Carter Jonas
Carter Jonas

Parliament’s dying Act clarifies tenancy law

You may be growing weary of election-speak and politicians but before Parliament dissolved at the end of March there was one outcome that brings major relief for landlords in the private rental sector (PRS).

One of the last acts of the Commons was to pass into law the Deregulation Act 2015, which came into force on March 26, 2015. It clears up the confusion caused by the now infamous Superstrike case, the outcome of which caused some panic about deposit protection and whether or not a valid Section 21 notice could be served to regain possession.

The outcome is still mindbending for some, but the important date to remember is June 23, 2015, by which time all deposits held but not registered with an approved tenancy deposit scheme must be registered and the prescribed information given to the tenant.

It has been compulsory since April 6, 2007, for landlords to protect a tenant’s deposit in respect of an assured shorthold tenancy (AST) in an approved tenancy deposit scheme and to provide certain prescribed information to the tenant within 30 days of receipt of the deposit. Failure to do so prevents the landlord serving a valid Section 21 Notice to bring the tenancy to an end and leaves landlords at risk of a financial penalty of up to three times the deposit.

A deposit on an AST taken before April 6, 2007, that continues to be held under a statutory periodic tenancy which also started before April 2007, does not need to be protected. However, in circumstances where landlords seek to gain possession of the property using notice under Section 21 of the Housing Act, 1988, they will still need to protect the deposit and issue the Prescribed Information to the tenant prior to serving the Section 21 notice.

A deposit on an AST taken before April 6, 2007, that continues to be held against a statutory periodic tenancy which began after April, 2007, must be protected with an authorised scheme, if this has not already been done, by whichever is the earlier of either:

- the 23rd June 2015, or;

- before a court decides on proceedings under Section 21 of the Housing Act 1988 (possession) or;

- before a court decides on proceedings under Section 214 of the Housing Act 2004 (failure to protect a deposit).

A deposit taken on an AST after April 6, 2007, and correctly protected, with Prescribed Information served to the tenant, does not need the Prescribed Information reissued to the tenant on future renewals of the AST or where the AST rolls into a statutory periodic tenancy so long as the landlord, tenant, and property information remain the same and the deposit remains in the same tenancy deposit protection scheme.

The Deregulation Act also clarifies that where an agent has protected a deposit on behalf of a landlord, the agent’s contact details can be provided within the Prescribed Information.

The law is relevant to any deposit currently held on an AST. It assists landlords who did not re-protect deposits or re-serve Prescribed Information when a tenancy was renewed or when a statutory periodic tenancy arose. Tenants must still be given revised Prescribed Information about their deposit if there is a change in tenant(s), landlord(s), premises or the deposit protection scheme.

There are also changes creating a new form of Section 21 notice coming into force on July 1, 2015. Any tenancy created after that date will need to use a new style of Section 21 notice, tenancies created before then, or based on renewals or extensions of tenancies created before then, can still use the old style notice. From June 1, 2018, all ASTs will need to use the new style notice irrespective of when they began.

The remaining changes to Section 21, including the various alterations regarding tenant complaints about condition, do not come into force until October 1, 2015, and, again, are only applicable to new tenancies commencing after that date until they become applicable to all tenancies from October 1, 2018.

Lisa SimonMARLA

Partner - Head of National Residential Lettings

Lisa is the head of Residential Lettings at Carter Jonas; she is based in our Knightsbridge and Chelsea office where she started her career and advises on all aspects of letting and managing propert...

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