Tenancy Deposit Prescribed Information by New Landlord
An interesting case has been reported on the NearlyLegal blog, Sebastiampillai v Parr. Central London County Court, 11 April 2019.
When tenancy deposit schemes were first introduced in 2007, it was the position that the deposit needed protection and new prescribed information was required at each renewal and when the tenancy went statutory periodic (see Superstrike Ltd v Rodrigues 2013 EWCA Civ 669).
Then, the Deregulation Act 2015 changed the position to say there was re-protection and deemed giving of new prescribed information at renewal or statutory periodic arising as long as the renewal was between the same landlord, tenant and for the same property. The deposit must also be in the same scheme as before the renewal.
This only works if the deposit was protected correctly and proper prescribed information was given before the renewal. If the deposit was not protected or prescribed information not provided, any renewal or statutory periodic is a further and separate breach.
But, what is the position if there’s a new landlord? Must further prescribed information be given?
In this case, the old landlord had given several renewal tenancies between 2007 and 2014. Although the deposit was protected in 2007, no prescribed information had been provided at the time of protection but had been given in 2008 - see the NearlyLegal post for a full breakdown of events.
In July 2014, the Sebastiampillais became the new landlord and had transferred the deposit to their DPS account by September 2014. However, no prescribed information was given when the transfer occurred or subsequently.
In March 2018, the new landlord served a section 21 notice under which possession was initially ordered.
However, the tenant appealed, arguing that a new deposit had been received when the new landlord took over in July 2014 or September 2014 when the deposit was transferred into the new landlord's name.
Further arguments were put forward, and again, see the NearlyLegal post for a more detailed analysis than this summary.
The new landlord argued that the compliance by the previous landlord to protect and give prescribed information follows through to the new landlord, so further prescribed information was not required when the deposit was transferred.
The court held that the new landlord received the deposit at least by September 2014 when it was transferred (our note: it was probably received from July 2014 when they became the new landlord, but that point didn’t matter to the case). The new landlord had failed to provide prescribed information before the section 21 notice.
The previous landlord's compliance with the deposit protection rules did not amount to deemed compliance by the new landlord. For deemed compliance with renewal, the replacement tenancy must be between the same landlord, tenant and property.
There was a new landlord, so the chain was effectively broken, and new compliance was now needed.
Once a new landlord has correctly protected and given prescribed information, that new landlord is deemed to have complied at each replacement tenancy they make with the tenant.
The section 21 notice was invalid, and the possession order should not have been given in the first instance.
Subscribers get full access to exclusive content, including forms, articles and discounts, plus our time saving Tenancy Builder tool.
Signup for our free weekly digest and get the latest news and guidance straight to your inbox (some content requires a paid subscription).
View Related Handbook Page
Many landlords take a deposit from tenants to hold for the duration of the tenancy. When the tenant moves out, this is returned to the tenant less any deductions permitted: typically for damage (above fair wear and tear), additional cleaning, and cover any outstanding rent. Note: deposits can only be withheld if stipulated what the deposit is being held against in the contract.