A seemingly obscure case in the Court of Appeal is proving a headache for politicians and could be a problem for some residential landlords.
The effect of the ‘Superstrike’ case, the name of one of the parties involved, could have far reaching effects for landlords who have had the same tenants in a property since before deposit protection legislation came into effect in April, 2007.
In Superstrike, what’s known as a Section 21 notice was served to evict the tenant but the move failed because the tenancy dated from January, 2007, and then continued in 2008 under what the appeal court determined was a separate statutory periodic tenancy.
The court ruled that this in effect created a new tenancy but the deposit had not been protected with a tenancy deposit scheme so the landlord was prohibited from obtaining the eviction order. However, politicians say this was not the outcome intended when legislation was drafted and they are now looking at how to correct the anomaly.
In the meantime, landlords who have not protected deposits need to do so using one of the approved schemes. They are obliged to serve the tenant with what’s called Prescribed Information and the scheme leaflet for the tenancy deposit organisation they use.
There are various options to overcome the situation and every landlord needs to be confident that they are in the right position individually with regard to deposit protection and also be aware that further court rulings or legislative amendments from Government could further affect their position.
For further information; ‘Likely Implications of Tenancy Deposit Protection Case Superstrike Ltd v Marino Rodrigues’, has been produced in collaboration between the industry bodies ALA, BPF, NALS, NLA, RLA RICS and UKALA.I will happily point landlords in the right direction for the advice they need and in some instances may recommend that the deposit is returned to the Tenants prior to serving a Section 21 notice.
Head of Residential Lettings, Mayfair
T: 020 7493 0676