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Are Tenancy Deposits worth the effort?

 

Article date:  19/06/2014

The latest tenancy deposit case, Gardener v McCusker, has increased the administrative burden on landlords and/or agents once again, and opened the door more widely to potential disputes.

The decision last year in Superstrike v Rodrigues confirmed that if a tenant had paid a tenancy deposit in relation to an AST entered into before the tenancy deposit rules came into force in April 2007, it needed to be registered if the fixed term expired and the tenant continued to occupy.

In the Gardner case, the court applied the Superstrike decision and went further, to hold that the deposit has to be re-registered if the tenancy started after 6 April 2007 and if the deposit had already been registered.

This now means that residential landlords now have to comply with the registration requirements both at the start of any AST and when the fixed term expires and the tenant stays on. Even though there may be no payment changing hands after the fixed term expires, landlords need to ensure they have registered with a Tenancy Deposit scheme and serve prescribed information again within 30 days of expiry of the fixed term tenancy.

If in doubt, seek legal advice from Nyree Applegarth or Laura Westwood at Higgs & Sons.

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