Following the Charalambous court case ruling in December, the Government has now tabled an amendment to the Deregulation Bill in a bid to clarify the situation regarding Tenancy Deposit Protection (TDP).
This case was about a tenancy taken pre-April 2007, relating to an AST which was renewed and went periodic pre-April 2007 and subsequently never protected. The judge ruled that as the deposit was never protected, the landlord's Section 21 notice (served in 2012) was invalid.
Effectively the judgement stated that the need to have protected applied retroactively, even if the need to comply with s213 of the Housing Act 2004 was not retrospective, (i.e. there was not a need to have protected (past tense) before the law came into force, but there is a need to comply (present tense) whilst the deposit is held post implementation.
This amendment seeks to clarify that:
- No matter when a landlord took a deposit in respect of an AST (before, on or after 6 April 2007) they will be unable to serve a s21 notice if the deposit is not properly protected at the time of service.
- If a Landlord took a deposit on or after 6 April 2007 they will be unable to serve a s21 notice if they failed to comply with s213(3) which sets the time deadline for compliance.
- A tenant will only be able to apply to the County Court for the financial sanctions if the deposit was taken after 6 April 2007
i.e. if a landlord took the deposit before the law came into force, they just need to protect it before serving a s21 notice. They will not be liable for the financial sanction. But if they took the deposit after April 2007, when they should have complied anyway, they will still be caught by the prohibition on using s21 and financial sanctions.