This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.
The Deregulation Bill (the "BillAST") currently passing through the House of Lords includes provisions relating to assured shorthold tenancy ("") deposits received before 6 April 2007 giving landlords a free pass to protect the deposit and serve statutory information during the first 90 days after the Bill receives Royal Assent. This means landlords can retrospectively protect themselves.
The Bill also looks to remove the issues created by the courts in Superstrike and the related cases. Landlords now will only have to protect the AST deposit and serve the required information once.
Deposits
The case of Superstrike v Rodrigues (and the subsequent cases that followed) has caused landlords a great deal of trouble with regard to tenancy deposits having to be reprotected and prescribed information having to be reserved when fixed terms expire and the AST goes periodic. The Bill removes the requirement to reprotect and reserve if the landlord complied with the legislation at the beginning of the initial fixed term. This is good news for landlords and agents as it streamlines the process.
In the 90 days after the Bill receives its Royal Assent, for deposits received before 6 April 2007 where the tenancy becomes periodic (after that date) then landlords get a free pass to protect any deposits not previously protected and to serve the prescribed information on the tenant. Landlords taking advantage of this free pass to protect and serve now will be treated as though they had always complied with the legislation. This means that landlords get a retrospective release from the requirements of the Housing Act 2004 (as amended).
For a very small number of ASTs that became periodic before 6 April 2007 the legislation as drafted does not afford the free pass and this is an issue with the Parliamentary drafting. Parliament may amend this oversight before the Bill receives its Royal Assent.
Where deposits (received before 6 April 2007) have already been returned to the tenants and the AST has become periodic on or after 6 April 2007 then the landlord need take no action as it will be deemed to have fully complied with the legislation.
I will keep you updated on the Bill's progress.
