Do you know your obligations as a Landlord?
As a landlord of residential property you have certain responsibilities when it comes to protecting your tenant’s deposit. Failing to do so can result in hefty pay-outs or not being able to get possession when you want to, so make sure you are following the correct procedures.
Landlords have had a bit of a hard time recently. In the 2013 case of Superstrike v Rodrigues, the Court of Appeal said that when a fixed term assured shorthold tenancy ran over into a statutory periodic tenancy, a new tenancy was created. As such, any deposit held by the Landlord had to be protected in a statutory scheme. That was fine if you had already done this, but deposits paid prior to the change in the law requiring all deposits to be protected, then fell foul of this. The consequences? The Landlord could not serve a notice on the tenant to get them out and was potentially liable to pay compensation of up to three times the deposit to the tenant.
Just as Landlords and their agents were getting their houses in order, the case of Gardner v McCusker came along this year. When a deposit is put in a statutory scheme, the Landlord is required to give the tenant prescribed information about the scheme. Failure to do so leads to the same consequences as if the Landlord had not protected the deposit. Following the logic in Superstike, the Court said when the tenancy ran over into a statutory periodic tenancy, as a new tenancy was created, so did the requirement to serve prescribed information - again!
The advice after Gardner has been to re serve the prescribed information again on the tenant but all is not lost. The Government has announced that they are looking to simplify the procedure as their intention was never to over complicate or burden the Landlord but just to protect the tenant's deposit. In the meantime, if you have tenants with deposits and need to review if you are complying with the present rules, take advice from one our Dispute Resolution Team. This could save you time and money and avoid the risk of facing a claim for failure to comply with the rules.