Superstrike Ltd vs Rodrigues Tenancy Deposit Protection Court of Appeal

Doh! It's getting late and I've obviously been at this too long. I thought LJ Lloyd was referring to another case LOL

Hi All
Sorry to ask a basic question but as a total newbie who is just about to take on their first tenant most of this is going above my knowledge level at the moment, but will this apply in Scotland? Thanks

The judge in the Superstrike case stated that any failure to serve Prescribed Information can be rectified to allow the subsequent service of a Section 21.

This does not apply to any failure to register the deposit.

So if you have registered a deposit, and you're worried that a periodic tenancy is a new tenancy requiring new prescribed information, you can serve it late.

Panic over.

Paragraph 42 is the key part of the judgment on this point, repeated here;

Under the original version of section 215, as construed in Vision Enterprises v Tiensia, it was open to the landlord to comply with the requirement to have the deposit held in accordance with an authorised scheme, even though this was not done within the 14 days then stipulated.

That seems not to be the case now, given the amendment to section 215(1)(b) made in 2012.

I note that, as regards failure to provide the necessary information, under section 213(6), the sanction preventing service of a section 21 notice applies until the information is given, even if that is done late: see section 215(2) and its words: "until such time as section 213(6)(a) is complied with". The time stipulation is in section 213(6)(b), so in that case the distinction is clearly deliberate: the landlord can retrieve the position, as regards that failure to comply, by complying late.

Mark -I have now read this case.

There's no problem for most of us, in my view.

I believe its " panic over". The law is still straightforward, even though time limit compliance is required.

Case only is relevant to pre 2008 assured shortholds which continue after new deposit rules came in (either as assured shorthold ,or a statutory tenancy which arises automatically when shorthold finishes). There can't be many of them left can there? And you've got to have omitted to comply with stat rules about deposit.

If you've got one of these assured shortholds/ holding over, then check whether you've put the money held as deposit within a statutory scheme. Then you can panic.

Unless anyone can shoot down what I say by quoting from the case, I'll tell my MP we (thankfully) have got a false alarm

I suggest the case does not say or even imply that there has to be a repayment of deposit to the Tenant when an assured shorthold expires. The case was exceptional, as even the recital of facts at the beginning makes clear.

Unless anyone can shoot down what I say by quoting from the case, I'll have to tell my MP we (thankfully) have got a false alarm

As a matter of practice, I have actual deposits and I put them on the statutory deposit scheme. That means (according to the scheme) that the deposit remains with them and is protected until the end of the statutory tenancy, if the tenant remains beyond the end of the fixed assured shorthold.

Although some correspondents say thats a pain, I know and the Tenant knows exactly where we are :-protected.

HOWEVER, I came across a situation where the cover under another scheme was limited as to how long the insurance lasted. So when it expired the Landlord was in breach of the deposit rules.

Further to my previous post. Just to quote from para 20 of the Judgment:

"But the legal position after 8 January 2008 must have been that the deposit was

held by the landlord as security for the performance of the tenant's obligations,

or for the discharge of any liability of his, arising under or in connection with the

new statutory periodic tenancy, not (or not only) in respect of such obligations or

liabilities arising under the original fixed term tenancy. How had that come

about? It must have been on the basis that the tenant's right to be credited with

the deposit at the end of the fixed period tenancy, as well as his obligation to pay,

and the landlord's right to receive, an equivalent deposit under the new statutory

periodic tenancy, were treated as satisfied by the landlord continuing to hold the

same sum of money as before on the same basis as before but by reference to

the new tenancy."

I would say this does not suggest in any way shape or form that the deposit has to be repaid to the tenant and taken again. Quite the reverse. It can simply be carried over.

The only question , I suggest, is this: does the the money have to be taken off deposit and redeposited.

Answer I suggest: No

Why? Because the deposit was protected before and it still is protected. Which is the object of the legislation, however badly worded.

If however the terms are changed, then it is a new contract (as opposed to statutory tenancy extending the shorthold on the same terms) and the deposit will have to be repaid to T and taken back (I think T simply agreeing to it being moved to a new deposit would be effective PROVIDED the statutory notices were served on T)

Sorry... I assumed that the Court of Appeal case had been accessed by those who had ben commenting on the judgment. The case is available free on the following link

http://www.bailii.org/ew/cases/EWCA/Civ/

@Lulu McCue - this particular thread relates to deposit protection in England and Wales. We do run news and other articles for landlords in Scotland though so please stick around, you're in the right place. As for advice on matters affecting Scotland I recommend you become a member of the Scottish Association of Landlords. The following is a link to their Member Profile here >>> http://www.property118.com/member/?id=290

@Simon - I also thought most people who have commented on this thread would have read the link to the case which I posted in the body text of my main article. Obviously I have read the case many time. Your link is fine but you will find this one takes you directly to the case >>> http://www.bailii.org/ew/cases/EWCA/Civ/2013/669.html

Well I've had a very unsatisfactory reply from my deposits basically saying they are looking into it and I need to get my own legal advise on the matter! They also suggested that if I have any tenancies due to go onto stp shortly then I should re secure the deposit! I have responded asking what do I do with the tenancies that are already on stp and have been for quite some time where I have not re secured the deposit all I've done is tick the box on my account to confirm they are on stp,This was done in accordance with the advise given by my deposits?

I suspect my deposits are being very carefull what they say at the moment as to not admit any blame for any of this! I will post there reply,if I get one!

To pick from the two postings after 20:00 last night.

"The judge in the Superstrike case stated that any failure to serve Prescribed Information can be rectified to allow the subsequent service of a Section 21. So if you have registered a deposit, and you’re worried that a periodic tenancy is a new tenancy requiring new prescribed information, you can serve it late."

Why on earth anyone would register a deposit but not deal with serving the paperwork on time after Ayannuga v Swindells is beyond me, but no doubt it will happen. I think Glenn has recognised the deposit cannot be safely registered late, but then got diverted onto the issue of the prescribed information?

________________________

"I suggest the case does not say or even imply that there has to be a repayment of deposit to the Tenant when an assured shorthold expires."

Precisely. The case says there is a deemed repayment to the tenant and return to the landlord with no actual transaction (see paragraph 38). This deemed payment is sufficient to trigger the need to protect the deposit, where no such need existed before.

________________________

"The case was exceptional, as even the recital of facts at the beginning makes clear."

In as much as the original tenancy in the actual case was dated before April 2007 I agree. However, I suspect there are thousands of fixed term tenancies that started after April 2007 and have since turned periodic so the possible knock on effect on these tenancies can hardly be dismissed so lightly.

________________________

"Unless anyone can shoot down what I say by quoting from the case, I’ll have to tell my MP we (thankfully) have got a false alarm."

The fact that the deposit administration companies have all developed a case of loose bowels would seem significant.

________________________

"As a matter of practice, I have actual deposits and I put them on the statutory deposit scheme. That means (according to the scheme) that the deposit remains with them and is protected until the end of the statutory tenancy, if the tenant remains beyond the end of the fixed assured shorthold."

No doubt you serve the papers on the tenant at the start. However, the point is that a Court of Appeal judge has suggested you may need to re-register the deposit when the tenancy turns periodic. Do you do this? Now do you see the doubt?

________________________

"However, I came across a situation where the cover under another scheme was limited as to how long the insurance lasted. So when it expired the Landlord was in breach of the deposit rules."

Most insurance cover is limited to a period. I think you may have misunderstood the way that scheme worked.

________________________

"I would say this does not suggest in any way shape or form that the deposit has to be repaid to the tenant and taken again. Quite the reverse. It can simply be carried over."

Agreed.

"The only question, I suggest, is this: does the money have to be taken off deposit and re-deposited."

Let's reword that: The only question, I suggest, is this: does the deposit have to be taken off protection and re-protected.

"Answer I suggest: No
Why? Because the deposit was protected before and it still is protected. Which is the object of the legislation, however badly worded."

I support the logic your position and join in the hope you are correct. However, unless you have indemnity cover and are willing to put this down in writing so we can all rely on it, or you wear a wig to work in the Supreme Court, it remains what we thought was the position and is now in doubt.

@Glenn Ackroyd – we have been following this thread with interest and your post certainly appears to offer a glimmer of hope and an insight into best practice moving forwards. I am wondering what, if anything, EweMove will be doing differently?

I read your comment with interest as I had come to a similar conclusion and I just wanted to clarify the process which I believe you have suggested. Presumably you will be writing to each tenant who is in a statutory periodic tenancy saying something along the lines of …..

“further to the Court of Appeal ruling in the Superstrike vs Rodrigues case, the law regarding tenancy deposit protection has changed. Now, once a tenancy finishes its fixed term and becomes a periodic tenancy it is considered by law to be a new tenancy. Therefore, I now serve you with the relevant prescribed information relating to your new tenancy, please could you sign and return this as soon as possible”

I believe we are all coming to a similar conclusion which is that we will not have to go through the process, particularly if deposits are held in a custodial scheme, of returning the deposit to the tenant only to then receive it and re-register it and then serve new prescribed information with it. Is that your conclusion too?

One thing this has brought to light is that we have had several landlords contact us this morning enquiring about Zero Deposit options.