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Tag Archives: Court of Appeal

How to help bring about changes to legislation post “Superstrike” Buy to Let News, Guest Articles, Guest Columns, Landlord Action, Landlord News, Latest Articles, Legal, Letting, Lettings & Management, Property Investment News, Property News, The GOOD Landlords Campaign

One of the things that are uppermost in landlords’ minds at the moment is the concern that we are vulnerable to possible litigation following the “Superstrike” case. The degree of that vulnerability varies from landlord to landlord and of course some landlords are not at all clear where they stand.Mary Latham

All of the deposit protection schemes and large landlords associations are working behind the scenes to persuade DCLG to tweak legislation to prevent courts being overrun with cases from tenants who have not actually been deprived of their legal rights but have become aware of the loophole that Superstrike highlighted.  In other words they are not asking for a change in the law which would enable those landlords who do not/did not protect their tenants deposits (HA 2004 & Localism Act 2012) to get away with it.  What they are asking for is a change which prevents those landlords who believed that they were acting within the law from facing litigation from their past and present tenants. These are the landlords who do/did protect their tenants deposits and provided the tenant with the Deposit Protection Certificate and Prescribed Information for Tenants within 30 days of having received the deposit but who were unaware that they needed to provide the documents again, despite the deposit protection continuing and no new paperwork being issued, at the point at which the fixed term of the tenancy ended and a Statutory Periodic Tenancy began (HA 1988). There are also those landlords who have tenancies that began before the Deposit Protection legislation came into affect (HA 2004) and therefore did not protect their tenants deposits. These landlords were also unaware that if the tenancy became a Statutory Periodic Tenancy at the end of the fixed term after the law changed that they should have protected the deposit and served the documents on their tenants. This last point was the crux of the Superstrike case.

In addition to the concerns many of us have about the potential litigation (it has not yet been established that there is actually a threat beyond the circumstances of Superstrike) is the issue of not being able to regain Possession of properties using Section 21 (HA 1988)

In order to convince Government that this is a major problem in the PRS they need to be shown actual evidence and the only people who can give them that evidence is us (landlords and letting agents).  All of the organisations involved in the discussions have produced a short survey to gather the facts.

The combined results will be present to DCLG.

The survey will take just a few minutes of your time and will not ask you to identify yourself.

If you do not take the time and trouble to complete the survey we may lose the argument and fail to get the legislative changes that we all need. 

Please follow the link  below and do your part to bring about a solution for us all before the Courts are filled with cases brought by the “No Win No Fee” people that have sprung up to make easy money from landlords who have simply made a mistake and have not in any way deprived our tenants of their legal rights.

Please also send a link to this article to every landlord you know to make certain they aware of this very important survey.

Click this link >>> https://www.surveymonkey.com/s/NLASS

When I completed the survey I found that I needed to read it first then work out which category my deposits fell into before going back and completing it – which took less than 2 minutes. By doing the calculations for this survey I am now clear of where I stand with each of my tenancies.

This was a useful exercise and may help me going forward when the inevitable happens and a landlord is sued by a tenant for one of the possible scenario.

I think that you may find this helpful too.

NLA warns landlords of “no win no fee” deposit protection lawyers Latest Articles, NLA - National Landlords Association

Speaking recently on BBC Radio 4 Carolyn Uphill, Chairman of the National Landlords Association (NLA) warned landlords to ensure their tenants’ deposits are properly protected and that they’ve fully complied with Tenancy Deposit Protection (TDP) law.

The warning comes after a growing number of information requests to TDP schemes from ‘no win no fee’ claims companies who, on behalf of tenants, are targeting landlords who may not have fully protected deposits.

All landlords in England and Wales must by law protect their tenants’ deposits within a Government authorised TDP scheme and must also ensure that they pass on important information about where and how it was protected – known as the Prescribed Information – to the tenant within 30 days from the start of the tenancy.

Failure to do so could lead to heavy penalties and claims companies seem to be inviting tenants who haven’t received their prescribed information to make a claim against their landlord – even if the deposit is protected.

Carolyn Uphill, Chairman of the NLA said:

“You have to ask where the financial loss for the tenant is. The majority of tenant’s deposits are being protected and ninety nine per cent of tenancies end without any issues over the return of the deposit. Where problems do arise, the tenant has access to a free and impartial decision using the scheme’s dispute resolution service.

“Of course, where there is blatant disregard for the law landlords can have no argument and must be brought to rights. However, these claims firms are looking to exploit those landlords who have protected their tenant’s deposits but may not have properly issued the prescribed information.

“In practice this could simply mean not providing their tenant with a leaflet about where the deposit is protected.

“This sort of action is morally questionable, unnecessarily punitive and will only work to undermine the good relationship that exists between the majority of landlords and their tenants”.

Eddie Hooker, CEO of Tenancy Deposit Scheme my|deposits, also commented:

“It has always been the landlord’s responsibility to protect the deposit and a vital part of the process is to pass the Prescribed Information on to the tenant.

“Landlords must be aware that they are ultimately responsible even if they use a letting agent. Our advice is to check with your agent or directly with your deposit protection scheme to ensure all of your deposits have been properly protected.

“Those who fail to comply with either step of the legislation leave themselves open to potential fines of up to three times the deposit value and could fall prey to these kinds of claims companies.

Mark Alexander, founder of Property118 recently highlighted the marketing activity of these companies – see this thread.

Mark Alexander also commented:-

Following the case of Superstrike Limited vs Rodrigues at the Court of Appeal it is now unclear whether landlords should have re-issued Prescribed Information when when a tenancy became Statutory Periodic at the end of a fixed term. The ruling was that deposits taken pre April 2007 should have been protected when a new statutory periodic tenancy came into being after Tenancy deposit Protection laws came into force. This is because it is now clear from legislation that a Statutory Periodic Tenancy is a new tenancy and that all deposits taken in respect of new tenancies should be protected. What is not clear is whether a deposit which was protected and remained protected needs to be re-protected and new deposit protection certificates and prescribed information to be served. The guidance issued by the Deposit Protection Schemes is  unclear on this point and concludes that only new legislation or a ruling in the High Courts will clarify this matter. To date, no lawyers have publicly announced a solution which could protect landlords and letting agents from claims if such a ruling goes the wrong way.

Tenants Claimline

 

Updated guidance on Superstrike Deposit Protection case Advice

The four tenancy deposit protection scheme providers have collectively issued guidance notes following the Court of Appeal ruling in the case of Supertrike Limited vs Rodrigues. Guidance from deposit protection schemes following the Supertrike Case

Landlords and Letting Agents should note that none of the tenancy deposit schemes can offer legal advice to landlords or lettings agents.

Their guidance is not intended to give legal advice and cannot be relied on as such. If you have concerns you should get your own legal advice based on your own individual circumstances. However they set out their shared understanding of the position and the options they think are available to landlords and lettings agents in the future.

The guidance notes, which are available to download free by completing the form below this article, have been jointly produced by the authorised tenancy deposit schemes:

• my|deposits
• Tenancy Deposit Scheme (TDS)
• Deposit Protection Service (DPS)
• Capita

The Department for Communities and Local Government has met with the tenancy deposit schemes and has received a copy of these guidance notes.

Please download, have a read and then come back here and leave a comment.

You can be pretty sure the Deposit Protection providers will be reading comments left on this forum so don’t miss the opportunity to have your say.

Download the guidance notes here

 

Guidance from tenancy deposit protection schemes following the Superstrike Ltd. vs Rodrigues Court of Appeal case Buy to Let News, Landlord News, Latest Articles, Legal, Letting, Lettings & Management, Property Investment News, Property Investment Strategies, Property Market News, Property News, Tenant Eviction

The four tenancy deposit protection scheme providers have collectively issued guidance notes following the Court of Appeal ruling in the case of Superstrike Limited vs Rodrigues. Guidance from deposit protection schemes following the Supertrike Case

Landlords and Letting Agents should note that none of the tenancy deposit schemes can offer legal advice to landlords or lettings agents.

Their guidance is not intended to give legal advice and cannot be relied on as such. If you have concerns you should get your own legal advice based on your own individual circumstances. However they set out their shared understanding of the position and the options they think are available to landlords and lettings agents in the future.

The guidance notes, which are available to download free by completing the form below this article, have been jointly produced by the authorised tenancy deposit schemes:

• my|deposits
• Tenancy Deposit Scheme (TDS)
• Deposit Protection Service (DPS)
• Capita

The Department for Communities and Local Government has met with the tenancy deposit schemes and has received a copy of these guidance notes.

Please download, have a read and then come back here and leave a comment.

You can be pretty sure the Deposit Protection providers will be reading comments left on this forum so don’t miss the opportunity to have your say.

Download the guidance notes here

 

Tenancy agreements – At the end of the fixed term Landlord Law, Latest Articles

All good things come to an end – and in due course your  tenancy agreement’s fixed term will end too.

What happens then?

When the fixed term ends

Some people assume that the tenancy will end and that if the tenants stay on they will be squatters who can be easily evicted.  However you will probably realise that this is very far from the case!

All assured shorthold tenancies will continue, by virtue of a new ‘periodic’ tenancy which will come into place immediately the fixed term ends, under s5 of the Housing Act 1988.  So if the fixed term ends on 4 July, then the new periodic tenancy will start at about 1 second past midnight on 5 July.

The ‘period’ is linked to how the rent is paid.  So if the rent is paid monthly, this will be a monthly periodic tenancy and will run on from the 5th of the month to the 4th of the month.

So when the fixed term comes to an end – the parties have a choice.  They can either let the tenancy run on as a periodic, or sign up a new fixed term tenancy.

Which should you do?

Well either are fine.  Lets look at the options:

1. Giving a new tenancy agreement.  Letting agents often use this as a reason for a ‘renewal fee’ and are therefore understandably anxious for this to be done.  It can often be the best solution – both parties know where they are, and if you want to increase the rent, including it in a new tenancy agreement which is then signed by the tenant as agreed is probably the best way.

This is also a good time to incorporate any changes – for example if there are new tenants wanting to come onto the tenancy agreement, or if either party want the terms of the tenancy to be changed in any way.

2. Allowing the tenancy to continue as a periodic.  Although this is often thought of as a continuation of the original tenancy, in fact, unless perhaps the tenancy is continuing under a clause in the tenancy agreement, the periodic tenancy will actually be a new tenancy.

This is down to the wording in s5 of the Housing Act 1988 and the Court of Appeal have recently confirmed in the Superstrke case  that this is what happens.  So landlords need to consider whether their tenancy deposit needs to be re-protected and the prescribed information re-served.

Allowing the tenancy to continue as a periodic is often the best choice if the tenants have proved unsatisfactory and are being allowed to stay on approval.  If you issue a new tenancy agreement, then this will cancel any section 21 notice served, meaning that you will need to re-serve and will not be able to issue any proceedings under the notice until the end of the fixed term.

Whereas if the tenancy is a periodic, you will (assuming your section 21 notice period has expired) be able to issue proceedings immediately if the tenants continue to prove unsatisfactory.

Vacating the property and notice periods

Assuming that the tenants do not want to stay on – what are the rules regarding notice?

Generally landlords will want at least 1 month notice, usually more, so they can arrange for checkout meetings and the like.  However if the tenants leave at or before the end of the fixed term they are not actually obliged to do this.  If the tenancy is for, say, six months, and the tenants leave on the last day, then the tenancy will end by what we lawyers call ‘effluxion of time’.

There is no need for the tenants to give notice as the tenancy (that tenancy) ended then anyway.

This is a bit unfair on landlords as it means that the tenants can choose whether to stay on under a periodic or leave by the end of the fixed term, without letting the landlord know.

My tenancy agreement has a clause which requires the tenant to let the landlord know what he intends to do – but breach of this clause will not make the tenants liable for any rent in lieu of notice (if I tried to do this I would risk the clause being found unfair).  It may be sufficient though to allow the landlord to claim any wasted costs due to the tenants failure to provide proper information.

However if the tenant then stays on, even by one day after the fixed term has ended, the periodic tenancy will kick in and they will have to give not less than one months notice if they want to leave.  If they don’t then the landlord WILL be entitled to claim rent in lieu of notice.

But not if they leave on the last day of the fixed term tenancy.

Conclusion

This is the end of this short series of articles on tenancy agreements.  I hope you have enjoyed it.

If you want more, note that I have a lot of guidance in my free Tenancy Agreements 101 which you can sign up for here.Tenancy agreements - At the end of the fixed term

National Landlords Association Issues IMPORTANT Message to Landlords Latest Articles, NLA - National Landlords Association

On 14th June 2013 Lord Justice Lloyd delivered his judgement on an appeal from the Wandsworth County Court in the case of Superstrike Ltd vs Marino Rodrigues. Since its publication there has been a lot of discussion on the online property forums and at local NLA meetings about the potential impact that this judgement may have on landlords.

Unfortunately, much of this commentary has not fully understood the facts of the case or the way in which a judge constructs an appeal judgement. There is a distinct need for calm and greater clarity about this case. To this end, the NLA has been in discussion with legal professionals and the officials responsible for tenancy deposit protection (TDP) legislation within the Department for Communities and Local Government (DCLG).

It is important to understand that appeal judges only consider the case presented to them, not a similar set of circumstances, or a variation on a theme. The precedent they set is therefore only applicable to cases subject to the same set of circumstances. This fact is crucial in this instance as the case of Superstrike Ltd vs Rodrigues is not representative of all landlords or private tenancies.

The specifics are as follows:

  • The tenancy (an AST) began in January 2007, before the 6 April introduction of TDP
  • The tenancy persisted, on a statutory period basis, without renewal or changes from January 2008
  • No deposit was ever protected in relation to this tenancy, as it was received prior to this becoming a requirement
  • A Section 21 notice was served in June 2011 to end the periodic tenancy

The Judgement concludes:

  • That a statutory periodic tenancy is a new and distinct tenancy, not a continuation of the tenant’s previous status.
  • The legal position was that the deposit held by the landlord at the end of the fixed term was deemed to have been received in relation to the periodic tenancy in January 2008
  • As it was received in January 2008, after the introduction of TDP, it should have been protected.
  • As the landlord did not comply with Section 213 of the Housing Act 2004, they did not have the right to serve a Section 21. This rules the Section 21 invalid.

What it DOES NOT conclude:

  • The ruling does not apply to any deposits taken after 6 April 2007. i.e. it does not introduce a requirement to re-protect deposits held lawfully in accordance with a TDP scheme’s rules when a tenancy becomes periodic. 
  • The ruling does not look into financial sanctions; this case only focused on whether the landlord’s Section 21 notice was valid.
  • The ruling does not look into the need to provide prescribed information .

What does all of this mean?

  • If you have any tenancies which began pre-6 April 2007 and became periodic after 6 April 2007, for which you hold a deposit which was not protected, you may not be able to issue a Section 21 notice.
  • If you do not have any tenancies which match this description, this judgement should have no impact on you whatsoever. Depending on the TDP scheme used, you may receive correspondence in the near future asking you to confirm the status of tenancies for which the fixed term has ended but a request to unprotect the deposit has not been received.
  • Likewise, in the future you may be asked to let the scheme provider know when tenancies become periodic.

If I have pre-2007 tenancies like this, what should I do?

There is no simple answer to that question. Due to the nature of appeals, only the exact circumstances of the particular case in question are examined. The two ways to mitigate the risk of being caught out by this precedent are:

(1)    Return the deposit. This should remove the risk of a future  Section 21 being deemed invalid and is implied by the judgement. However, Justice Lloyd deliberately reserves judgement on this matter.

(2)    Protect the deposit. Likewise this should show intention to comply with the law and remove the risk. However, given the recent amendment to Section 215 of the Housing Act 2004, this may not be sufficient to avoid sanctions. Only a further legal case could determine this.

There is a third option available to landlords affected, which is not intended to mitigate risk and may not be advisable, but could be a valid course none the less, and that is:

‘wait and see’

It is entirely possible that this case will be taken to the Supreme Court, which could overturn the judgement. The NLA is keen to speak to the landlord in this case and is seeking legal advice to determine what options may be available to challenge the decision.

Furthermore, we are keen to impress upon ministers at DCLG that it has a responsibility to regain control over this legislation and should act swiftly to amend the Housing Act 2004 to remove this uncertainty – in the same way it did in 2011 following the Tiensia case.

We will provide regular updates on this matter as soon as more information is available.

EDITORS NOTES

To join is the discussion about this case please CLICK HERE

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Your thoughts on the Superstrike Ltd vs Rodrigues Court of Appeal implications please? At Property118 we have nearly 200,000 UK landlords and letting agents subscribed to our daily newsletters and Google News feed but very few L&T Lawyers engaging on our forums. (Yes we are an official Google Publisher). With this in mind I would like to offer members of this Linkedin Group a complimentary membership of Property118, see below.

Become a member FREE

  • By all means enter the name of your organisation as opposed to your own name. When you get to updating your profile we suggest uploading the logo of your organisation as opposed to your own picture. The choice, however, is of course yours.
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Landlord power can and will get Deposit Protection rules clarified Buy to Let News, Landlord News, Latest Articles, Property News

Landlord power can and will get Deposit Protection rules clarifiedThe potential implications of the ruling that a Statutory Periodic Tenancy is a new tenancy, according to the Court of Appeal ruling in Superstrike Ltd vs Rodruigues, has reverberated around the industry at lightening speed. Every popular landlord forum, blog and Facebook group has carried articles and thousands have been motivated to express concern. Indeed, my own article had over 3,000 readers and 100 comments left within just one day.

My initial reaction was one of pure panic and terror for what the implications might be. However, with time I have come to realise that once the powers that be recognise the implications of not adding further clarity to the legislation, I suspect we will receive the clarity we need.

So what is the ideal outcome we should all be hoping for? Continue reading Landlord power can and will get Deposit Protection rules clarified →

Deposit Protection Providers call emergency meeting following Court of Appeal Ruling Buy to Let News, Landlord News, Latest Articles, Property News

Deposit Protection Providers call emergency meeting following Court of Appeal RulingMark Alexander, editor and founder of Property118 tweeted the Deposit Protection Providers last night highlighting his fears on the ramifications of the Superstike vs Rodrigues Tenancy Deposit Protection Court of Appeal case. They are calling emergency meetings.

See the response below and read their interim press statement.

 

Interim Press Statement from the Deposit Protection providers

Court of Appeal – Superstrike Ltd v Rodrigues

A joint statement from the Tenancy Deposit Scheme, MyDeposits and The Deposit Protection Service

We have read with interest the latest judgment from the Court of Appeal on deposit protection. Whilst landlords and lettings agents need to take their own legal advice, we will be considering the implications of this judgment for deposit protection and the service of Prescribed information. We will also need to consult the DCLG on this and we will be issuing a further joint statement when we have fully considered the matter.

Justin Selig from The Law Depatment and Landlord Action said:-

I, together with my colleagues at Landlord Action have looked into this in some detail today – we do agree with Mark – this is potentially very serious, but when looked at in detail – it does not make any sense at all.

Firstly, if you are a Landlord and your Tenant occupies your property under an Assured Shorthold Tenancy and you have taken a deposit from your Tenant, then this applies to you. If you have not taken a deposit, then you have nothing to worry about.

If you have taken a deposit at the beginning of the fixed term of the tenancy, and the tenant remains in the property beyond the expiry of the fixed term, then according to this case the periodic tenancy is deemed to be a “new” tenancy. According to the rules relating to deposit protection, a deposit for a new tenancy needs to be protected.

The Court of Appeal ruling states that a deposit is deemed to be received at each renewal – so in the case they were dealing with, the switch from fixed term to periodic meant that a new deposit was deemed to have been received – and because the time it was received was after April 2007 it therefore required protection for that particular tenancy.

I think the arguments as to whether or not this issue applies to deposits received pre or post April 2007 are irrelevant as all deposits being held today (regardless of when they have been received) must be protected by virtue of the Localism Act 2011.

The question is, therefore – where you are holding a protected deposit – do you need to re-protect it each time there is a renewal of a tenancy? At present, I think the answer to that question is, yes – but hopefully I will be proved wrong on this.

Therefore, anyone who is holding a deposit received at the beginning of a fixed term is required to re-protect that deposit when it moves to a periodic. There is a further problem which may hopefully highlight how this does not make sense. A periodic tenancy is deemed to be renewed at the expiry of each period. Therefore, if you follow the argument – this would mean that the deposit would need to be re-protected at the beginning of each period. Most periodic tenancies are monthly – so the deposit would need to be re-protected monthly.

Obviously this does not make sense, nor I am sure is this the intention of the legislation. So how does a Landlord protect himself?

The first thing I would do is to obtain written clarification from the deposit protection company you are using as to their take on the ruling, and comply with their recommendations. Secondly, as a minimum, and you have a fixed term tenancy about to go onto a periodic, you should at least protect your deposit again when it goes periodic. (Personally, I would actually return the deposit to the tenant – but I appreciate that this is not always practical.) Thirdly, and for belt and braces protection – where you are still holding the deposit, you may want to consider not allowing the tenancy to go onto periodic, but to re-issue the tenant with a new fixed term – and re-protecting the deposit for that fixed term.

I hope that the Landlord does decide to appeal this decision and take it to the Supreme Court as some further clarification is definitely needed.

Superstrike Ltd vs Rodrigues Tenancy Deposit Protection Court of Appeal Latest Articles

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? Continue reading Superstrike Ltd vs Rodrigues Tenancy Deposit Protection Court of Appeal →

Judges back valuers in buy to let negligence appeal Latest Articles, Property Investment News

rustic looking Gavel

-Landlord loses battle for compensation-

Buy to let landlords have lost the chance to claim compensation from surveyors who overvalued an investment property following a successful appeal.

The Court of Appeal reversed a previous ruling against Bank of Scotland owned valuers Colleys in which a judge held a surveyor had a duty of care to a home buyer.

The decision means a valuer instructed by a lender has no legal obligation to a buyer who may rely on their valuation to underwrite the price and likely rent a property will achieve. Continue reading Judges back valuers in buy to let negligence appeal →

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