Superstrike Ltd vs Rodrigues Tenancy Deposit Protection Court of Appeal

Superstrike Ltd vs Rodrigues Tenancy Deposit Protection Court of Appeal

20:45 PM, 16th June 2013, About 9 years ago

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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.



13:03 PM, 17th June 2013, About 9 years ago

Surely when a tenancy comes to an end, that is in this case the end of a fixed term tenancy, the deposit should be reclaimed by the tenant. If the tenant fails to reclaim the deposit then that is his problem. The landlord does not take and therefore has no need to protect a deposit for the new SP tenancy.

Is this a too simplistic view?

Mark Alexander - Founder of Property118 View Profile

13:14 PM, 17th June 2013, About 9 years ago

@David Price - as I said in my article, your suggestion would be the basis of at least one of my arguments if a tenant were to take me to court based on this ruling.

13:15 PM, 17th June 2013, About 9 years ago

The Court of Appeal dismissed the possession claim because the deposit had NOT been protected. A deposit was taken but not protected as deposit legislation was not in force at that time.

13:21 PM, 17th June 2013, About 9 years ago

Coincidently, we have just received an automated email reminder from the TDS confirming that one of our fixed term tenancies has just come to an end and that if the tenancy is continuing on the same terms, etc, "You can now download a revised certificate, which reflects that the tenancy protection is continuing on a periodic basis. You should forward this to your tenant(s)."

13:31 PM, 17th June 2013, About 9 years ago

I've just read the judgement. As an aside, the High Court cannot overrule the Court of Appeal - only the Supreme Court can.

I assume you got legal advice on the matter before writing the article? If you did, I'd get a second opinion. The case in question involves a tenancy whose deposit was never protected, rather than one that was being renewed. When it comes to applying a judgement on other cases this could be a crucial aspect in distinguishing. The law cannot work retrospectively, at least not without statutory intervention, so I would question whether or not this will suddenly unleash mayhem in the letting industry. Providing that deposits have been protected then landlords will have complied with s.213. The Court of Appeal seems to have ruled that you can 'receive' a deposit simply by circumstances changing i.e. the money doesn't have to change hands but if the circumstances do then, from a legal perspective, you have received the deposit and it must be protected. However, surely, by the same logic, s.213(3) would be complied with if the deposit is already protected. I am no longer a landlord, but when I was an found myself in a tenancy renewal situation a new thing from the TDS just arrived, presumably my agent had done something useful for a change, and that complied with the relevant statutory provisions. Similarly, when I was a tenant and renewed for a number of years I received a new TDS document. I can't see that this judgement really introduces anything radically new other than saying that if you had a tenancy before the protection scheme came into existence then any deposit taken in connection with that needs to be protected and if it isn't then you are liable. At least if I were constructing a legal argument using this case that's the rationale I'd be asking the court to apply.


13:34 PM, 17th June 2013, About 9 years ago

Conspiracy theory. Could this be the catalyst required to justify a complete re-write of all landlord & tenant (and letting agent) legislation?

13:35 PM, 17th June 2013, About 9 years ago

The case itself was based on very specific facts:

A pre 6th April 2007 tenancy, which then was not subject to the then deposit requirements, but had a renewal Periodic tenancy post 6th April 2007 which was.

It stated that the new tenancy (periodic) required the original deposit, which hadn't been registered, to be registered.

A massive leap and assumption has been made on this thread - which was not determined in this case.

That is that any deposits post 6th April 2007 that have been properly registered, need either to be re-registered, or have the Prescribed Information re-submitted when they become periodic.

This is not what the case states, nor it's determination.

I appreciate that the case does raise the question, but the answer as yet has not been provided by the courts.

To give tenancy agreements normal business efficacy, it is highly likely that should the matter be considered by the courts, then they will suggest that any properly registered original deposit and Prescribed information is carried over to the new periodic tenancy, and with the Prescribed Information deemed to have been already being served.

If this isn't decided in this way, then we'll all be in breach of our mortgages, the country will go bust and the last person left should turn out the lights 🙂

13:42 PM, 17th June 2013, About 9 years ago

Mark, I have just spotted this on the Guild of Residential Landlords site.

As the statutory periodic tenancy is a new tenancy, the court held that in effect, the landlord had repaid the deposit to the tenant under the fixed term tenancy and then immediately the tenant had in effect paid a new deposit to the landlord for the new statutory periodic tenancy. This is the same as if a renewal had taken place:

Looks as if the landlords obey the laws of thermodynamics and cannot win.

Paraphrased the three laws of thermodynamics are
You cannot win you can only break even
You can only break even at absolute zero
You cannot reach absolute zero

After this ruling most landlords are close to absolute zero!

Mark Alexander - Founder of Property118 View Profile

13:48 PM, 17th June 2013, About 9 years ago

@ Jonathan and Glenn - I have read the Court of Appeal ruling in full many, many times I can assure you so I am confident that I know what it says and more to the point, the implications of what it says.

Do you agree that it says a Statutory Periodic is a NEW tenancy?

Do you agree that a NEW tenancy requires a deposit to reprotected within 30 days and that a deposit protection certificate and prescribed information needs to be issued to the tenant within that same period?

Jan Martin

13:49 PM, 17th June 2013, About 9 years ago

Have just spoken to My deposits who assure me that I do not need to protect statutory periodic tenancy. I also have it in writing on an email.
I have spoken to RLA who have heard nothing about this at all. They are looking into this now.

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