More Problems for Landlords – Gas Safety

You may remember that from 1st October 2015 landlords of ASTs have had to give certain documents – Energy Performance certificates, Gas Safety certificates (if the premises have gas appliances) and the Government’s leaflet How to rent– to their new tenants and unless they do then they cannot serve a s21 Notice bringing the tenancy to an end.

The legislation is here – s21A Housing Act 1988, AST Notices etc regls 2015 (r2), AST Notices etc regls 2015 (r3), Energy Performance etc Regls 2012, and the Gas Safety etc regls 1998. 

The important part is in s21A Housing Act 1988:

(1)A notice under subsection (1) or (4) of section 21 may not be given in relation to an assured shorthold tenancy of a dwelling-house in England at a time when the landlord is in breach of a prescribed requirement.

Now, as far as the How to rent leaflet is concerned, if the landlord omitted to hand it out when the tenant moved in, all they had to do to correct things was to serve it late, and then they could serve a s21 Notice without any problems. In fact, as the form of the leaflet changes from time to time it is probably as well to re-serve it before a s21 Notce in any event –  see my piece on it here.

Many people thought that the same rule applied to the enargy and gas certificates, although there were rumblings from some commentators that this might not be right, and it might be a once-and-for-all  requirement. The others however pointed out that this might mean that if a landlord was a day or two late in serving the certificates they would lose the right to serve a s21 notice for all time – and theoretically the tenant could stay put for ever, provided that they kept paying the rent and keeping the terms of the tenancy. Although this is the normal state of affairs for an Assured Tenancy it wasn’t for an Assured Shorthold Tenancy, and can’t be what the government intended.

Those taking the more relaxed view pointed out that the AST Notices etc Regls say in respect of the gas regulations that

(2) For the purposes of section 21A of the Act, the requirement prescribed by paragraph (1)(b) is limited to the requirement on a landlord to give a copy of the relevant record to the tenant and the 28 day period for compliance with that requirement does not apply.

So all will be well.

Not so, according at any rate to HHJ Jan Luba QC , sitting in the Central London County Court on 2nd February 2018 on a appeal from DJ Bloom in the case of Caridon Property v Mony Schooltz (unreported as yet).  He pointed out that the specific reference in the Gas regulations to 28 days is for checks carried out after the commencement of the tenancy:

(6) Notwithstanding paragraph (5) above, every landlord shall ensure that—

(a)a copy of the record made pursuant to the requirements of paragraph (3)(c) above is given to each existing tenant of premises to which the record relates within 28 days of the date of the check; and

(b)a copy of the last record made in respect of each appliance or flue is given to any new tenant of premises to which the record relates before that tenant occupies those premises save that, in respect of a tenant whose right to occupy those premises is for a period not exceeding 28 days, a copy of the record may instead be prominently displayed within those premises.

So every new tenant has to be given a copy of the latest certifcate before they move in.

A landlord who doesn’t do this is in breach of the requirement and will always be in breach of the requirement and so is for ever barred from serving a s21 notice in respect of that tenancy. HHJ Luba was a prominent housing QC before his appointment and his view is likely to be widely respected, although technically it isn’t binding on anybody outside the Central London County Court.

Now, it is clearly a good idea to keep tenants safe from faulty gas fittings, but this can’t be what the minister meant when he made the regulations in 2015. What is more, the same argument can be applied to the energy performance certificates, because the 2012 regulations say

(2) The relevant person shall make available free of charge a valid energy performance certificate to any prospective buyer or tenant—

(a)at the earliest opportunity; and

(b)in any event no later than whichever is the earlier of—

(i)in the case of a person who requests information about the building, the time at which the relevant person first makes available any information in writing about the building to the person; or

(ii)in the case of a person who makes a request to view the building, the time at which the person views the building.

(5) The relevant person must ensure that a valid energy performance certificate has been given free of charge to the person who ultimately becomes the buyer or tenant.

So if they don’t do this then the landlord is in breach of the 2015 regulations and no s21 notice for him. Note the deadline for the certificate – no later than the first viewing.

Matters may get worse, because the 2015 regulations only apply to tenancies that start on or after 1st October 2015 at present. They will apply to all ASTs from 1st October 2018, so tenancies going back to possibly 1998 may be covered.

It is Superstrike all over again – see my piece here for a reminder of that fiasco.

There are only two good points to cling on to

  • this only applies to ASTs in England, because the 2015 regulations don’t apply to Wales, and Scottish tenancy law is quite different;
  • after the Superstrike fiasco surely the Minister will make some corrective regulations without undue delay.

But who knows. At any rate it will make the housing lists in the busy County Courts even more fraught than usual. Keep your fingers crossed.

[That said, there is a quite respectable case for abolishing s21 notices entirely and requiring landlords to justify regaining possession to a judge or other tribunal. But if this is going to happen it ought to be brought in intentionally, and with warning and safeguards, not by accident like this.]

For more on this see the ever excellent Nearly Legal or Tessa Shepperson’s Landlord Law.


All Change – s8 Notices, Superstrike and more

As I’ve mentioned before, the bane of writing these pieces is that no sooner have you written about something than they go and change it so you have to update things. I’ve been a bit slow off the mark this time, so all the spadework has been done by others, and all I hope to do is to point to their pristine furrows, and invite you to admire. In practice it may be a bit more complicated – it always is.

s8 Notices

These are the notices that you have to serve if you are a landlord to an Assured or Assured Shorthold Tenancy and want to bring it to an end prematurely, usually because the rent isn’t being paid, or the tenants are being antisocial, but there are lots of other possible reasons – grounds 1-17 + 7A, 14A and 14ZA of the Act* set them out.

Strictly speaking the notice is Form 3 under the Housing Act 1988* section 8 as amended by section 151 of the Housing Act 1996 and section 97 of the Anti-Social Behaviour, Crime and Policing Act 2014 but I’ll continue to use s8 Notice in the interests of saving my fingers.

The important thing is that the form of notice is prescribed, and the form of the notice has been (slightly) amended from 6.4.15, in this case by the Assured Tenancies and Agricultural Occupiers (Forms) (England) Regulations 2015 No 620 (different forms apply in Wales, it appears). So if you don’t use the right one the notice is ineffective and you’ll probably have to start the court proceedings all over again. You will certainly be returning to go without the court fee if you are using the most popular ground – Ground 8 (2 months’ arrears of rent) – because the court isn’t allowed to dispense with service of the notice in that case (see s8(5) HA 88).

There are also changes to some lesser-known forms such as a s13 form that allows a landlord to increase the rent.

So make sure that you use the right up-to-date form, or if you are a tenant or advising one, that the landlord has got it right.

There is more information on Tessa Shepperson’s useful blog and the forms themselves are in the Stat Ins and elsewhere. Do be careful – the last time that I looked several sites, including the government site still had the old invalid ones. The new forms have a note about ground 7A after section 5.

s21 Notices

These haven’t been changed. But do remember that you rarely need to use the s21(4) notice for periodical tenancies any more – the s21(1) fixed term notice is valid for all tenancies provided that they started off as a fixed term tenancy, as they nearly always do. This is all courtesy of Spencer v Taylor – more on this here.

Superstrike and AST Deposits

Deposits taken by landlords and their agents in relation to Assured Shorthold Tenencies have to be protected in one of the deposit protection schemes. However, what happens when the initial 6/12 month term expires and the tenancy goes over to being periodic? Surely you don’t need to protect it/serve all the notices all over again! Oh yes you do – courtesy of the CA in Superstrike v Rodrigues. This decision in 2013 made logical sense but no sense in the real world and we have been waiting for ages for it to be overturned by legislation.

Well, the time has come at last, and a clause or two have been slipped into the Deregulation Act 2015 to put us back to basically where we thought we were beforehand. Hence:

  •  s215A For deposits received before 6th April 2007 (when the original legislation had come into effect) provided the deposits are protected and the appropriate notices served by 23rd June 2015, or before any possession proceedings are started, they are deemed to have been properly protected.
  • s215B For deposits received on or after 6th April 2007 provided the deposit has been protected and the appropriate notices served for the fixed term, they don’t need to be repeated for any periodic tenancy that replaces it. It doesn’t matter if it is a statutory or contractual tenancy, but the landlord and tenant must be the same,  and the premises must be substantially the same, and the tenancy must come into being on the coming to an end of he original tenancy. And the section is treated as having had effect since 6th April 2007.

There are transitional provisions for claims by tenants for penalties under s214 or landlords for possession under s21. Basically, if the claims have been settled or finally determined (ie time for appealing expired) they are final, but if not the court will apply the new law from 26th March 2015, and the landlord will probably win. However, he won’t be allowed to recover any costs from the tenant it he has to rely on these provisions.

And finally, some bad drafting about notices giving agents’ details has been tidied up, so that agents can give their details or the landlords details if they wish. And the same transitional provisions apply for claims that have arisen because of this.

This is only a brief summary. For the exact wording go to ss30-32 Deregulation Act 2015 and for a more detailed explanation go to Tessa Shepperson’s blog where she breaks things up into digestible chunks.

This ought to sort things out, but it’s a complicated area and I have a feeling there may be some more problems in store. There is no excuse, however, for any landlords who haven’t protected and notified deposits taken before 6th March 2007: get things organised by 23rd June 2015 or have the sky fall on you!

More to come

I will leave the even more complicated bits in the Deregulation Act restricting retalitory evictions and changing the rules on s21 notices until another time. They only apply to fixed term ASTs that were granted on or after 1st October 2015, or periodic ASTs that immediately followed on from such tenancies. Until, that is 1st October 2018, when they will apply to all ASTs, whenever granted. So I’ve a little time to spare.


Spencer v Taylor – Good News for Landlords

Spencer v Taylor [2013]EWCA Civ 1600

This piece is a bit late, as the judgement was given before Christmas. But I’ve been busy, and there has been a lot of Mitchell-related nonsense going on.

We need to go back a bit. In the old days, before the new legislation there was very little private rented accommodation about, because the rents were controlled and it was virtually impossible to get tenants out even if they weren’t paying the rent. Then the new assured tenancies arrived and rent controls were relaxed, and it became possible to recover possession if there was a good reason, especially if the rent got seriously into arrears.

But landlords were still reluctant to commit themselves to possibly a lifetime of commitment, if their idea of a good reason differed from the judge’s. The mandatory orders under Ground 8 for tenants who were 2 months in arrears of rent were a start. However, what they wanted was the certainty of getting the property back if they wanted to. And this was where s 21 Housing Act 1988 came in. Because if a landlord served a s 21 notice and got the procedure right the Judge would have to make an order for possession in 14 days (or no later than 6  weeks if there would otherwise be serious hardship). There was no discretion.

And there was no fancy form of notice – they just had to give 2 months’ notice in writing.

Well, as you might imagine, landlords liked this, and the supply of properties to let increased rapidly. Perhaps I ought to say before you complain, that I realise that there were no doubt other reasons for this as well – the difficulties in getting a mortgage and the reductions in benefits and the economy generally for a start.

However, things are never simple. s 21 was drafted when ASTs were in their infancy and the draughtsmen didn’t realise that virtually all ASTs would run for 6 months as a fixed term, and then run on as periodic normally monthly tenancies thereafter. It would appear that they expected them to be either entirely fixed term, being brought to a prompt end at the end of the term, or to be periodic from the outset. And in the neat way that draughtsmen have they gave two forms of notice that had to be given – one for fixed terms and one for periodic terms.

The fixed term notice has given no difficulty. What is needed under s 21(1) is

  • a notice in writing signed by the landlord (or at least one of joint landlords)
  • requiring possession in not less than 2 months
  • expiring after the end of the fixed term

Hard to go wrong here, provided you can prove that the notice was actually given. The periodic notice however was much more complicated in practice. Under s 21(4) you needed

  • a notice in writing signed by the landlord (or at least one of joint landlords)
  • stating that after a date given possession is required under this section
  • the date must be at least 2 months after service
  • and must be the last day of a period of the tenancy
  • and must be no earlier than the earliest that the tenancy could have been brought to an end by a Notice to Quit if these were not invalidated by s 5(1). [in practice this wasn’t a problem as this was almost always less then 2 months].

The problem was getting the day right. A monthly tenancy starting on the 5th ends on the 4th of the next month and it’s the 4th that you have to give, or it’s invalid. Lots of scope for getting it wrong, and having to start again, even, sometimes,  if you had a saving clause. And as almost every AST was terminated when it was a periodic tenancy the established wisdom was that you had to use this form. So it mattered.

But no more. Lewison LJ in the Court of Appeal (who was an eminent landlord and tenant counsel in his day) decided to cut through the wreckage and simplify things. He noticed that s 21(1) applied

on or after the coming to an end of an assured shorthold tenancy which was a fixed term tenancy

Now this tenancy had been a fixed term tenancy at the outset, in 2006, but had been periodic ever since the initial 6 months expired. The notice that had been served in 2011 was the s21(4) periodic one and it was arguable that the date selected was incorrect (the saving clause was not as clear as it should be). So the parties went to the CA presumably expecting to argue about the saving clause. And Lewison LJ decided that even if it was an invalid s 21 (4) notice it was a perfectly valid s 21(1) notice. It ticked all the boxes – it was signed, required possession in not less than 2 months, and it expired after the end of the fixed term. So all the arguments about s 21(4) just didn’t matter. And the famous 2003 CA decision of Fernandez v McDonald , which said that the correct date was vital, was strictly speaking irrelevant as the court only dealt with a s 21(4) notice.

For completeness I ought to say that Lewison LJ went on to find that the notice would have been valid under s 21(4) as well, but that is beside the point. Because NOBODY IS GOING TO USE s 21(4) NOTICES AGAIN.

You don’t need to. Unless your AST has NEVER been a fixed one, which is extremely unusual, and indeed this is another reason to avoid that arrangement, s 21(1) notices may be used in every case. Because the CA have said so in Spencer v Taylor. They are just so much easier. And although I will for one be unhappy to see s 21(4) go as it has been good to me in producing reasons to be given work by landlords, opportunities of earning fees in sorting out messes that landlords (and some non-specialist lawyers) have got into, and unexpected get-out-of-jail-free cards for my tenant clients, it must be for the best.

However, if you are a landlord, or acting for a landlord, do remember that before serving any sort of s 21 notice you have to be sure that any deposit has been properly protected, the appropriate notices etc served, and re-served as required by Superstrike v Rodrigues   (& see my further comments here) after the fixed period has expired. Or any s 21 notice is invalid and you’re in trouble.


I have just heard that the tenant has applied for permission to appeal to the Supreme Court, so things are still in the air. Anthony Gold are representing the landlord and have more info here. So until this is finally decided it is best to continue using the s 21(4) notice if the notice is served after the fixed term has expired (the “established wisdom” referred to above) just in case the SC don’t agree with Lewison LJ. Which will be a pity.

PS – Leave to appeal refused 24th July 2014. See my note. So the useful decision stands.

August 2013

Traditionally a quiet time of year. And looking at my blog, Twitter feed, emails and the world in general, it has been really. Just a few nuggets to comment on.


Still more fallout from the surprising decision that AST landlords need to re-serve the deposit-protection information at the beginning of the second (periodic) tenancy as well as at the beginning of the first (usually fixed) tenancy. The protection agencies have washed their hands of the problem, saying they can’t do anything, and even the housing minister Mark Prisk has admitted that it wasn’t what was intended and was a mess (here on the Landlord-Law Blog ) He hints there might be legislation, but don’t hold your breath.


Not a housing or landlord matter, but an interesting example of the power and speed of modern media. Not only was the journalist’s friend and his detention (on 18th August) highlighted by the immediate media storm (largely on Twitter) but as I type this (20th August) his lawyer’s protocol letter has been published on Twitter more or less at the same time as it was sent, with requests for urgent response by 12.00 tomorrow. The legal argument seems to be whether there was power under the little-known Sch7 Terrorism Act 2000 to interrogate him and seize his belongings, in which case the power might be excessive, or whether there was no power to do so, in which case he should not have been held and has a claim for his detention. Neither are entirely satisfactory results. Too many references to give a lead – best Twitter comments by @JackofKent.

Richard III

An unusual litigant, in the person of some distant cousins, claiming Judicial Review of the decision to rebury his remains in Leicester Cathedral rather than elsewhere, such as in York which he might have preferred. Amazing decision from Haddon-Cave J on Permission to apply granted, much to Leicester Uni and Cathedral’s annoyance. And everybody’s considerable expense. Apparently one in six of us are indirect descendants of Richard III.


Yes, that sort of distress – by a landlord on a business tenant. The new rules on executions generally envisaged by the Tribunals, Courts and Enforcements Act 2007 look like they may at last be brought into effect from 6th April 2014. The regulations (Taking Control of Goods Regls 2013/1894) will replace all the old law for seizure by HCEOs, Court Bailiffs and private bailiffs. They are long and complicated and will be followed by two more sets, covering the costs and fees, and the certification regime, but broadly are much the same as the present, with distress (now called TCofG) being limited to business premises, and for rent and by certificated bailiffs only.

Part-Time Judicial Pensions

Following the success of a former Recorder who said that he was entitled to a pro-rata pension with the full-time judiciary, and who won in the SC in February (O’Brien v MoJ) the ET has now assessed how this is to be calculated, and so the case, that started in 2005, may be coming towards an end. Summary in Law Society Gazette

HS2 Report

Living where I do I have a lot of interest in the proposed new line, which will pass a few miles from my door, and which may halve the train services from my local stations, without giving any benefit to me, or my region, at all. The cost is distressing, and having risen from some £33bn to some £42bn in the last few months it is even more upsetting to see a report that increases the likely cost to the region of £80bn, and confirm that it will lose money and achieve little. Perhaps somebody will see sense. Summary here

Website and Publicity

I’ve spent some time recently working on our new website and in generating publicity for my firm. It all takes an age, but it’s the only way forward. Link here  That’s the place to go for real lawyering, as opposed to this page of comment and speculation.

So I’m now looking forward to my holidays, and I’ll be back with you in September.

Superstrike – Guidance from the Deposit Holders

A few weeks ago the CA decided the Superstrike case (Superstrike v Rodrigues [2013] EWCA Civ 669) and held, to most parties’ horror, that not only did the Deposit Protection legislation apply to deposits received before the relevant Act came into force, but also did so in terms that mean that most AST landlords are in breach of the legislation and so liable to pay their tenants penalties of up to three times their deposits and can’t serve valid s21 Notices. Commentators had been hinting that this might be the case, but they rather assumed the courts would see a way round the poorly-drafted legislation. Sadly it was not to be.

The problem is that s5 Housing Act 1988 says that at the expiry of a fixed term AST tenancy a new periodic tenancy arises

“by virtue of this section”.

Thus it is not a continuation of the old fixed term tenancy, but a new tenancy. Hence any deposit that has already been received for the fixed term tenancy has to be transferred over to the new tenancy, or it couldn’t be used to pay arrears etc. This might in a few cases take place formally, with an exchange of cheques  but in 99% of cases there is nothing like this, and the parties do nothing active at all. However Lloyd LJ decided in Superstrike that, as a matter of law, this is what happened, and that the landlord accordingly “received” the deposit again. This activated the requirement to protect it, to serve the appropriate notices on the tenant within 30 days, and triggered the penalties for not doing so, namely irrefutable claims for up to 3 times the deposit, and the inability to serve s21 notices until the deposit had been repaid in full. It was part of the essential part of the decision in Superstrike, the ratio decidendi, and so binding on all lower courts, even though the facts of the cases may differ in parts.

I wrote about this at the time (see Coventry View 20.6.13) and suggested a few possible ways round this. Well one of them, Guidance from the Deposit Takers, has just arrived. And it is a damp squib, or wet hen, or chocolate teapot. It is to be found at

Unfortunately the DTs feel unable to provide any advice and certainly not any answers. They just set out the various options and then suggest interested parties take their own legal advice. So we’re really none the wiser. It may be that the DT could do little else, given their lack of formal powers in this area. But it takes us no further forward at all.

The present position can’t be the result that anybody wanted. But we could be stuck with it for some time, as I have heard no hint of anybody appealing Superstrike to the Supreme Court.

My opinion?

  • For all new tenancies, if you are taking deposits, make sure that the scheme you use continues to protect the deposit once the periodic tenancy kicks in, and then serve the documentation again. But you may do better to insure or have a guarantor.
  • For existing tenancies where the deposit is protected either serve the documentation again (risking a claim by the tenant as it will be out of time) or ignore it and hope for the best. Most tenancies after all end with an amicable departure. And if you want to serve a s21 notice return the deposit first.
  • If the deposit isn’t protected then protect it asap, as this should reduce the amount of penalty that you have to pay – the courts can award between one and three times the deposit, and will take this into account.

But really, this is no way to run a village fete, let alone a country.

Keep up at the Back – more changes in leasehold forms

One of the things I like about Landlord and Tenant law is that it’s never dull. Or rather, if it is dull then it won’t be for long, because somebody is going to change it. Often immediately, and sometimes with retrospective effect.

This is what happened with the recent case on the protection of tenants’ deposits – Superstrike v Rodrigues [2013]EWCA Civ  669 –  [my piece from 20.6.13]. The law, as it had been understood since 2007 was changed in the stroke of a key and with retrospective effect back to 2007, leaving thousands of landlords open to claims for penalties from their former tenants for failing to re-notify them that their deposits had been protected when the initial fixed term tenancy expired and the periodic tenancies began. Unless of course the Supreme Court decides that it hasn’t changed at all, or the CA decides that on reflection the decision didn’t mean quite what it looks like it means as at today. We shall see.

Well the law has been changed again, although not quite to quickly – we were warned on 29.4.13 and the change takes place from 1.7.13 onwards. However the consequences could still be messy as it has hardly been the subject of wall-to-wall publicity.

It concerns service charges and administrative charges for residential properties let on long leases. Demands for these have (by s153 of the Commonhold and Leasehold Reform Act 2002) to be accompanied by a summary of the tenant’s rights and obligations. If not then the monies demanded are not due and can be withheld. The summary is prescribed in some detail in the statutory instrument down to the size of the print (not less than 10 point). The summaries are slightly different for service charges and for administrative charges. And they set out in a number of places the powers that the Leasehold Valuation Tribunal has to decide on disputed service charges, approve works, determine breaches and so on. All good useful stuff, although in all fairness they could have a bit more detail here and there.

Well, you are a bright lot and have an interest in this sort of thing, so you probably know that the Leasehold Valuation Tribunal, together with a number of other land-related bodies such as the Agricultural Lands Tribunal and the Adjudicator of HM Land Registry are being amalgamated into the new First-tier Tribunal (Property Chamber) with effect from 1.7.13. Only for England (not Wales) in relation to the LVT and the ALT, although the Adjudicator is being abolished entirely, and won’t be able to continue in exile in the valleys.

There has been quite a lot of publicity given to the new rules which will apply to the FTT(PC)  – the snappily-titled Tribunal Procedure (First-tier Tribunal (Property Chamber)) Rules 2013/1169 – which will be much more like the CPR that apply in the civil courts, and the Tribunal will get power to strike cases out, award more costs in appropriate cases,  and give more effective directions, with teeth. However most commentators (apart from Brady Solicitors of Nottingham) seem to have overlooked the fact that as the LVT goes it would be pretty pointless to keep their name in the summaries served with the demands. So Schedule 6 of the Transfer of Tribunal Functions Order 2013/1036 takes the opportunity of altering the prescribed notice to give the new name, and make a few other small changes.

So, if you are a landlord, or advising a landlord, do make sure you serve the new form of summary with any service/administrative charge demands on or after Monday 1st July 2013, or the charges just aren’t due, which could be embarrassing, and potentially expensive. The actual changes are set out in the SI 2013/1036 and there are forms of the revised notice on Bradys‘ website at

You have been warned!

More Deposit Problems – Superstrike Strikes.

Superstrike v Rodrigues [2013] EWCA Civ 669

You might have thought that after the corrections made to the Deposit Protection legislation by the Localism Act 2011 and the recent case of Ayannuga v Swindells [2012] EWCA Civ 1789 matters would have settled down. You would have been wrong, and the CA has just tossed a particularly large and unpredictable cat among the legal pigeons in the form of the Superstrike case.

Very briefly, the matter concerns the protection of deposits paid for Assured Shorthold Tenancies (ASTs). From March 2007 the Housing Act 2004 requires these to be protected by the landlord by using one of several approved schemes, and for the tenants to be given prescribed information confirming this and setting out the way to use the free arbitration system included in the deal. This was a good idea in general, but very badly executed, as the legislation was full of enormous holes, and these had to be plugged by s184 of the Localism Act 2011, which took effect from 6th April 2012.  I have written about this before in November 2012  and indeed in March 2012 but it still won’t go away.

The Facts

The facts are remarkably simple.  In January 2007 Mr Rodrigues entered into an AST with the Landlords. It was for a fixed term of 6 months. He paid a deposit of one month’s rent, £600 odd, which was not protected as the compulsory scheme did not come into effect until 4 months later, in April 2007. When the fixed term ended Mr Rodrigues stayed as a statutory periodic tenant. All went well until 22nd June 2011 when the Landlord served a s21 notice requiring possession in 2 months, and possession proceedings followed.

By the time matters got to the CA (the Landlord having lost before the District Judge and won before the Circuit Judge on appeal) the issue was whether the deposit was “received” after the scheme came into force in April 2007, and so should have been protected. Clearly it hadn’t been physically received  – it was paid in January 2007 – but when the fixed term came to an end a periodic tenancy arose and the deposit was being used in relation to that. So in a sense it had been received then.

The Decision

Lloyd LJ in the CA started by deciding that the periodic tenancy that arose at the end of the fixed term under s5 Housing Act 1988 was a new tenancy, and not just a continuation of the fixed term. The wording of the section was quite clear.

The court then turned to the deposit and decided that it was as a matter of law paid at that point, because it had to be transferred from the old tenancy to the new one. Otherwise it couldn’t be used to cover liabilities under the new tenancy, as it was clearly intended to do. So, although the parties clearly hadn’t discussed matters in this way, and indeed almost certainly had not thought about the point at all:

The tenant should be treated as having paid the amount of the deposit to the landlord in respect of the new tenancy, by way of set-off against the landlord’s obligation to account to the tenant for the deposit in respect of the previous tenancy, given that the landlord did not seek payment out of the prior deposit for the consequences of any prior breach of the tenancy agreement.

Hence a payment had been received, the protection was triggered, and the deposit had to be protected and the prescribed information served. As it hadn’t been then s215 Housing Act 2004 meant that no valid s 21 notice could be served, and the claim for possession failed. Furthermore the Landlords had laid themselves open to a claim for the return of the deposit plus a penalty of up to 3 times the deposit under s214 HA 2004, should Mr Rodrigues choose to make one.

The Implications

The case related to an AST dating from 2007 and given the mobility of many tenants there are only a limited number of these still around. If you have one and you haven’t protected the deposit then you have a problem, and will need to return the deposit in full (or subject to any deduction agreed by the tenant) in order to make use of the escape clause under s215 (2A). If you have protected it and not given the appropriate prescribed information then you need to do so before the s21 notice can be served.

In either case you can still have a claim against you for penalties, because you will be many years out of time and although the limit was increased from 14 days of receipt it is still only 30 days of receipt, so you are very late indeed.

However, the real bombshell is that if the periodic tenancy that follows all fixed AST tenancies is a new tenancy, and the payment is deemed to be made by way of set-off as the CA has now decided, then all ASTs have the same problem. If you receive a deposit in say May 2012 and protect it right away and pass over the information in plenty of time you will have to do this again in November 2012 when the fixed term expires. And you probably haven’t because you didn’t realise that you needed to. So if you are thinking of serving a s21 notice think again.

Most of the schemes should continue to protect the deposit once the periodic tenancy kicks in, but very few landlords will have bothered to re-serve the information, when nothing has changed. And if you haven’t then you can’t serve a s21 notice until you do so, which will remind the tenant, who isn’t feeling too pleased with you at this point as you are trying to evict them, that you are out of time and that he can ask the court for the windfall of the penalties.

This is the bombshell – it affects virtually all ASTs and there is no real solution open to landlords except to hope. To say nothing of the thousands of possession actions that could be brought to a grinding halt, and the prospect of a multi-million pound series of claims being brought by tenants (egged on by litigation solicitors who are presently falling on hard times) who had an AST in the last 6 years and didn’t get two sets of information.

The Solution

Don’t expect too much sympathy from the CA. Lloyd LJ said to the hapless landlord’s counsel in Superstrike:

I am willing to accept that the need to comply may not have been foreseen. Unfortunately, several points under this legislation turned out not to be as may have been expected or intended.

There are however some possibilities:

  • Somebody may appeal to the Supreme Court. But I haven’t heard anything about this, and the cost will be a serious discouragement.
  • Most deposits should be protected. The protection schemes are considering their position and promise to release a joint statement shortly. So the only problem may relate to the information.
  • And a court may be more sympathetic to the argument that if information has been supplied and hasn’t changed then does it need to be given again (although s213(6) does require it to be given “within the period of [30] days beginning with the date on which the deposit is received by the landlord.”) In Superstrike the CA pointed out that the deposit had not been protected at all, and this was a basic part of the requirement.
  • Landlords can consider bringing claims on other grounds – say arrears of rent. This is not barred by the 2004 Act, although a wise tenant would counter claim for the penalties and set them off against the rent.

In the longer term the fiasco may be tidied up yet again by legislation. This government is unlikely to be pleased with the prospect of a new “whiplash” culture discouraging the supply of homes for rent, and making more work for struggling lawyers.

Failing this there are various ways forward:

  • Bite the bullet, re-serve the information, defend the claims and hope for the best in the short term.
  • In future serve the information twice. And hope for the best again.
  • Don’t take deposits in the future – insure if the tenant’s credit is good enough, or get a guarantor in many more cases.
  • Don’t have a fixed term at all in the AST. This has not been strictly necessary since 1996 (it was previously) but as s21 can’t be used until the tenancy is 6 months old it remains almost universal. But if you start with a monthly periodic tenancy this just runs on in the normal way, and there is never any ending of the tenancy and so no statutory periodic tenancy, and no requirement for any deposit to be transferred in this way. You just have to accept (and tell the tenant if you like by way of a note of the law set out on the tenancy agreement) that no order for possession can take effect until the tenancy is 6 months old.

But the way things have gone I wouldn’t be surprised if this problem comes back to bite us all before too long.

There are more detailed analyses of Superstrike in the Nearly Legal Blog and the Painsmith L & T Blog and on Tessa Shepperson’s Landlord Law Blog