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Tenancy Deposit Scheme

On 14th June 2013 the decision in the matter of Superstrike Limited –v- Marino Rodriques was handed down by the Court of Appeal. The decision clarifies the situation in relation to tenant’s deposits, in particular deposits taken for an Assured Shorthold Tenancy before the 6th April 2007 and where the tenancy continues after the term as a Statutory Periodic Tenancy (SPT).

This judgment has confirmed that an SPT is a new and distinct tenancy thus brining the tenant's deposit within the ambit of the provisions of the Housing Act 2004. The deposit should have been placed into a Tenancy Deposit Scheme within 21 days of the SPT coming into force.

The options available to landlords who find themselves in the situation where the fixed term of the tenancy has expired and the tenancy continues under a new SPT, is to either: 

  • return the deposit, which would remove the risk of a future Section 21 Notice being invalid although exposes the landlord to the risk of having to fund damage to the property once the tenant leaves; 
  • protect the deposit by placing the deposit on the Tenancy Deposit Scheme as soon as possible, although this may still leave the landlord open to financial sanctions; or 
  • do nothing and wait and see. The latter may expose the landlord to being unable to serve a valid Section 21 Notice and may expose him to the risk of the financial sanction of three times the deposit.
Posted on 01/07/2013 by Pam Bowring

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