The 6th April 2007 saw the implementation of statutory requirements for a landlord to protect a tenancy deposit and serve “Prescribed Information”. There have already been many cases litigating this issue, indeed the legislation was amended with effect from 6th April 2012 (subject to transitional arrangements).
The implications of failing to protect a tenancy deposit when required expose the landlord to a financial claim from the tenant, such a claim could be used to defeat a possession claim brought by a landlord based upon rent arrears. Similarly a failure to protect the deposit when required prohibits a landlord from serving a Section 21 notice, therefore precluding the landlord from seeking possession based upon Section 21 at the end of the tenancy’s fixed term.
The recent case of Superstrike Ltd v Rodrigues [2013] EWCA Civ 669 involved the Court of Appeal deciding whether the obligations to protect a tenancy deposit apply to tenancies which (1) carried on as a periodic tenancy after 6th April 2007; (2) the deposit had been received after 6th April 2007.
In this case the Court decided that the periodic tenancy (this being the tenancy which occurs after the fixed term tenancy expires) was a new tenancy and therefore any new tenancies granted after 6th April 2007 requires the landlord to protect the deposit.
As for the receipt of the deposit obtained before the relevant date although held in respect of a “new” periodic tenancy; the Court decided that the landlord had received the deposit at the date of the new tenancy, therefore the deposit protection legislation would apply if the date of the periodic tenancy was after 6th July 2007.
At Benchmark Solicitors our experienced landlord and tenant solicitors can assist in all matters concerning tenancy deposits.