This is a case regarding tenancy deposits – you can see my blog posts on the case here and here.
There is some confusion about whether this case affects deposits taken since April 2007, and in particular whether deposits need to be re-protected and the prescribed information re-served when a periodic tenancy arises.
Guidance now issued by the Deposit Schemes
The guidance is the same for all schemes – you can download it from My Deposits page >> here along with a briefing document with comments on the implications of the case.
Basically:
- If your tenancy is still within the original fixed term
You are advised to check the deposit is still protected at the end of the fixed term and re-serve the prescribed information at that stage if the tenants do not vacate.
- If your tenancy has renewed either as a new fixed term or as a new periodic tenancy
(Eg the tenants have just stayed in the property on a month to month basis) – then it is possible you may be in breach already without realising it.
We don’t know if this is the case or not until there is another Court of Appeal of Supreme Court decision.
It is up to you whether you
- Re-protect (if necessary) and re-serve the prescribed information now or (bearing in mind that most tenancies end amicably with the tenants moving out)
- Re-serve the prescribed information just before you serve a section 21 notice (assuming the deposit is still protected).
This is all highly unsatisfactory and just shows what happens if legislation is not thought through properly.
I will post here if I hear any more news.
Last part:
“…in order to ensure full compliance with the implications of the Superstrike decision,
you should re-serve the Prescribed Information within 30 days of each renewal or the creation of a
statutory periodic tenancy.”
In all my years in the letting industry I don’t think I’ve come across such an utterly ridiculous situation. Agents would have to do this every month for many SPTs.
The 3 page grid of ‘Likely Implications’ is a nightmare and just shows how screwed up this situation really is. It’s worse than the confusion caused when they first launched deposit protection.
Sometimes I’m very glad most of our assured tenancies are non-shorthold.
“Agents would have to do this every month for many SPTs.”
Why?
A periodic tenancy continues from period to period. It is not a new tenancy that is created every period!
One of the commonest foolish mistakes/suppositions is the need to re-serve PI and re-protect every month a periodic tenancy rolls over. There is absolutely no need to do so it is one NEW tenancy which continues until the parties renew, or one serves notice on the other.
In simple terms here is what to do to ensure you comply with TDP whether you think it stupid or not:-
There is a huge amount of info now coming out and complex tables. In simple terms
Every time you do a re-let to new tenants protect and serve PI
Every time those tenants renew do the same
If those tenants go periodic, do the same
On existing tenancies
If they renew, do as above
If they go periodic, do as above
On all existing tenancies where they are still fixed term or periodic – review your paperwork and if not 100% correct i.e. you have protected and served 100% correct PI, decide what to do between nothing, satisfying TDP, or doing a renewal and satisfying TDP
All other comment is just additional words – do as above and be 100% safe.
Or don’t and risk it
IO.
I thought everyone was worried about it because the court of appeal ruled it was a new tenancy each time? If the ruling was just that a periodic tenancy is new the first time it’s created, then that’s nothing new, it’s how we’ve always seen it anyway.
We don’t do many ASTs so it’s not a big issue for us and so I hadn’t read the ruling. I’d appreciate you not calling me a fool though. You need to think about your language before posting.
The fact is the situation is still messy and the guidance as issued by TDS et al is still unnecessarily complicated.
I’m sorry Jamie, maybe I should not have published that comment. I will in future try to remove words and sentences which might be offensive (but will leave that one online so people know what we are talking about).
It would be VERY much appreciated if people could NOT post comments which could upset other users. I am going to be a lot stricter on this in future.
Please accept my apologies.