Superstrike Ltd vs Rodrigues Tenancy Deposit Protection Court of Appeal

by Mark Alexander

20:45 PM, 16th June 2013
About 7 years ago

Superstrike Ltd vs Rodrigues Tenancy Deposit Protection Court of Appeal

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Superstrike Ltd vs Rodrigues Tenancy Deposit Protection Court of Appeal

Superstike vs Rodrigues Tenancy Deposit Protection Court of AppealMy reading of a recent Court of Appeal ruling (Superstrike Ltd vs Rodrigues) is that thousands of possession orders may have been granted in error due to lack of clarity in Tenancy Deposit Protection legislation.

What’s worse is that the vast majority of landlords may have inadvertently broken the law and face bankruptcy!

Scary stuff hey?!

So what is it all about?

Well, in the case of Superstrike Ltd vs Rodrigues, a legal argument affecting Tenancy Deposit Protection, the Court of Appeal has held that a Statutory Periodic Tenancy is not in fact a continuation of a fixed term tenancy and is in fact a brand new tenancy. The legal implications are that deposits paid by tenants needed to be re-protected within 30 days of the new statutory periodic tenancy being created.

How many landlords re-protect tenants deposits and re-issue a new tenancy deposit protection certificate and prescribed information within 30 days each time a fixed term AST ends and a Statutory Periodic Tenancy begins?

Very few I suspect.

The ramifications of this ruling are that landlords might be liable to be fined 3X the deposit plus the deposit and be prevented from enforcing a section 21 notice if a deposit was not returned to the tenant before the notice was served.

Getting worried?

You and me both!!!

It is too late to do anything for every tenancy that became statutory periodic more than 30 days ago.

This was not what I wanted to hear so I read the full details of the judgement

PLEASE, don’t shoot the messenger!!!

Hopefully, the legal eagles reading this will be able to pick holes in the legal argument. I’m also hoping a Supreme Court will eventually add the further clarity now required to the Court of Appeal decision or that new emergency legislation will be introduced to prevent the possible collapse of the Private Rented Sector as we know it.

Yes people, it’s that serious!

Can you afford to pay fines of up to four times the value of every deposit you or your letting agent has collected from tenants in the last six years in respect of fixed term tenancies which have become statutory periodic tenancies?

OK, so having now scared the pants off most of the people who read this, let me pose a few questions to the legal eagles and the politicians who are responsible for this mess. We must not forget that all of this has come about as a result of badly drafted legislation which was passed by politicians. Furthermore, it appears that judges may have been making bad decisions on possession cases due to incorrect interpretation for years. If politicians, judges, solicitors and deposit protection schemes have not been able to get clarity on what the law was meant to be then what hope for landlords and letting agents?

If the latest ruling is legally correct, how many possession orders have been granted which should not have been granted? Who is liable for these cock-ups? I suspect many of the people who have lost their homes will want compensation but who will they get it from?

Next question.

Might it be arguable that our tenants did not apply for a refund of their deposit at the end of their tenancy and that no deposit was in fact necessary for the new statutory periodic tenancy? Might this be a viable argument in that it was never written anywhere? If so I can’t see how landlords can be fined on that basis. That doesn’t help the possession argument but it might avoid mass bankruptcies amongst landlords.

Do landlords have any recourse to tenancy deposit protection providers where they have issued advice on forums like this one? The reason I ask this is that I can easily produce evidence to prove that all deposit protection providers interpretations of the law and their advice relating to this issue have clashed with the ruling in this Court of Appeal case.

Perhaps the most worrying aspect of all of this is that one ambulance chasing law firm have already set in place a “no win no fee” opportunity for tenants to begin making claims against their landlords.

Now, given that it will be in ALL landlords interest to unite at this point, please may I remind you of The GOOD Landlords Campaign and your ability to contribute to the work we do here when you become a member of Property118

Please post comments below. Comments from members are easily identifiable.

 



Comments

10:57 AM, 17th June 2013
About 7 years ago

This is direct from DPs website FAQ's

"What do I need to do if a tenant extends their tenancy agreement?

If the tenant extends their agreement the deposit will continue to be protected until the Joint Deposit repayment process is completed at the end of the tenancy.

In view of the above, you will not need to inform us of any extensions, as the deposit will remain protected. If, however, you do wish to update the deposit details to show the new tenancy duration, please contact us using the Online Form."

11:12 AM, 17th June 2013
About 7 years ago

However this is from My Deposit relating to non custodial insurance backed deposit protection

"Protection fees relate to the length of the fixed tenancy agreement. Therefore a protection fee is required each time the tenancy agreement is renewed or extended. The only exception to this is where the agreement converts to a statutory periodic tenancy where a new protection fee is not required."

So take advice on these schemes.

Jan Martin

11:14 AM, 17th June 2013
About 7 years ago

MY DEPOSITS STATE . "New protection is not required if the original contractual term ast continues as a statutory periodic tenancy."
Surely thats enough isnt it.?

Paul Linstead

11:34 AM, 17th June 2013
About 7 years ago

hi i am new to all of this i have always given a AST and new cert for the deposit whats the diffence between a staatory periodic and a AST MANY THANKS

Mark Crampton Smith

11:50 AM, 17th June 2013
About 7 years ago

@all.... The TDS sent round a missive in November of last year, advising us all to re-register deposits and send out prescribed information within 30 days of an AST going statutory periodic. There is a button on the website to do this, and it shows the date that the certificate is amended. As there is neither material change to the deposit held nor the prescribed information, the TDS do not advise us to send out new certificates or prescribed information........ This morning, however, they have told us that they are taking legal advice and should there be revised advice for members they will let us know.
This sort of thing only serves to underline the principle driver for landlords using a letting agency "COMPLIANCE" If the 5h*t were to hit the fan on this one....... all our clients would be protected as they could reasonably claim against us for any loss.

11:57 AM, 17th June 2013
About 7 years ago

Interestingly, the RLA's 'DepositGuard' TDS Scheme requires the Landlord to re-register the deposit at the end of the Fixed Term, if it continues onto a Periodic Tenancy; at which point, a NEW Deposit Certificate is produced. Landlords must then give a copy to the tenants (and as good practice, we get them to sign a copy)... Did the RLA know something that others didn't?

Mark Alexander

11:57 AM, 17th June 2013
About 7 years ago

I have just spoken to a leading landlord and tenant lawyer. It's even worse than I first thought. If a judge has granted possession where an SPT was not protected the law says the right to apply for possession was the error of the landlord and it is the landlord who is responsible for any awards for damages and consequential losses which a judge may award to the tenant, e.g. daughter had to move schools and failed exams, cat ran away, tenant lost job, broken marriage etc.

Eleanor White

12:02 PM, 17th June 2013
About 7 years ago

The Landlords guild seem to interpret the case that it is only of concern to landlords with tenants who moved in prior to 6 April 2007 and with tenancies that have gone statutory periodic after 6 April 2007. If that is the case then there will be far fewer effected.

https://www.landlordsguild.com/deposit-protection-for-statutory-periodic-tenancies-and-renewals-superstrike-ltd-v-rodrigues-2013/

Mark Alexander

12:03 PM, 17th June 2013
About 7 years ago

@Paul Linstead - this new ruling says that a Statutory periodic Tenancy is a new one and therefore, the deposit should be re-protected within 30 days.

@Mark Crampton-Smith - I bet PI insurers are getting worried, will they be ringing the Bell at Llloyds of London or is that only for when ships go down?

@Chris - is this still the case? I seem to recall TDS changing this within the last few months. TDS also have very different rules for Landlords than Letting Agents.

12:11 PM, 17th June 2013
About 7 years ago

Page 6 of the DepositGuard TDS Q&A's confirms that the deposit will NOT be protected if "you do not take action to protect your deposit again ... [if] the tenancy agreement is continuing on a same terms statutory periodic tenancy"! https://www.tds.gb.com/independent_landlords/resources/files/The-Tenancy-Deposit-Scheme-for-Landlords.pdf

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