Our grateful thanks to the Painsmith blog again for news of another Tenancy Deposit case (and for giving me something to write about in these case bereft times).
This is a County Court case on the issue of ‘renewal’ of a tenancy that started before April 2007 and the introduction of the tenancy deposit rules. Where a deposit was taken for a tenancy prior to April 2007 there is no requirement for it to be protected. But when the tenancy is subsequently ‘renewed’ – actually a new assured shorthold tenancy – but the deposit ‘held over’ from the previous tenancy, does the deposit need to be protected?
This has been the topic of some argument, focusing on the definition of ‘receives a deposit’ in s.213 Housing Act 2004. My view has always been that this did not mean solely the physical transfer of cash or cheque and that the parties’ agreement that the deposit should be transfered to the new tenancy constituted the landlord ‘receiving’ the deposit.
I’m glad to see that HHJ Cryan at Clerkenwell & Shoreditch County Court agrees. This is not, of course, a binding judgment and other County Courts may well find otherwise, but I presume that the Clerkenwell District Judges will follow the Circuit Judge on this one.
I’m aware that Francis Davey, an NL contributor takes another view. Over to you, Francis?
As Painsmith’s blog rightly observes, this leaves the issue of when a fixed term assured shorthold lapses into a periodic tenancy under s.5 HA 1988 without a new AST being agreed. The weight of opinon seems to be that this is a continuation of the AST, but s.5 states that the periodic tenancy arises at the expiry of the fixed term tenancy. Arguably a new (periodic) tenancy and thus requiring deposit protection? No-one has run this yet…
[For all tenancy deposit case posts click here]