The Facts: Superstrike Ltd vs Rodrigues
September 9, 2013
In the case of Superstrike Ltd vs Rodrigues, a legal argument affecting Tenancy Deposit Protection, the Court of Appeal has held that a Statutory Periodic Tenancy is not a continuation of a fixed term tenancy and should be considered a brand new tenancy.
The legal implications are that deposits paid by tenants needed to be re-protected within 30 days of the new statutory periodic tenancy arising.
It is best to fully understand what went on, what the implications are and what should be done to protect against this situation and so I have put together this informative round up.
The case of Superstrike Ltd vs Rodrigues
- A tenancy was created on the 8th January 2007 for one year (before mandatory Assured Shorthold Tenancy [AST] Tenancy Deposit Protection [TDP] legislation)
- The tenancy became a statutory periodic tenancy on 7th January 2008 (TDP legislation now in place)
- A Section 21 (S21) was served on 22nd June 2011 and the possession order was granted on 8th May 2012
- The case was set aside as the tenant argued noncompliance with TDP
- Section 5 of The Housing Act 1988 states that after a fixed term ends a statutory period tenancy arises and a statutory period tenancy is a new tenancy and therefore the deposit should have been protected in line with TDP legislation
- The TDP legislation states the deposit should be protected on receipt of the money. The defence argued that as there was no physical receipt of the funds this would mean that the previous deposit carried over. However, The judge decided that there was a virtual receipt of funds given that a new tenancy had arisen so again TDP legislation applied.
So, what are the implications of this ruling and what effects could it have?
If you do not serve the Prescribed Information (PI) within 30 days of a statutory periodic arising then:
- Any S21 notices may not be valid
- Penalties may still be awarded to the tenant
With these implications in mind it’s time to focus on what can be done to avoid being caught in this situation.
- Check all statutory periodic tenancies are protected
- Given changes made by The Localism Act and the outcome of this case re-serve prescribed information (ensure most recent version of the relevant scheme documentation). It is also advisable to check the tenant’s contact details for inclusion on the document so that it can be certified to have been received by the correct person
- Ensure you re-register deposits within 30 days of the tenancy becoming statutory periodic and re-serve PI and leaflet at that time
- Create warning notes on all statutory periodic tenancies regarding S21 notices where PI has not been served within 30 days
Hopefully this article will help you to understand what happened in the case, how it could affect you and how to avoid being caught out.