Superstrike Ltd vs Rodrigues Tenancy Deposit Protection Court of Appeal

@Steve Masters - OK, we agree that the ruling is that an SPT is a NEW tenancy I think.

Do we also agree that the law states that a NEW Deposit Protection Certificate must be provided and that new Prescribed Information must be issued when a new tenancy is created?

Have you done that?

Now do you see my point?

Does this ruling affect you personally Mark? Do you have any tenant deposits on fixed term ASTs that are now running Statutory Periodic? I truly hope so...

If you don't and you're not in the same boat as other (generally) law-abiding landlords it would certainly explain your apparent enjoyment regarding the potential ramifications of this (totally outrageous) court ruling designed to crucify landlords holding deposits. I quote your post below:

"@Steve Masters – OK, we agree that the ruling is that an SPT is a NEW tenancy I think.

Do we also agree that the law states that a NEW Deposit Protection Certificate must be provided and that new Prescribed Information must be issued when a new tenancy is created?

Have you done that?

Now do you see my point?"

@Gareth Thomas - what on earth gives you the impression that I am enjoying this? I am scared to death! YES I am affected by this, if every tenancy I've had go SPT over the last years needed to be re-protected and I should have issued a new DPC and prescribed information I am personally screwed and so are all of my family members. The fines I could incur would be horrendous. I am pursuing this passionately in the search for what to do for the best, preferably an alternative to jumping off a bridge!

Please don't try to make this personal, I'm not and I have made the following point more than once "PLEASE DON'T SHOOT THE MESSENGER!"

I created Property118 to share best practice Gareth. Sometimes that means telling people about things they would prefer not to hear.

@Mark - I can't find the definitive source that states when the Prescribed Information needs to be served, is it each time a new Deposit is taken or each time new Deposit Protection is taken out. This is crucial.

So NO, I can't agree that "the law states that a NEW Deposit Protection Certificate must be provided and that new Prescribed Information must be issued when a new tenancy is created?"

You may be right but I haven't seen the proof.

"OK, we agree that the ruling is that an SPT is a new tenancy I think."

Well that seems to be this week's bit of wisdom from the men in wigs.

"Do we also agree that the law states that a new Deposit Protection Certificate must be provided and that new Prescribed Information must be issued when a new tenancy is created?

Quite possibly. But that is not the full story. The case in question relates to a tenancy that started before 6 April 2007. Therefore, when it went periodic, if we must accept a new tenancy was created the need for protection was, we are now led to believe, triggered.

To come to their opinion the men in wigs had to come to the conclusion that there was a new tenancy AND the landlord was deemed to have received a new deposit with no funds being transferred.

What they did not decide for certain was whether or not the original protection process could be deemed to cover the "second" deemed deposit. The reason they did not rule on this is they did not have to. Judges like to avoid extending their decisions to cover other circumstances. Even if they had commented it may well have not been binding as obiter dicta.

If the landlord can be deemed to have received a second deposit, who is so confident that they can say beyond certainty what the actual ruling would be had the deposit been protected originally? I can see the implication, I understand the new uncertainty. What I do not accept is the certainty implied in certain posts in this thread.

Having said that, I am glad my tenancies are worded with the extension built in. Still feeling slightly smug but not over confident.

@Steve Masters - Unlike Mary Latham, Industry Observer and David D'Orton Gibson I'm not good at rattling off the specific clauses, dates and sections of legislation so you may have to bear with me on that unless somebody else wouldn't mind answering your question please.

@Robert M - I now follow your logic and I hope that you are right. It will be people in wigs who will need to clarify the law for us all, yet again! Having spent all weekend researching this and all day reading and responding to comments here I have come to the conclusion that this certainly isn't as cut and dried as I first thought. One thing which is for sure is that I will be reviewing the way I do things when this is all resolved. I have no idea what to do in the meantime 🙁

"What they did not decide for certain was whether or not the original protection process could be deemed to cover the “second” deemed deposit."

@Robert M - Exactly what I meant. If the Protection Providers say protection continues who is to say it doesn't, the Court of Appeal didn't.

Lets see what other have to say on this point.

"I can’t find the definitive source that states when the Prescribed Information needs to be served, is it each time a new Deposit is taken or each time new Deposit Protection is taken out. This is crucial."

If only I could answer this. The legislation starts off being relatively clear(?)

213(1) Any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme.

213(3) Where a landlord receives a tenancy deposit in connection with a shorthold tenancy, the initial requirements of an authorised scheme must be complied with by the landlord in relation to the deposit within the period of [30] days beginning with the date on which it is received.

213(4) For the purposes of this section “the initial requirements” of an authorised scheme are such requirements imposed by the scheme as fall to be complied with by a landlord on receiving such a tenancy deposit.

In other words whether any prescribed information needs to be served depends on the individual deposit scheme rules. If your deposit protection scheme required a donation to UKIP of £5 per deposit and you did not pay, you would be in breach of their scheme rules and so not have complied with 213(4).

I think you will find the schemes require you to serve the prescribed information each time you need to protect a deposit. In other words, I think you will find the scheme rules require the certificate to be passed to the tenant with prescribed information.

Life has taught me that nothing is ever as bad as it initially seems. The dust needs to settle on this for a week or so, till there is clear direction on what is required. Even in the worst case, I am confident that at least 80% of my tenants would not try and pull a fast one on me just due to a legal loop hole.

Here is something for the argument, I'm probably being a bit silly, but. I get an eviction order on my tenant via a section 8 during the initial 6 month term, but the eviction is not enforced by a bailiff until a few months after the fixed term has expired (these things take time). Could the tenant not now argue that the fixed term tenancy the S8 eviction was granted on has now expired, that a new tenancy has been created and so I now need to issue a section 21 to end this periodic?

@Robert M - 213 (1) says the deposit must be protected on receipt. The Court of Appeal said the deposit was received when the tenancy became a SPT, not because it was returned and paid again (as that was not the case) but by virtue of a new tenancy having been created. Still hoping I'm wrong BTW.