Even though it’s been 11 years since the deposit legislation came into force, it is still one of the most popular topics for callers to the Landlord Advice Team.
Often, landlords are surprised to discover that their tenancy began after the deposit legislation came into force and are dismayed to find that they are liable for large sums of money when their tenant’s solicitor comes calling.
This week’s case was slightly different.
The member contacted us, concerned that upon the purchase of a property as a buy-to-let, she had received the deposit from the previous landlord and an older tenancy agreement.
Surprised to receive the money as she was used to using custodial schemes, the member checked the various deposit websites to see if there was a matching deposit certificate.
Finding there was none, she proceeded to contact us.
We asked the member when the tenancy began and she informed us that it began on October 15th 2006 for the term of one year and had been periodic ever since.
This she confirmed with the tenant and the previous landlord.
Normally in these cases, a statutory periodic tenancy would have arisen at the end of the fixed term.
This would have counted as a brand new deposit, triggering the need to protect either in October of 2007, or in 2015, when landlords with unprotected deposits were given a one month amnesty to remedy the situation, after rules changes as a result of the Superstrike case.
In this case however, the landlord’s tenancy agreement stated that after the end of the fixed term, it would ‘continue on from month to month on the same terms until either party serves notice on the other.’
This is what’s called a contractual periodic tenancy as it’s a periodic tenancy written into the contract.
These tenancies are not classed as new tenancies but continuations of the original one.
As the original tenancy began before April 6th 2007, the landlord could not be held liable for the deposit penalty.
She did however, have to either return the deposit or protect it within a scheme before serving a section 21 notice.
Happy at this the landlord set out to put the deposit into a deposit protection scheme.
Rupinder Aujla, LAT manager, said: “We’re always happy to help members with queries around deposits. It’s a difficult area for landlords and agents to navigate so if you’re in any doubt you should always contact LAT to find out what to do.
Find out more:
- RLA members are able to get deposit protection at discounted rates, through DepositGuard, which is brought to you in partnership with the Tenancy Deposit Scheme. This is FREE to join for RLA members.
- The RLA runs an online course on Deposits and Inventories, now with 20% off at just £22.40 for RLA members and £28.00 for non-members.