I was interested to see from the Pain Smith blog that there is a new Court of Appeal out on section 8 notices.
Here the Court allowed a section 8 notice where it was technically defective – as it did not set out the whole of the ground relied on.
This seems to be part of a growing trend in the courts, not to accept defences from tenants on technical drafting issues. The case of Spencer v. Taylor on section 21 notices is in a similar vein.
However landlords should still take care with their paperwork – even if the case does go your way eventually, you don’t really want the expense of a Court of Appeal hearing, do you?
Further, landlords don’t get it all their own way, as they have been hammered in the tenancy deposit cases. Witness the Superstrike case – where everyone (apart from tenants on the make) thinks the outcome is wrong but no-one can really do anything about it.
I have a post brewing on the tenancy deposit laws which I may let out soon …
I don’t think the Superstrike outcome is wrong Tessa, and neither do a number of other people.
s5 of 1988 Act has always said a periodic was a new tenancy. Difference now is under TDP a new tenancy means re-protection and re-issuing of PI.
Happy to be proved wrong by Supreme Court, but cannot see it going there as the decision in CoA is so legally correct – if inconvenient (to some!!)
I don’t think the new tenancy bit is wrong either. As you say, we have all known about this for years. I wrote about it here https://landlordlawblog.co.uk/2013/08/05/why-a-periodic-tenancy-is-a-new-tenancy/
What is wrong is forcing the landlord to keep re-serving the prescribed information, when it has already been served, and when nothing has changed, and making him liable to pay a substantial penalty to the tenant in default of doing this.
And how do you know nothing has changed Tessa?
And why would you need to keep on serving only once when it goes periodic unless it jumps in and out of fixed and periodic
If something has changed, thats different.
Or do you think it is right that someone should be ordered to pay not less than 1x the tenancy deposit for failing to serve a prescribed information notice on their tenant when nothing has changed since they served it six months before?
The whole problem with these regulations is that they were not properly thought out at the start.
It’s not up to me to think anything Tessa I’m not saying it is right or wrong my job is to advise clients. But all you have to do, like it or not, is press a few buttons for the Scheme (or not with DPS as the case may be) and then serve a two sided bit of paper.
To ask you a question instead what is so difficult about that for a pro that knows what they are doing?
It isn’t rocket science Tessa it is just systems and procedures and getting on with it instead of moaning about it which agents just still continue to do.
Why I do not know.
There is of course a simple answer – create a tenancy agreement that goes contractual periodic at the end of the initial fixed term. Then TDP doesn’t come into it because it isn’t a statutory periodic so provisions of s5 do not apply.
I suppose the real problem is that this came out of the blue and many landlords and agents now find themselves in a position where they are apparently in breach of the regulations and vulnerable to the penalty when they thought they were acting properly at the time.
But you may be right and it is all perfectly sensible.
What do other people think?
My tenancy agreements incidentially have provided for a contractual periodic for years – but not because I forsaw this problem!
I am a Landlord and the Industry Observer is not correct either. You may have to print off a two-sided bit of paper for the PI but you also have to serve with it the Terms and Conditions of the scheme which are another 2 sided bit of paper. Then you have complete the prescribe information, post everything to your tenants with proof of postage and a stamped addressed envelope. Let them complete their section, post it back to you so you can photocopy it and keep it as record it was served. Then re-post their copy back to them for their information. The tenants think it’s crazy and some of them have received the same information given to them 4 or more times because of a change of circumstance in the tenancy or tenants leave. The deposit schemes are to blame because they are refusing to take responsibility for the fact that a Landlord cannot remove a deposit by themselves and either the tenant has to agree or an adjudicator is involved. Either way the deposit remains with the same scheme and cannot go anywhere without agreement or Court paperwork.
It clearly is a ‘new tenancy’, but I find it wholly ridiculous to have to re-serve the information, as you say Tessa, when nothing has really changed. The Courts should concentrate more on the L/L’s (and often agents), who continue, 7 years on, to ignore the protection requirements in the first place.
If a penalty has to apply in this circumstance, it should certainly be applied fairly and be perhaps the simple return of the original deposit and not anything up to 3 times.
MMC
It may require a bit more paper but it is still easy enough to do.
Try including the PI in the tenancy agreement then you don’t need to worry about the later bits and receipts etc, which you don’t legally have to do anyway
Deposit Protection Schemes were brought in by the government for tenants. It’s a tenant scheme, all to help and benefit tenants. So why is it that Landlords have been lumped with the admin. DPS is an online scheme, great! keep it online and go paperless. Why should a Landlord be fined once the money is protected in the scheme and the all the terms and conditions of the scheme are online. The Prescribed Information has been built up as something extraordinary but it’s just contact details which are written into a tenancy anyway and what clauses apply to the deposit. Why are the fines so punitive for that?
Not everyone writes all the PI details in their tenancy agreement, and a separate version is needed anyway for periodics or if you take over an existing property from a Landlord or another agent, especially if you use a different Scheme than where the money has already been lodged or insured.
Prescribed Information is just as important, if not more important, than the money, as stated in both Suurpere v Ayannuga (July 2011) and Ayannuga v Swindels (Nov 2012) – correct dates I think both may be a year earlier.
If it is in the agreement hardly any hassle first time round or on a renewal. Just bits of paper to issue if it goes periodic.
Suurpere especially clearly stated that it was not good enough pointing the tenant to where they can find the T&Cs – they must actually be served them.
The reasons the landlord has to do it and gets the fine if he doesn’t are of course because that is what the Statute demands.
Do you make tenants responsible for renewing the gas safety redord? No? Then why make the tenant responsible for anything to do with the deposit?
Tessa I think a lot of the problem stems from the fact that the law got changed over the 14 day issue. If you looked at the original regs they were reasonable in that they fitted together in a sensible way.
The purpose of the legislation was to ensure that the tenant got their money back when they were due it back. This is why it was always CORRECT that if you protected the deposit on day 15 or later, it did not matter, the tenants money was protected. The draftsman was very careful to avoid the paragraphs dealing with when compliance happened in dealing with the penalties. If by 20 you had lost the money and not protected it then of course you should be liable to a penalty.
The changes they made in the Localism Act were an unmitigated disaster. We did predict the statutory periodic problem and changed our agreements in 2010 to avoid it. We warned of it in our Localism Act courses at the beginning of 2012 (and warned of those deposits taken before April 2007 needed protecting too).
This has got massively more serious and a “parallel” example should show why.
Under the rules pre localism
Tenant stays in your property for 6 years on 6 monthly renewals. The landlord is the worst sort who simply does not care and does nothing. however the tenant does not know his rights and only takes his landlord to task after move out when he gets no deposit back. Of to court, deposit refund and penalty of three times the deposit.
Rules post localism
Same situation, tenant goes to court and is awarded up to 36 times the deposit!
Now for a flagrant ignoring of the law this sounds reasonable. However, what if nothing as done simply out of ignorance or because the landlord thought he was resident under the Housing Act 1988 (therefore could not issue an AST) and a court decides he is not resident, therefore making all his agreements AST. Surely if the tenant gets his money back, he suffered no harm and there should be no penalty (this is after all a civil issue not a criminal one, like a section 21 notice, there is no “fine” for getting the date wrong there).
I know government have said they will amend the legislation but it worries me, to what they will change it! The last change was a real mess.
If I could have one change it would be that if the tenant gets their deposit back, end of. The purpose of the legislation has been achieve. This would stop tenants claiming for each tenancy they have had. (It is not clear from what I read but I think in the Gardner v McCusker case they could have claimed two penalties but may not have done so, meaning they might not have realised the potential to do so. Whilst they are considering a legal change, we should all be campaigning to the a “full refund kills claims” rule and redress the terrible balance that currently exists.
You don’t think it is terrible? You walk out of the property having moved the tenant in and get hit by a bus. 6 weeks you wake from your coma and rush to protect the deposit. The judge has to award a penalty of at least one times the deposit even in a reasonable situation. In Scotland the penalty is “up to 3 times” and this makes it much more risky for no win no fee companies as they are not guaranteed any penalty. The judge may agree something was missing from the PI or that the deposit was protected 2 days late, but decide not to give a penalty.
It is about time landlords united to tell the government what a mess has been made of a reasonable system. The only thing that was clearly wrong with the old rules was not the wording of the rules, but the silly decision of Gladehurst v Hashemi where the tenant lost because he represented himself.
Tessa,
I agree, (nearly) everyone thinks this is wrong.
The people falling foul of this are not the criminal landlords that it was intended to stop (they have long since found ways round it).
The solution, I believe, is to change the 1-3 times penalty to ‘up to 3 times’.
Judges then have discretion to award from a nominal sum up to (potentially) 36 times the deposit.
@HB Welcome
I think you need to rephrase to “nearly all Landlords think this is wrong”
Had the penalties been meant to deter “criminal landlords” (whoever they are and whatever that may mean) the penalties would have been much harsher, and stayed mandatory not made discretionary.
What ways have they “found round it” – that are legal and fool proof?