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Prepared by:
Likely Implications of Tenancy Deposit Protection Case Superstrike Ltd -‐v-‐ Marino Rodrigues
The 14 June appeal judgment in the Superstrike v Rodrigues case has created a significant amount of uncertainty in the private-‐rented sector, particularly as it has the potential to cause a great deal of damage to landlords who complied with the law to the best of their ability.
The Court of Appeal judgment case only creates a precedent for instances which replicate the circumstances of the tenancy in question. Namely:
-‐ A tenancy which began prior to 6 April 2007, for which a deposit was taken -‐ Which was allowed to continue on a periodic basis post-‐April 2007 without substantial change -‐ Where the deposit has never been protected (because it was received prior to the legal requirement to do
so).
However, it did determine that Statutory Periodic Tenancies should be considered new tenancies, separate from the initial term. This has encouraged a great deal of speculation about the potential implications for landlords who lawfully protected deposits post-‐April 2007 but subsequently allowed tenancies to continue beyond their fixed term.
It is worth noting that the information included in the following pages has not been tested in law, and does not constitute advice, as we cannot possibly know how a court would rule in untested circumstances.
It is also important to remember that this appellate decision could be further challenged and perhaps even over-‐ruled by the Supreme Court.
Even if this does not happen, the organisations listed below have challenged the Government to legislate in order to prevent further confusion and damage to the industry and landlords’ confidence.
In the meantime, the following table should serve as an indication of the exposure different landlords may have to tenancy deposit protection legislation sanctions ‘post-‐Superstrike’. (Please note we have attempted to capture the most likely circumstances, but realise that the list is not exhaustive).
However, if a tenancy is performing well there is not necessarily any immediate need to take any action but it is worth considering your exposure to potential sanctions should you need to use s21 or believe that your tenant may be considering legal action on the basis of this legal precedent. Further guidance is available from the TDP scheme providers.
Prepared by:
Tenancy Start Date:
Current Tenancy Status:
Deposit Status: Risks: Options
Pre-‐6 April 2007*
Became periodic post-‐6 April 2007
-‐ Received -‐ Not protected (in
accordance with existing legal requirement)
-‐ Unable to use s.21
-‐ Potentially open to sanction of 3 x deposit amount and return of the deposit
-‐ Negotiate a new fixed tenancy, protecting any deposit taken accordingly. OR
-‐ Return deposit OR
-‐ Protect deposit and issue prescribed information
OR -‐ Use other means to end
tenancy if necessary OR
-‐ Wait and see if the legal situation is rectified
Renewed post-‐6 April 2007 (not subsequently allowed to become periodic)
-‐ Received pre-‐6 April 2007 (not protected)
-‐ Deposit re-‐received (whether money has been exchanged or not)
-‐ Protected in accordance with s213 of Housing Act 2004 on renewal
-‐ Relevant prescribed information issued
-‐ Zero -‐ No action necessary
Post-‐6 April 2007 Pre-‐6 April 2012
Became periodic post-‐6 April 2007 / pre-‐6 April 2012
-‐ Received -‐ Initially protected according
to s213 of the Housing Act 2004
-‐ No re-‐protection -‐ No re-‐issue of prescribed
information
-‐ Potentially unable to use s.21 if deposit was not protected and prescribed information not served by 5 May 2012
-‐ Potentially open to sanction of 3 x deposit amount and return of the
-‐ Negotiate a new fixed tenancy, protecting any deposit taken accordingly.
OR -‐ Refund the deposit to
remove the risk of challenge and allow service of s21
OR -‐ Confirm the deposit
remains protected with an authorised scheme.
Prepared by:
deposit Re-‐issue prescribed information in respect of valid protection to reduce the risk of challenge and allow service of s21
OR -‐ Wait and see if the legal
situation is rectified Became periodic post-‐6 April 2012
-‐ Received -‐ Initially protected according
to s213 of the Housing Act 2004
-‐ No re-‐protection -‐ No re-‐issue of prescribed
information
-‐ Potentially unable to use s.21
-‐ Potentially open to sanction of up to 3 x deposit amount and return of the deposit
-‐ Negotiate a new fixed tenancy, protecting any deposit taken accordingly.
OR -‐ Refund the deposit to
reduce the risk of challenge and allow service of s21
OR -‐ Confirm the deposit
remains protected with an authorised scheme. Re-‐issue prescribed information in respect of valid protection to reduce the risk of challenge and allow service of s21
OR -‐ Wait and see if the legal
situation is rectified Renewed post-‐6 April 2007 (not subsequently permitted to become periodic)
-‐ Deemed to have re-‐received
-‐ Protected according to s213 of the Housing Act 2004
-‐ Re-‐protected -‐ Re-‐issue of prescribed
information
-‐ Zero -‐ No action necessary
Prepared by:
Post-‐6 April 2012
Still within initial fixed term
-‐ Received -‐ Protected according to s213
of the Housing Act 2004, as amended by the Localism Act 2011
-‐ Prescribed information issued
-‐ Zero To avoid future exposure: -‐ If becoming periodic -‐
at end of fixed term re-‐protect deposit and re-‐issue prescribed information in accordance with the TDP provider’s scheme rules
-‐ If renewed – re-‐protect and re-‐issue as usual.
OR -‐ Wait and see if the legal
situation is rectified
Renewed after expiry of fixed term
-‐ Deemed to have re-‐received
-‐ Re-‐protected according to s213 of the Housing Act 2004, as amended by the Localism Act 2011
-‐ Prescribed information re-‐issued
-‐ Zero -‐ No action necessary
Has become periodic -‐ Received -‐ Initially protected according
to s213 of the Housing Act 2004
-‐ No re-‐protection -‐ No re-‐issue of prescribed
information
-‐ Potentially unable to use s.21
-‐ Potentially open to sanction of up to 3 x deposit amount and return of the deposit
-‐ Negotiate a new fixed tenancy, protecting any deposit taken accordingly.
OR -‐ Refund the deposit
reduce the risk of challenge and ensure s21 is valid
OR -‐ Confirm the deposit
remains protected with an authorised scheme. Re-‐issue prescribed information in respect of valid protection to
Prepared by:
reduce the risk of challenge and allow service of s21
OR -‐ Wait and see if the legal
situation is rectified *Only instance tested in law
This document does not seek to provide guidance in respect of in respect of individuals’ specific circumstances, neither should any part be considered legal advice. Further information or guidance is available from your particular scheme provider(s).
As all circumstances vary it may be beneficial to seek specialist legal advice.
Last amended 31 July 2013
