Court of Appeal decision regarding rent deposit

27-06-2013 09:01

The requirement, in respect of residential tenancies, to protect a rent deposit has been with us since 6 April 2007. Any tenancy predating that, but where a new tenancy was subsequently entered into with the Tenant after the date, fell within the regulation, meaning that the deposit would have to be protected. However there was some debate as to whether or not the same rules would apply if the tenancy continued without a new tenancy being signed by the Tenant (a Periodic Tenancy). The Court of Appeal decided on 14 June 2013 that in their opinion it did and in the circumstances, where any deposit is being held by a Landlord or their Agent regardless of when the tenancy was entered into, it will need to be protected and notice give to Tenant. If not then the Landlord cannot serve a valid section 21 Notice until that is done (limiting the Landlord’s options to terminate the tenancy) and/or the Tenant will be able to bring a claim for compensation, which can result in the Landlord paying up to three times the value of the rent.

If you have any queries on this subject, please contact Peter Corrigan.

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