Potential change in landlord tenancy deposit law

Published: 13/09/2013

The government is considering rewriting laws surrounding tenancy deposits following the controversial ruling in the Superstrike Ltd vs Rodrigues case.

In January 2007 Marino Rodrigues entered into a 12-month fixed tenancy with Superstrike Ltd, paying a deposit of £606.66. At the end of the fixed term, he continued to live in the property on a periodic tenancy. No new tenancy agreement was entered in to and the landlord retained the initial deposit.

Mr Rodrigues remained a tenant of Superstrike Ltd until 22 June 2011 when the landlord was granted possession after serving a Section 21 Notice. However possession was then revoked on the grounds of ‘non-compliance with the rules on tenancy deposit protection’.

Despite his subsequent appeal, the Court of Appeal ruled that a new tenancy had been created on 8 January 2008 and therefore any deposit should have been re-protected.

However Housing Minister Mark Prisk has now indicated that this was not the intention of the law and may look at making changes to protect landlords.

In a letter to the Residential Landlord Association (RLA) Mr Prisk wrote:

“There are concerns that the Court of Appeal decision means that where a deposit was taken for an assured shorthold tenancy before the introduction of tenant deposit protection and continued as a statutory period tenancy after 6 April 2007, the landlord should have protected the deposit at the start of the statutory period tenancy.

“This was not the intention of the legislation and we are urgently exploring whether new legislation is required to clarify the situation.

“I understand that concerns have also been raised that the decision could have implications for some tenancies where a deposit has been protected in an authorised scheme in relation to a tenancy begun after 6 April 2007 and the fixed term has expired, and the tenancy continues as a statutory periodic tenancy.

“While the Court of Appeal did not make a decision on these particular facts and we cannot advise on individual cases, as a precaution, landlords could decide to re-issue the prescribed information to their tenant(s) which should ensure they can rely on the Section 21 procedure if they wish to end the tenancy. Again, we are exploring whether new legislation is required to clarify the situation.”

Content correct at time of publication