This is the second part of a series of posts looking at some of the housing related changes being brought in by the Deregulation Act 2015.
Part 2. Periodic Tenancies and Prescribed Information
Last time I looked at the Superstrike case and how this affected landlords who took deposits for tenancies which started before 6 April 2007 but where the subsequent periodic tenancy started after that date.
However the Superstrike decision had a far greater effect.
If the Superstrike case held that the regulations took effect when the tenancy changed from a fixed term tenancy to a periodic one – then this would affect ALL tenancies – including those which started after April 2007 and where the deposit has been properly dealt with at the start.
We therefore had the unhappy situation where thousands of landlords, who had acted entirely properly, found themselves to be in breach.
Not for failing to protect the deposit – as the schemes generally provided that the protection would continue from one tenancy to another – but for not re-serving the prescribed information.
So we had the ridiculous situation where landlords were being forced to re-serve identical notices and were being penalised for not having done so – even though they had followed the advice prevalent at the time and their tenants had not been prejudiced in the slightest.
This was massively unfair. However thankfully this is now at an end.
How the Deregulation Act 2015 deals with these issues
The Deregulation Act (which in this respect came into force on 26 March 2015 – the day the Royal Assent was given) now provides that if the deposit was protected and the prescribed information served during the original fixed term, the landlord will be deemed to have complied with these requirements in respect of subsequent fixed term of periodic tenancies, provided:
- The landlord & tenant are the same and
- The premises are the same.
So for example, if tenant A is replaced by Tenant B, you will need to re-protect the deposit and re-serve the prescribed information.
In conclusion
This reform is much needed and all landlords will heave a huge sigh of relief.
Many tenants have been unjustly enriched by bringing claims against their hapless landlords for the penalty or have defeated possession claims when the landlord would otherwise have been (apart from the rule from the Superstrike decision) in the right.
Next time I will be looking at past and ongoing court cases.
Colin Lunt says
April 8, 2015 at 3:20 PMNot sure if you were intending to write anything on the retaliatory eviction changes or not but a Commencement Order was made on 27 March for them to come into force on 1 October 2015
Industry Observer says
April 9, 2015 at 7:51 AMDate in first line should read 6th April 2007.
The statement “…. if the deposit was protected and the prescribed information served during the original fixed term,….” is presumably referring to what DR2015 calls “deemed compliance”
To achieve deemed compliance surely the initial requirements must have been met within the first 30 days (or 14 days if pre Localism Act). Far as I am aware it is only those cases that if all remains the same on going periodic or being renewed are going to be deemed ‘comply initially and you have always complied’
If you have not complied initially then you do not get the ‘once done always done’ exemption and of course if not initially compliant within 30 days are always open to a s213 claim no matter what you do later?
DR2015 is not some universal panacea for post 2007 ‘sins’ which if committed and not absolved under the Localism Act 30 day amnesty remain committed and liable to a s213 claim and s214 and 215 penalties. Yes you can comply late and serve a s21 you always could, but the penalties if you do still apply.
There is no post 2007 amnesty courtesy of the Dereg act, just no need to re-serve PI etc if you have done it correctly in the first place. Any link or mention in same breath between Superstrike and deposit taken post 2007 will lead to confusion. The 90 day amnesty does not in any way apply to deposits taken post 2007
Tessa Shepperson says
April 9, 2015 at 8:29 AMThanks for pointing out the date issue, which I have amended.
This post does not cover the 90 day scenario – as you say, this just applies to the older pre April 2007 deposits. This is covered in the earlier post here https://landlordlawblog.co.uk/2015/04/07/the-deregulation-act-2015-explained-1-old-tenancy-deposits/
Romain says
April 11, 2015 at 1:34 PM“If you have not complied initially then you do not get the ‘once done always done’ exemption and of course if not initially compliant within 30 days are always open to a s213 claim no matter what you do later?”
You are open to a claim in relation to the tenancy for which you did not comply. However, as it was already the case, if you then comply when a new tenancy is created then you are good for that new tenancy.
As for the deemed compliance created by section 215B, I would be a little cautious: It states that the deposit must continue to be held in accordance with the scheme.
So, to me that means that if the scheme requires you to re-protect (or anything else) and you don’t then there is no deemed compliance. The situation is as it was before.
Gill says
April 12, 2015 at 1:38 PMDoes this act also apply to Wales? Thanks
Stuart Jackson says
April 19, 2015 at 4:15 PMHi Tessa,
Could you clarify the rules on re-protecting deposits and serving prescribed information if only part of the periodic tenancy information changes.
For example, the original tenant remains at the property, but a second tenant joins them when a new fixed term AST is issued at the end of the original term.
Would this require the deposit to be re-secured and PI re-issued?
Many thanks
Stuart
Tessa Shepperson says
April 19, 2015 at 4:19 PM@Gill Yes
@Stuart – Yes you will as the prescribed information will have changed. If there is a new tenant you will need to inform the deposit people and you may also want to do a new inventory. So the situation is not the same as when the same tenants remain in occupation.
Stuart Jackson says
April 20, 2015 at 10:09 AMThanks Tessa – thought as much!
Industry Observer says
April 19, 2015 at 8:14 PMTessa don’t think your answer to Gill is 100% correct. My understanding is not all of it applies
Industry Observer says
April 19, 2015 at 8:16 PMTessa and Stuart
What do you reckon if the property is sold to a new Landlord?
Or the Landlord swaps from one agent to another?
Devil in the detail as usual !!
Stuart Jackson says
April 20, 2015 at 10:07 AMIf the property changes hands, a new AST would need to be issued anyway, so to me there is no change here.
If the landlord swaps agents, the deposit would usually be transferred if the agent holds it, so new certificates and PI would be served as standard, so no change here.
Industry Observer says
April 20, 2015 at 12:36 PM@ Stuart
A new AST does not need to be issued on transfer of title, the new LL talkes with knowledge of the tenant and is bound by the existing agreement. The answer is safest to do TDP compliance again as one of the s34 exemptions no longer applies – it is not the same Landlord.
@Gill and Tessa
Only sections 30 – 33 apply in Wales, as and when enacted ss33-41 will not apply in Wales (unless it is changed again) because of how Welsh housing Law is diverging from England. In time there will be no AST as we know it in Wales.
Industry Observer says
April 20, 2015 at 12:38 PMStuart
In fact thinking more on it if you issued a new AST because you had bought the property (assuming tenant agrees) then it is a replacement tenancy and normally exempted (if already compliant) but because the Landlord has changed re-complying with TDP would be critical.
James says
June 3, 2015 at 5:11 PMWhat if the prescribed information wasn’t served last year before the deregulation and the case went to court and the tenant won? Does this mean, despite the deregulation, that the tenant can claim the non-compliance compensation against that earlier failure to serve the Prescribed Information last year – even if the landlord has subsequently served it this year?