The Deregulation Act 2015 & Tenancy Deposits

 

The Deregulation Bill received Royal Assent on 26^th march this year and became The Deregulation Act 2015.

This Act contains important changes to deposit legislation which hopes to clarify the headcahes created  by the court cases of Superstrike vs Rodrigues and Charalambous vs Ng.

 A brief reminder of the cases

In Superstrike vs Rodrigues the judgement stated that a statutory period tenancy which arose after the fixed term had ended, should be seen as a ‘new’ tenancy and ruled that a deposit taken on Tenancy agreements entered into  before the Tenancy law was in place on 6 April 2007 and which then either renewed or continued as a periodic tenancy should have been protected (or re-protected) with the up to date prescribed information (PI) served on the tenant.

In Charolambous vs Ng the judgement stated that even though a deposit was taken before tenancy legislation on 6th April 2007, because it had not been protected and PI served, a Section 21 notice served on the tenant was invalid.

So what had  the Deregulation Act 2015 put in place?

1.If you took a deposit on any Assured Shorthold Tenancy (AST) before April 2007 and have not protected it.

You must protect the deposit and serve Prescribed Information by 23rd June 2015, otherwise you will not be able to issue a Section 21 notice at any point in the future.

However, it’s important to note that there are no penalties for any landlords who don’t protect deposits in these circumstances. This effectively confirms the decision in Charalambous vs Ng.

 2.If you took a deposit on a tenancy after  6 April 2007 and protected and served the PI, and the tenancy has since either rolled into a periodic or been renewed, then as long as the deposit is still protected in the same scheme and the tenancy details have not changed you will be deemed to have complied. In other words, this specific change overturns Superstrike vs Rodrigues judgement.

 3.If you took a deposit on an AST before April 2007 and the AST subsequently rolled into a Periodic or was renewed after April 2007, then the deposit must be protected and PI served by 23rd June 2015. You will not be able to serve a Section 21 notice and WILL be liable for penalties for non-compliance until you’ve protected the deposit.

 4.The final change (which isn't in relation to Superstirke or Charlambous) allows the agent’s details to be used on the PI where they have taken and protected the deposit on the landlord’s behalf. Previously there was doubt as to whether the agent’s details could be provided instead of the landlord’s when the agent took the deposit and protected it on the landlord’s behalf.