Landlords who took deposits prior to 6 April 2007 for fixed term tenancies which became statutory periodic on or after that date have until 23 June 2015 to protect the deposit in one of the government approved tenancy deposit schemes. Landlords who fail to protect their tenants’ deposits in accordance with the rules risk financial penalties as well as restrictions on their ability to regain possession of their properties.
The new deadline to protect pre-April 2007 deposits was introduced in the Deregulation Act 2015which received Royal Assent on 26 March 2015. The deposit provisions came into effect immediately, giving landlords with old deposits 90 days to put their house in order.
The Deregulation Act makes amendments to the Housing Act 2004, the statute containing the original tenancy deposit rules.
The Housing Act 2004 requires landlords to protect deposits and serve tenants and any relevant person with a set of prescribed information within 30 days of receipt of the deposit. It is a two-fold obligation and if landlords fail to comply with the requirements they are liable to pay financial penalties. Furthermore, a landlord is unable to serve a s21 notice on a tenant at any time when the deposit is not protected or the prescribed information has not been given.
The Deregulation Act changes address the issues raised in the Court of Appeal case of Superstrike v Rodrigues  EWCA Civ 669. This case concerned a deposit taken in connection with a fixed term tenancy prior to the tenancy deposit legislation coming into force in April 2007. At the end of the fixed term, after April 2007, the tenancy became statutory periodic. The Court ruled that the statutory periodic tenancy created after 2007 was a new tenancy. Therefore the deposit needed to be protected and the prescribed information served on the tenant within 30 days of the commencement of the new tenancy.
The decision had wide ramifications for landlords. If the creation of a statutory periodic tenancy was a new tenancy then so was a fixed term renewal and landlords were therefore obligated to protect the deposit and serve the prescribed information on the creation of each new tenancy. Satisfying the first requirement might not be difficult if the tenant’s deposit had been protected in a scheme from the start and continued to remain in the scheme, but landlords also had to to re-issue the prescribed information within 30 days of the new tenancy. Many landlords had not re-served the prescribed information and therefore found themselves exposed to financial penalty claims.
The Deregulation Act clarifies the law on tenancy deposit protection and resolves, to some degree, the issues raised in Superstrike. A summary of the changes introduced by the Act can be accessed here.
The Act gives landlords with old deposits until 23 June 2o15 to protect the deposits and serve their tenants and relevant persons with the prescribed information. If they do so then it will be treated as if they have always complied with the tenancy deposit rules and they will escape the financial penalties.
Landlords who do not protect their tenants’ deposits and serve the prescribed information by this date will not benefit from the provisions in the Deregulation Act. They will be subject to the full effects of Superstrike, which remains good law.
Landlords to whom the new provisions apply must act immediately. The days left to protect old deposits are rapidly running out.