Tenancy Deposits – Strike 2

A number of my previous articles have referred to the case of Superstrike Limited –v- Rodrigues. I would refer you to my article which provides a summary of the case and the guidance that has previously been offered by me as to how Superstrike effects all tenancy deposits.

Briefly, the Superstrike decision was unique on its own facts insofar as it related to an assured shorthold tenancy which was granted before 6th April 2007 (the date when the requirement to register a tenancy deposit and provide prescribed information came into force). Within Superstrike, it was held that where there was a subsequent statutory periodic tenancy that arose after the 6th April 2007, the landlord was required, within 30 days of the start of that periodic tenancy, to comply with the tenancy deposit regulations.

This established the “Superstrike principle”, as I call it. If that principle is extended and applied to all statutory periodic tenancies commencing after 6th April 2007, on the basis that a statutory periodic tenancy is a new tenancy, a landlord would need to ensure that the deposit is registered with a tenancy deposit scheme and the prescribed information served once a statutory periodic tenancy arises. The recent case of Gardiner –v- McCusker has confirmed this principle.

Briefly, the case involved a six month tenancy being entered into after the deposit legislation was in place. Whilst there were issues as to service of the prescribed information, for the purpose of this article, the important fact is that no prescribed information was served within 30 days of the statutory periodic tenancy arising. As such, the Court found that the subsequent Section 21 Notice served by the landlord was invalid and the landlord was ordered to pay a penalty to the tenancy to the tenants to the value of 2x the deposit.

From a lawyer’s point of view, the decision is not a surprise. Indeed, it was always likely to be a matter of time before the Court extended the Superstrike principle.

The case highlights the importance of ensuring that the deposit is re-registered (if the deposit scheme rules require) and a new set of prescribed information is served within 30 days of a statutory periodic tenancy arising.

Whilst a Bill is being processed through Parliament to amend the tenancy deposit legislation with a view to removing the requirement to re-register and address new prescribed information in these circumstances, this is still someway off becoming amended law (into next year at the earliest) and, indeed, there is no guarantee that it will see its way through all the stages to be passed as new law. In the meantime, all landlords should ensure that a diary management system is in place so that they do not allow for a 30 day period to pass from the start of a statutory periodic tenancy before taking action.