Superstrike Ltd vs Rodrigues Tenancy Deposit Protection Court of Appeal

@Mark - Yes, a friend of mine is a Letting Agent and we both noticed the difference between the Landlord & Letting Agent protection criteria... Letting Agents using the TDS had been told NOT to re-register deposits when they go into periodic tenancies!

@Eleanor White - I believe the Landlords Guild are wrong in their interpretation. I would, of course, like them to be right. I will take a look at their forum.

@markA I have emailed my PI insurers to make sure that we cannot be accused of not bringing a potential claim to their attention in good time. Having said all that, we only have a handful of periodic agreements....... we take the view that one month's notice is not sufficient to ensure void free lettings (even in Oxford) and so less than 5% of our managed ASTs are statutory periodic. I have always felt periodic agreements are sloppy practice; and none of this changes my mind!

@Mark Crampton Smith - as your business model is based primarily of the Oxford student market I do understand your perspective and that your model does make sense for your market and your xclients.

I also think many letting agents abuse renewals as an opportunity for profiteering though. As I can let my properties at pretty much any time of the year I consider renewals to be unnecessary. Further, I believe that renewals actually expose me to greater risk as it extends the period for which I am unable to serve a section 21 notice if necessary.

Horses for courses I suppose.

Nonetheless, we are both equally in the dodo today!

As they are recognised as two separate agreements, this could also mean that any Landlord who has completely failed to protect a deposit during a fixed term tenancy, which then runs into a periodic tenancy, could ultimately be liable for a penalty of up to 6x deposit + return of the deposit!?

So what do us little landlords do now? Do I give a new tenancy agreement to my tenants and re-register their deposits? The periodic ones I have are all over 30 days old now.

@June - and all.

Best practice at this stage is not to serve a section 21 notice unless you have first returned the tenants deposit in full or got them to agree in writing to any deductions.

Sadly, if tenants have caused damage or are in arrears the above still stands.

As for liability for fines, well I'm afraid we are all at the mercy of the Courts if we failed to issue a new deposit protection certificate and prescribed information within 30 days of a fixed term tenancy expiring and becoming a NEW statutory periodic tenancy.

I believe this to be scaremongering (sorry Mark). As if we don't have enough to deal with in this awful business.

Here's segment of an Email received from rla's DepositGuard scheme on 26th March 2013 :

"3. Renewing protection at the end of the fixed term - When the fixed term expires we will now assume it is continuing on a same terms statutory periodic basis. Protection will be continued automatically and you do not have to do so manually. N.B If the tenancy is continuing but not on the same terms you still must protect the deposit again. Failure to do so remains a breach of our rules."

Another email received on 16th May 2013 :

"Improvements to website
Following feedback from members, we have recently made several improvements to the TDS website making it easier and faster to use.
"As well as renewing fixed term tenancies automatically to become statutory periodic tenancies, you can also now end a tenancy by clicking on the 'End Tenancy' link on the member page. then you just need to click whether or not the tenancy ended in dispute then we will archive the record.
Also keep an eye out this summer for a new evidence portal where you will be able to upload dispute evidence in real time - more information to come, so watch this space!"

So clearly they are Renewing Automatically, and do not require further payment. So assuming renewal is in fact valid withour further payment, then surely there's no issue here ? I speak as a private landlord who deals direct with tenants, and does not use letting agents. I think this also illustrates that taking deposits is more trouble than its worth, and we'd be best to consider not using them any more. My only problem is that I've insured multi '£000s of deposits, and cannot afford to return them all as tenants rotate, without taking deposits from new tenants....

Beats me why anyone ever bothered with deposits. I don't. It has always been a good shout and looking increasingly more so every minute now 🙂

@Neil - I can assure you this is not scaremongering. I suggest the emails you are referring to are, however, very solid evidence to demonstrate the widespread lack of clarity relating to this law. If a deposit protection provider interprets the law differently to three Court of Appeal Judges what is the hope for landlords and letting agents?