obvious, but here is my opinion bearing in mind I was one of the (very) few to consistently say a periodic is a new tenancy, and that you need to re-protect (whatever that involves) and re-serve PI:-

There is a huge amount of info now coming out and complex tables. In simple terms:-

Every time you do a re-let to new tenants protect and serve PI

Every time those tenants renew do the same

If those tenants go periodic, do the same

On existing tenancies

If they renew, do as above

If they go periodic, do as above

On all existing tenancies where they are still fixed term or periodic - review your paperwork and if not 100% correct i.e. if you have not both protected and served 100% correct PI, decide what to do between :-

1. Doing nothing

2. Satisfying TDP now on the existing tenancy fixed term or periodic, or

3. Doing a renewal and satisfying TDP

All other comment is just additional words - do as above and be 100% safe.

Or don't and risk it

Mark Alexander

16:37 PM, 7th August 2013
About 5 years ago

Reply to the comment left by "Industry Observer " at "07/08/2013 - 16:02":

Just suppose you were advising a landlord who held, say £26,000 of tenants deposits, all of which had been protected correctly at the commencement of the AST with DPC and PI correctly completed and served. Humour me on that one, I know you think that's unlikely but I don't want us to go off at a tangent please.

Now, let's assume that all of those tenancies reverted to SPT's more than 30 days ago without prescribed information being re-served.

What, if any, solution do you think exists for a landlord to protect himself against claims of between 1 and 3 times the value of the deposit, i.e . between £26,000 to £78,000 in the example above, plus of course the £26,000 of deposits and thus a total potential exposure of £104,000?

I'm particularly interested in discussing ways to negate the risk of financial claims only. I appreciate that other considerations such as ability to gain possession under s.21 are also important but I would like to focus in purely on exposure to potential claims and ways to mitigate that risk please.
.

Mary Latham

18:44 PM, 7th August 2013
About 5 years ago

Reply to the comment left by "Industry Observer " at "07/08/2013 - 16:02":

Nr nr, nr nr What took you so long? I don't look so good with a stumpy little nose hahahahahaha

Follow me on Twitter@landlordtweets

My book, where I warn about the storm clouds that are gathering for landlords is here >>> http://www.amazon.co.uk/dp/1484855337

Mark Alexander

22:34 PM, 7th August 2013
About 5 years ago

@Industry Observer - any ideas yet? This is your opportunity to show that you are equally smart at solving problems as you are at spotting them. You've been talking about this problem for years, you were right, we were wrong, well done. Surely you have given some thought to the solution to the ptoblems created by everybody else's ignorance haven't you?
.

Anon 44

12:34 PM, 8th August 2013
About 5 years ago

Reply to the comment left by "Industry Observer " at "07/08/2013 - 16:02":

Please can I have your thoughts on whether an agreed rent increase on a periodic tenancy also needs the deposit to be re-protected and new PI issued?

Then we would be:
Issuing PI at the start of the Fixed Term and placing deposit in the DPS
Re-issuing PI at SPT, deposit remains protected in the DPS
Re-issuing PI on agreed rent increase during SPT, deposit remains protected in the DPS

Any thoughts please?

Anon 44

12:35 PM, 8th August 2013
About 5 years ago

Reply to the comment left by "Anon 44 " at "08/08/2013 - 12:34":

PS I have completed the survey in Mary's post

Robert M

17:47 PM, 8th August 2013
About 5 years ago

It's not often that Industry Observer is so quiet, but I can tell you one good reason why this might be so.

There are two problems that Mary has not mentioned.

First of all, SPTs end with each period, ie (usually) each month. Therefore, the logical conclusion of Superstrike is the delightful prospect of serving deposit papers every month.

Secondly, in order to comply with the legislation for tenancy deposits you have to comply with the rules of your scheme. Ayannuga v Swindells taught us that. If your scheme tells you that you do not need to re-register the deposit when a tenancy reverts to a SPT, then if you ignore this, you are not complying with the scheme rules. However, the Court of Appeal tells us you must re-register. This creates a vicious circle.

The only solution if for some landlords with an understanding of how deposits actually work to sit down with representatives of DCLG (or whatever acronym now applies) and demand the whole mess is sorted out with new legislation.

Mark Alexander

17:55 PM, 8th August 2013
About 5 years ago

Reply to the comment left by "Robert M " at "08/08/2013 - 17:47":

The reasons why the PI does not need to be re-served monthly on an SPT was explained to me and the legislation was also provided, I will try to dig it out for you but IO may well beat me to it.

The Deposit Protection Schemes have all sat down with the DCLG and many of them are very experienced landlords. The guidance came out as it did as there was no other choice, only legislation or a Supreme Court ruling/guidance can change where we are now, unless of course IO or some other very clever people can come up with the solution to the question which I raised in my post of 14:37 yesterday afternoon.
.

Robert M

19:00 PM, 8th August 2013
About 5 years ago

Just glad I have no SPTs

"No other choice, only legislation .... can change where we are now"

Agreed

I have no faith that the Supreme Court can help much. They do not have a record for creating silk purses.

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