The long awaited Deregulation Act received Royal Assent on Thursday 26 March 2015 and provides an immediate amendment of the law in relation to tenancy deposits. These changes are very welcome for landlords following the flurry of cases following Superstrike v Rodrigues.
The Superstrike amendments:
- If the deposit was received before 06 April 2007 and went period before 06 April 2007
The position set out in Charalambous v Ng continues to apply.
- If the deposit was received before 06 April 2007 but was renewed or went periodic after 06 April 2007
If the deposit has not been protected, the landlord now has a period of 90 days from 26 March 2015 (or before the Court hearing to determine a tenant claim for compensation or to determine the landlord’s claim for possession under s.21, whichever is the earlier) to protect the deposit and serve the prescribed information.
- If the deposit was received after 06 April 2007
If the deposit has been protected and the prescribed information served at the outset, provided the deposit remains the same with the same scheme, the landlord will be treated as if he/she has complied. There is no need to re-protect the deposit and/or re-serve the prescribed information on renewal or roll over into a period tenancy.
If the deposit has not been protected at all, the Act doesn’t change the landlord’s liability.
Other Tenancy Amendments
The Act also provides many other amendments not only relating to landlord and tenant law. For our readership, the following are important:
- Section 30 clarifies PainSmith’s view (see our blog here) that an agent can sign and serve the prescribed information on behalf of the landlord. The section amends The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 to make this explicit without the need to refer to the primary legislation. All references to “the landlord” within the Order have been amended to read “either the landlord or a person who acts on the landlord’s behalf in relation to the tenancy”.
- Section 35 of the Act removes the requirement from s.21(4)(a) for the date of expiry of such a notice to be the last day of a period of the tenancy.
- Section 36(2) provides that a s.21 notice cannot be given during the first 4 months of a tenant’s occupation under a tenancy agreement. This gives the tenant the same 6 month security of tenure but makes timing of the notice trickier where possession is required at the end of a 6 month term.
- Section 36 also provides that a s.21 notice will only have a shelf life of 6 months after which possession proceedings cannot be issued on the notice. This is contrary to the previous approach that the Courts were taking that a s.21 notice could be relied on until it was waived.
- Section 37 allows the Secretary of State to require landlords to use prescribed forms for s.21 notices. There is currently no prescribed form but Section 37 leaves it open that this might change.
- Section 40 requires a daily apportionment of rent to be paid back to the tenant in the event that the tenant has paid rent in advance but a s.21 notice is subsequently served requiring the tenant to give up possession of the property during the period that the rent payment covers.
The Act also contains provisions to prevent the retaliatory eviction of tenants following orders being made by the local authority relating to disrepair at rental properties. The provisions are set out in Section 33 of the Deregulation Act but they are not yet in force. Watch this space for further details on the enactment of these amendments, which is expected to be towards the end of this year.