Private Landlords Beware
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According to the scheme, a tenants deposit must be registered
in an authorised scheme and the landlord is obliged to provide the
tenant with certain detailed information about how it is held.
Apparently if this is not done a landlord cannot serve a notice to quit
under section 21 of the Housing Act 1988. Further
if the tenancy is renewed the landlord must ensure the deposit remains
protected and must also update the tenant with all relevant
documentation regarding the same.
Landlords have long been under the incorrect impression that
tenancies commencing before 2007 were exempt from the scheme. A Court
of Appeals decision recently clarified
(Superstrike Ltd v Rodrigues) that this is
not the case.
Tenancies commencing prior to 2007
The COA ruled in this case that when the tenancy became
periodic, in effect it converted to a new tenancy and the deposit
should have been protected, because the deposit was not protected when
the landlord served a section 21 notice, this was declared invalid!
Tenancies expiring prior to 2007
In the COA case of Charalambous vs Ng,
the facts are as follow, the landlord had granted a tenancy in 2002, it
was renewed on two occasions and eventually ended in 2005
(well before 2007). The tenants subsequently remained in
the property and an implied statutory periodic tenancy arose. The
landlord served a section 21 notice in 2012 and the tenant went to
court to claim the notice was invalid based on the fact that the
deposit had not been protected as above, the county court dismissed the
tenants application but the COA agreed with the tenant!
The cases above make it clear that it is crucial
that a deposit is registered or re-paid to a tenant
before a section 21 notice can be served (regardless of whether the
deposit needed to be registered initially). It is advisable that
landlords review all deposits, should they wish to serve a section 21
notice and regain possession of a property!
Written by Rehana Ali
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