Sparse and, so far, conflicting advice is being offered in the wake of the Superstrike case.
The case has raised online speculation that tenants – going back six years – could legally pursue landlords, that landlords could pursue agents, and that both landlords and agents could go after tenancy deposit schemes.
The tenancy deposit schemes – TDS, Mydeposits and DPS, and possibly Capita – were yesterday due to meet with the Government department responsible for housing, CLG.
The Association of Residential Letting Agents (ARLA) has meanwhile advised its members to re-issue prescribed information each time a fixed term tenancy becomes periodic.
However, even this advice – apparently based on whether a tenancy becomes statutory periodic or contractual periodic – has led to confused agents asking for further clarification.
ARLA has said little else. Invited by us to comment, managing director Ian Potter told LAT: “We are reviewing the Superstrike v Rodrigues ruling and how it impacts and relates to current and future practice, and will be advising our members accordingly.
“We have always advised that best practice was to protect all deposits which fell under the AST structure.”
The Residential Landlords Association has told its members that it is seeking advice from TDS, its deposit protection partner, and will be issuing updates accordingly.
In contrast, the National Landlords Association – whose business interests include Mydeposits as well as the letting agent body UKALA – has condemned the online speculation and reporting of the case.
It issued detailed advice to its members saying that the Superstrike case will have little effect, and insists that it only pertains to tenancies started before April 6, 2007, and which subsequently became periodic.
The advice says that the case also only relates to landlords in that particular timeframe who have used Section 21 notices.
The NLA’s advice to its members – which we print in its entirety and without comment, but which has not convinced all commentators – is in our next story.
The NLA did, however, say that it is seeking further legal clarification in a joint press statement with UKALA. This is also in the next story, again reproduced without comment.
Law firm Barlow Robbins, however, totally contradicts the NLA advice, saying that the case does indeed raise issues for tenancies created since April 2007.
Solicitor Luke Maunder said the case has placed unwitting landlords at risk of serious financial penalty if they have failed to re-register a deposit and re-issue prescribed information.
His professional opinions are in today’s blog.
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Comments
All this talk of "contractual periodic Tenancies" is confusing me. Statute ALWAYS overides Contract, therefore a contractual periodic Tenancy is surely not actually legal or enforcable.
@Industry Observer
1. My mention of sarcasm was not aimed at you but those who don't seem to have anything more to offer to the debate than stupid or derogatory comments.
2. We have already taken a tenant to Court who claimed he only had to give one months notice and we were successful in obtaining an order for the remaining month, the Judge agreeing that the tenant had a contractual obligation to give two months notice. The requirement to give two months notice is clearly explained to tenants before they sign the agreement, the trade off being that they do not have to pay renewal fees if they wish to extend beyond the fixed period. The two months notice requirement has also been deemed not to be unfair by TDS as it matches that which the landlord has to give (as a matter of interest has been in our agreements since 1989!).
3. Your advice suggesting including the word 'contractual periodic tenancy' is most useful and I will look into this.
Actually Industy I suspect IHS was talking about 'Who are you and his IO trolling mates'
Some folk do not like others to be right and without the wit, language or argument to express themselves simply resort to insult.
Dear of Dear oh Dear
Let's see if I can try and help further to clear up some of these confusions
@IHS
I wasn't being sarcastic. Becaue your posts carry more sense than the majority I see on this forum I was actually paying you a compliment and saying I am sure your wording is correct. Having seen your wording I am not now so sure, for example if the 2 months notice refers to the tenant to be able to leave at the end of the fixed term that is out courtesy of OFT and UCT.
If it is a reference to it being notice when the tenancy has gone periodic it is also out because the legal entitlement to notice in a SPT from the tenant is one month.
If it is a contractual periodic the notice is determined by the last rent period in the fixed term - so again one month.
Biggest weakness I'd have thought is that it doesn't state it continues on a Contractual basis month to month. I am no expert on Contractual tenancies but we may all need to become so in order to avoid the problems with SPTs.
But I was not being sarcastic, I promise you. What I cantell you is tht from research yesterday into CPTs the ARLA advice and as delivered in training is that the agreement should state that it continues as a CPT. That's all I can offer.
@ In suport of Al
I can only assume you must know where Elvis is, or who shot JFK or have proof the Americans never went to the moon. It's all I can do to send an email and beyone WORD and EXCEL IT and the web are a parallel universe to me. Wish I did know how to hide where an email came from it could be handy sometimes.
You believe what you want, I suggest you respect Ros a little more and assume she and those running this forum also have a lot more IT nowse than I do!!
@Industry Observer
Your are spot on - maybe it would help everyone if I wrote instead in a disjointed, argumentative confrontational style?
Just consider this:-
Superstrike has clarified once and for all a periodic is a NEW tenancy
The 2004 Act states in general terms that any new tenancy means a new deposit and that deposit must be protected (or by inference re-protected)
Protecting a deposit as per 20004 and "011 LA Acts means doing two things - protecting the money and issuing PI (or by inference fresh PI).
I'm sorry it all seems so simple to me, but having been proved right on the new tenancy point I am 100% certain that if and when it gets tested unfortunately I and those with similar opinions will be right on the second point - that PI needs to be re-served.
As I've been asked to verify if Industry Observer's posts are indeed from IO, I can confirm that they are. Hope this helps.
@Industry Observer - our tenancy agreement states that the tenancy will be 'for the term of six months and should the tenancy not be determined at the end of such period by either party giving to the other not less than two months notice in writing it shall continue thereafter from month to month until it shall be determined by either party giving to the other not less than two months notice'
Shame theses debates often develop into slanging matches - why can't certain people not respect other people's opinions. In any case sarcasm is the lowest form of wit.
Could it be that the second IO post was an attempt to help someone IO had thought he had confused hence the adjusted writing style?
The problem I have is that the 'Who are you' post simply stamped on a discussion that was starting to emerge, helping no-one.
The 1 , 2 or 3 of you that seem to want to stifle debate, well done you have taken a subject that should be better understood by all and successfully closed it down.
For what it is worth, all these problems with the same but of legislation were all raised at the time but CLG did not understand the points being raised to them. Essentially CLG created a confused law that is open to deliberate financial manipulation by those who are smart enough to be crooked, and is now giving rise to inadvertent wrong doing by those daft enough to be honest.
Sorry pal but just because the posts came from the same email or IP address doesn't prove your case so unless Ros was sitting next to you when you drafted and posted them then its best we let her remain impartial.
I traced back your comments on here regarding Johnson and you said a lot more than that but regarding s5, if its 'clear' then why would it need to be in 'simpler' words? In fact didn't someone recently post s5 to show no trace of the word 'new' and ask you to do the same with the version you have?
Perhaps you could scan it over to Ros.
It's ok that we disagree on things, It happens but I'm going to have to stick with Alan and who are ya; sorry.
Alan
I think you and who are ya are confused and I see what you are getting at now - mock praise from who are ya, I get it now.
But it is the same me if ever n doubt just ask Ros to validate.
I have never questioned the Johnson ruling, all I have ever said is the Landlord was damned lucky and it could easily have gone the other way.
My opinions count for no more than anyone else's - all I am doing is flagging up for example that the Schemes or anyone can have an opinion, but in the end it is Court opinion that counts.
@In support of Al
I am flattered and can assure you that every post to this one at 1933 on 26th June on this thread is me. Disagree with the decision by all means but if you are an agent don't continue not to re-serve PI on new periodics for heaven's sake of as and when the inevitable post 2007 commencement case comes out you'll be liable to your clients!!
It may be daft, but s5 of the 1988 Act quite clearly shows a periodic is a new tenancy. Maybe it shouldn't, or maybe it should say it in simpler words, but that is what s5 says.
Ros I will email you separately but can you please confirm
Thanks
It's hardly point scoring if the point's valid. Industry Observer is welcome to post his views but having read them all its pretty clear the first two were written by someone else. Furthermore with regards to contributing to the discussion, how does the content of your post differ from that of Alan's when you add nothing to the topic either?
Let me break the cycle and say that I disagree with the decision and I think that a periodic tenancy is a continuation of the fixed period tenancy, especially as the periodic tenancy still retains the fixed tenancy t&c's. Let me also say that whilst I may disagree with Industry Observer I wholeheartedly agree he has a right to say it, I just wish HE would actually do that instead of using someone else's words. He'd also garner more respect if he wasn't so hypocritical and I think that's Alan's point.
I struggle with posters who come on here to score points off other posters, they never seem to contribute anything to the discussion but simply attack whoever it is that disagrees with what they think they think.
There is actually a need for posters like IO who at least attempt dialogue on matters such as this. It the subject matter it is complicated it is really quite difficult to get a balance between patronising explanation and verbosity.
'Doesn't anyone understand that no-one's opinion other than a Court, and ideally the CoA actually matters in this issue' - Industry Observer
Hold on, aren't you the same guy that questioned the recent CoA ruling about rent in advance? You seemed to have plenty of your own opinions then, even opting to dismiss the ruling in favour of the opinions of the trade press!
Sadly I would also have to agree with the sentiment of 'who are ya' as the composition of your current post compared to those you made earlier are like night and day, no way the same person wrote both.
Given the choice, I prefer your ghost writer.
Doesn't anyone understand that no-one's opinion other than a Court, and ideally the CoA actually matters in this issue?
We can all have whatever opinions we like fromed from whatever angles or interests that we like.
Don't shoot the messenger.
A contractual periodic is outside the provisions of the 19088 Act so IHS is correct assuming his tenancy agreement is soundly worded for this purpose which I am sure it is.
But Mikey is also right.
I offer no more as far too many contributors to this debate simply do not want to understand and accept the decision, daft or not, mainly because it has a direct impact on them with which I sympathise.
Sadly though that leads to posts like who are ya so I will waste no more time simply trying to help others and instead will just focus on my own clients alone.
I wish any agent or Landlord who continues not to re-protect the deposit (whatever that entails per scheme) and re-issue PI on any new periodics from now on the very best of luck - as you will need it.
If a deposit is protected, it remains protected until unprotected by the parties, regardless of what the tenancy "status" is, surely? After all, when the tenant moves out, thus the tenancy really has ended, the deposit still remains protected until the parties deal with it accordingly.
Has common sense gone out of fashion?
Spot on IHS but unfortunately as the Judge ruled a periodic is a 'new' tenancy it's implications can mean precisely that; that your post 2007 protected deposits will indeed unprotect themselves...
Personally I think the ruling's flawed and that a periodic tenancy is no more than a continuation of the fixed term tenancy and therefore the deposit protection should also be a continuation.
WOW, syntax - check, grammar - check, structured paragraphs and easy to digest content - check, even a comprehensive reply no less. 'Industry Observer' my ar*e!
I may be being quite dim here but as I understand it the decision in the recent case was because the deposit was never protected in the first place so when it was held that a statutory periodic tenancy was effectively a new tenancy the landlord was penalised for not protecting the deposit.
However when my post April 2007 fixed period tenancies become contractual periodic tenancies the deposits remain protected, they don't unprotect themselves!
I think you perhaps misunderstand the point I was trying to make, or more likely I made it badly.
What I was trying to say was aimed at the NLA comment that it isn't a great deal because the decision only applies to tenancies that started pre April 2007.
Leaving aside the point that I'd disagree with that interpretation - simply because the judgement was so clear in stating a periodic is a new tenancy (which is where the devil and detail is for the future) I am sure cases will very quickly flood into the County Courts with claims under s214 offences.
After all as a tenant what would you do?
If a lower Court Judge has a CoA case drawn to his attention, and bearing in mind the average hearing lasts 4 minutes if you are lucky as the Judge whizzes through his listing so he can get away to play golf, the Judge will be quickly and easily swayed by it. Happens all the time in UCT cases where all the claimant has to do is point to the OFT's pronouncements on the subject - not even Case Law just opinion - and the Judge finds in their favour.
That was what I meant.
The minutiae of this case is extremely significant, which is why myself and a few others have been advising clients to re-protect and re-issue PI on periodics for about 3 years if not longer.
Your own mathematical point is very well made and if NLA looked at the figures maybe they wouldn't be so blase about it and naive in thinking this is just going to be a narrow judgement affecting only a very limited number of tenancies.
Yes I'd agree at least 20% of tenancies are probably periodic but the figures are much worse. The average rent (allegedly) now is about £800 and the average deposit probably well above £1000. But you can't just multiply that by 720,000 you have to double it - deposit plus x1 minimum penalty.
Gulp!!
The situation is fairly bad anyway for the vast majority of private self managing landlords and an awful lot of agents as even if they have issued PI or even re-issued it mostly it will be incomplete or incorrect - lacking the post contact address, reference to the Relevant Person or above all lacking the Scheme rules affixed to it.
This really is a mega problem that so many people have simply been walking into, and if they don't start issuing PI now on new periodics they just compound their problems.
Whether you should re-issue PI now on existing periodics I think is a very difficult call indeed but doing so does have two benefits.
First you have at least complied with the Law even if late.
Second you can make damned sure that version is 100% correct!!
you said "not worry about the 2007/2008 minutiae"
What would you estimate at the hangover of tenancies from pre April 2007 that now exist as periodic tenancies?
This isn't a lets trick IO post, I am am tryingto quantify the value of those deposit that ought now to be protected.
Would 20% be too high? Ie about 720,000 of all current tenancies are periodic tenancies which started as ASTs prior to April 2007.
If we assume the average deposit at 150% monthly rent
so about £1000
All of a sudden the minutiae is worth about £800 million, all of it currently unaccounted for.
For what it is worth (bearing in mind my consistent position that a periodic tenancy is a new tenancy and always has been courtesy s5 of 88 Act) I think the NLA statement is as unwise and laid back as those others it criticises for being too hasty. For the following reasons:-
1. The case is extremely unlikely to go to the Supreme Court as the judgement was very clear, very sound, unanimous and Johnson did not go there – so why should Rodrigues?
2. The comment about facts in a CoA case is not entirely correct – it implies cases must be virtually identical, that is not the case. They can be broadly similar (as would a tenancy be that started post 2007 be). That linked to the Localism Act changes whiuch deliberately tightened TDP in favour of the tenant makes it obvious to me that any post 2007 case will be decided in the same way.
3. Indeed the most accurate comment is about other cases post 2007 and an inevitable case coming before the Courts shortly.
For what it is worth for once ARLA is correct and it is better to protect or re-protect and issue or re-issue PI rather than not do so. For very little effort protection is guaranteed, though only on new periodics of course.
My view is this ruling will cover all cases as the tenancy may have started pre 2007 but went periodic post 2008 when the TDP regulations applied. So as it is a new tenancy post TDP introduction the deposit should have been protected and PI served. No difference to a renewal or any tenancy starting post 2007 and then renewing or going periodic.
The fact the tenancy started pre TDP I believe to be a potential red herring and to rely on that somehow excusing all other ‘offences’ where the tenancy went periodic after TDP had started is a risky strategy in the extreme.
NLA is wise to be seeking further opinion. In any event there will soon be a post 2007 start date now periodic tenancy case brought and it is inconceivable the same decision will not be reached.
Meanwhile District Judges will doubtless hide behind this decision and not worry about the 2007/2008 minutiae.