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

Text Size

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

Mark Alexander - Founder of Property118 View Profile

13:53 PM, 17th June 2013, About 9 years ago

@Jan, please post the words in the email you received from MyDeposits here.

I would be VERY interested to know whether any landlord can get confirmation from a Deposit Protection Provider to guarantee this advice, i.e. take responsibility for the advice given if it is proven to be wrong.

13:55 PM, 17th June 2013, About 9 years ago

Oh good... Nice to see the Court of Appeal has it's finger of the pulse of the lettibgs business.. Shall we all just give up now?

Rob

14:16 PM, 17th June 2013, About 9 years ago

I was told by my deposits when a Tenancy ends and it goes onto periodic you just go onto your account page and tick the box to confirm its now gone onto periodic! I was not told the deposit had to be re protected. If the rules have now been changed then surely it can't apply to what we have previously done.

Jan Martin

14:16 PM, 17th June 2013, About 9 years ago

This is what i received from my deposits today at 13.36 pm

INSURANCE -BASED TENANCY DEPOSIT PROTECTION SCHEME.

Dear Jan
Thank you for your recent e-mail.
We would like to take this opportunity to make you aware that the deposit proptection last for the the length of the tenancy agreement, plus and Statutory Periodic Tenancy that may follow. You would only have to purchase a new protection for the same tenant if you issue them with a new fixed term.
Kind regards MARTYN SWEENEY.

Ialso spoke to a chappie by the name of Jamie at 1.00pm who told me that scheme rules say i do not have to protect Statutory periodic tenancies.

Mark Alexander - Founder of Property118 View Profile

14:25 PM, 17th June 2013, About 9 years ago

@Jan - thank you, make sure you hold onto those emails like they are gold. There are several very similar comments from Deposit Protection providers here on Property118.

I strongly suspect the ramifications of the Supertrike vs Rodruiguez case have not yet filtered through these organisations yet and that when they do, mass panic will ensue.

Duncan Horncastle

14:40 PM, 17th June 2013, About 9 years ago

Surely the case stands on the fact that the landlord never protected the tenants deposit at all, even after the AST ended and the periodic started. If he had protected the deposit when the legislation came in during the AST or when the periodic stared he would not have been in this mess

14:55 PM, 17th June 2013, About 9 years ago

The Best solution is to move away from Deposits and use Insurance, this would cover furniture damage and loss of rent, and could be added to rent or covered by Tenants or Landlords. I have lost track of number of Landlords who tell me deposits never is anothe to cover damage or loss of rent. so insurance seems the best option not having to pay Deposits may end voids and be positive.
Certainly after this My Business Housemartins will be looking at this as an option to offer.

Mark Alexander - Founder of Property118 View Profile

15:02 PM, 17th June 2013, About 9 years ago

Just picked up on this Tweet from Steve Wood who is the Head of Dispute Resolution at Coffin Mew, the solicitors acting in this Court of Appeal case. I have invited Steve to comment here.

Jan Martin

15:06 PM, 17th June 2013, About 9 years ago

Yes mark I will hang on to them as they are telling me thats the way the scheme works so i cant do anything differently myself so therefore surely I can not be in the wrong. ?
I am surprised that mark calls not renewing contracts "sloppy practce".
Like yourself I have put thought and life experience into not giving new contracts and thought it the best way. If tenants want to leave they just go anyway and yes they may be liable for rent arrears etc but you gotta find them and then comes the courts etc. Suppose others will think differently but surely there will always come the time even when you are going to renew contract that you may end with just a months notice.perhaps Mark asks the tenants to sign up 2months before?
Situations do change into a tenancy and I just try to cover the unknown .

Mark Alexander - Founder of Property118 View Profile

15:12 PM, 17th June 2013, About 9 years ago

I have invited Justin Selig from The Law Department to post advice on best practice moving forwards in view of this and I have also invited Steve Woods from Coffin Mew solicitors, who acted for the landlord on this case, also to comment here.

Landlord Tax Planning Book Now