Landlords everywhere using a tenancy deposit scheme will be relieved to learn that the government is taking action on the problems raised by the Superstrike case.
This will be via an amendment to the Tenancy Deposit legislation which will be done through a late amendment to the Deregulation Bill.
The effect of this will mean that:
- Landlords who have already protected and served their prescribed information notices will be all right – they will not have to do it again if the tenancy runs on as a periodic after the end of the fixed term.
- Deposits taken before 7 April 2007 (when the tenancy deposit scheme regulations first came into force) and not protected, will now need to be protected within 3 months of the regulations coming into effect
However as with the last amendment (via the Localism Act 2011), this amendment to the tenancy deposit scheme rules is focused just on one issue – in this case the problems raised by Superstrike. It does not take a wider view and attempt to deal with any of the other issues that have arisen. In particular:
– Landlords leaving an insurance based tenancy deposit scheme
There has been a fair amount in the press about this – if a landlord is expelled from a tenancy deposit scheme, then the deposits held by him are unprotected and tenants will get no redress if he fails to return them
– The definition of a deposit
This problem was dealt with in part by the case of Johnson v. Old but this case only dealt with the facts in the issue in that case. There will no doubt be other circumstances where landlords take payment as rent in advance where Johnson v. Old does not apply.
It would be nice to have clarity.
– A prescribed form
Then it would be helpful if a standard prescribed form could be issued so landlords can be sure that the form they are serving on tenants is correct. This could provide for the landlord to attach the leaflet published by his tenancy deposit scheme relating to their terms and conditions.
At present there are a plethora of forms from different organisations which is a bit confusing.
However at least the immediate problem is being dealt with.
Note, for further details on the amendment see the Nearly Legal Post on the topic
I’m wondering if the wording of the amendment will not create new problems.
Indeed it states that a deposit cannot be deemed received only by reason of the creation of a statutory periodic AST. So should not the landlord refund the deposit?
It would be good a see a real-redrafting of the Act to make clear that once a deposit is protected and PI given for an initial tenancy there is nothing more to do for all and any replacement tenancy. Why making a special case of statutory periodic ASTs?
I agree that a comprehensive review of this unhappy legislation would be a good idea, but I can’t see it happening in the immediate future.
I am inclined to think that the proposed amendment will work for the immediate problem (ie Superstrike) but I certainly don’t rule out further problems in the future.
“•Landlords who have already protected and served their prescribed information notices will be all right – they will not have to do it again”
But worth clarifying that this only applies for tenancies that started before 6th April 2006.
Sub-section 3(c) means that anything subsequent to this date will need new Prescribed Information when the tenancy is renewed for a fixed term or goes periodic.
Unless I’m reading it wrong?
I think you are reading it wrong.
Any idea when this will come in?
Thanks mark.
Ah yes, I was incorrectly reading section 3 as the conditions for 1 and 2, but it actually lists the conditions where section 4 applies.
“There has been a fair amount in the press about this – if a landlord is expelled from a tenancy deposit scheme, then the deposits held by him are unprotected and tenants will get no redress if he fails to return them”
The tenants may not be able to use ADR but presumably as an offence will have been committed after 30 days in the wilderness a s213 claim can still be brought – surely?
There is another proposed amendment, which I think is much better drafted and comprehensive:
http://www.publications.parliament.uk/pa/bills/cbill/2014-2015/0005/amend/deregulationaddednames.pdf
Apparently I was linking to the wrong amendment – sorry about that!
I have amended the post slightly or you can see more detail on the Nearly Legal post here http://nearlylegal.co.uk/blog/2014/06/make-mend/