I have learned of an interesting letter from housing minister Mark Prisk, published on the Residential Landlords Association website, which confirms the governments concern at the recent decision in the case of Superstrike v. Rodrigues.
The Superstrike v. Rodrigues case
The Superstrike case itself (which I discussed here) is about a deposit which was taken prior to the regulations coming into force. Mr Prisk confirms that it had been the governments intention that the regulations would not affect these deposits.
Cause for complaint
If the decision is allowed to stand, particularly if it is also held to apply to post April 2007 situations where the deposit HAS been protected within 30 days of payment but not re-protected or where the prescribed information was not re-served at that time, then landlords do have some considerable cause for complaint.
For example if it had been made clear last spring that the legislation would apply to pre April 2007 deposits, landlords could have protected them prior to 6 May 2012.
This was the last day of the ‘amnesty’ period allowed to landlords to regularise their tenancy deposit protections at the coming into force of the Localism Act 2011 amendments last year.
New laws – what they could do
I don’t think that it would be appropriate for new legislation to say that a periodic tenancy arising after the end of a fixed term is not a new tenancy, for the reasons I set out here.
However it would be very easy for the legislation to state that
- so long as the deposit is treated as being protected under the rules of the relevant tenancy deposit company, re-service of the prescribed information will not be necessary, and
- where a deposit has been taken prior to April 2007, the arising of a periodic tenancy after that date will not be treated as a new tenancy for the purpose of the tenancy deposit regulations.
Wait and see
The Minister’s letter makes it clear that government is “exploring whether new legislation is required to clarify the situation”.
Pending this, I suggest that landlords wait and see what happens.
Any landlords who are sued by their tenants on the basis of the Superstrike case, should contact one of the landlords associations. It is possible they may be prepared to help fund the litigation as a test case (although this is just a guess – I have no inside information).
However as a precautionary measure landlords should also arrange for the prescribed information to be re-served whenever a tenancy becomes periodic after the end of a fixed term.
Amending legislation – a request
Although the Superstrike decision itself has come as a bit of a surprise to people, the question of if and (if so) when a deposit taken before April 2007 needs to be protected has never been clearly stated in the legislation.
Had this matter been addressed in the Localism Act amendments, the Superstrike case would probably never have happened.
However I understand that the draftsmen refused to consider anything other than the resolution of the problems raised by the Tiensia and Hashemi cases. Despite the fact that various other issues were pointed out to them at the time.
I hope that if further legislation is introduced, government listen this time to advice and ensure that any other open issues are addressed. For example unresolved issues left after the Johnson v. Old case relating to the definition of a deposit.
Then maybe landlords will finally know where they stand and the industry can settle down.