As we noted when writing up Superstrike Ltd v Rodrigues [2013] EWCA Civ 669 (see our note, here), the case left open an interesting – and important – question. If a fixed term has expired and a statutory periodic tenancy arisen, do the requirements in s.213, Housing Act 2004 (deal with the deposit in accordance with an authorised scheme; comply with any initial requirements of the scheme; provide the prescribed information in the Housing (Tenancy Deposits) (Prescribed Information) Order 2007) arise again? If they do, does non-compliance render s.21 notices invalid (s.215)and/or expose landlords to the statutory damages (s.214).
Well, we have an answer in a recent county court case: Gardner v McCusker 3BM70525, Birmingham County Court. The facts are fairly straight-forward and, I suspect, common. Mr & Mrs Gardner let a property to Ms McCusker for a fixed term on six months in November 2009. There was a deposit of £600 which was protected in the MyDeposits scheme in January 2010. There were various attempts to provide the prescribed information, including in November 2009, January 2010, May 2012 and September 2012. In May 2010, the fixed term tenancy expired and a statutory periodic tenancy arose. In March 2013, a notice under s.21, Housing Act 1988 was served. Possessession proceedings were issued and were met with a defence and counterclaim contending that there had been, inter alia, no service of the prescribed information in respect of the statutory periodic tenancy.
The argument for the tenant went like this:
(a) on the coming to the end of the fixed term tenancy, a new tenancy arose by operation of law (s.5, Housing At 1988; Superstrike);
(b) in respect of that new tenancy, the deposit which had been paid in connection with the fixed term tenancy was deemed to have been re-paid, but now in respect of the new tenancy (Superstrike);
(c) it followed that there had been a “receipt” of a deposit by the landlord in May 2010, when that new tenancy arose;
(d) upon receipt, the obligations in s.213 arose;
(e) those obligations included a requirement to serve the prescribed information;
(f) that had never been done because (i) none of the various attempts at compliance met the requirements of the Prescribed Information order; and, (ii) even if they did, they all purported to relate to the (now expired) fixed term tenancy (i.e. all claimed the tenancy started in November 2009 and all referred to a deposit being paid on that date, etc);
(g) the result of this was that the s.21 notice was invalid and the landlord was liable to pay damages.
The landlord argued:
(a) just as the deposit was deemed to “roll over” into the new tenancy, so the prescribed information which was provided under the old tenancy was deemed to “roll over” into the new tenancy;
(b) the prescribed information which had been provided (on at least one of the four occasions) was valid;
(c) Superstrike could be distinguished because, in that case, the landlord had never even attempted to comply with the requirements of s.213 either under the fixed term (which pre-dated the coming into force of the relevant parts of the Housing Act 2004) or the statutory periodic.
The court found for the tenant. The logic of Superstrike was not confined to cases where the fixed term tenancy came into being before the 2004 Act came into force. The ratio of Superstrike was that the statutory periodic tenancy was a new tenancy under which a deposit was deemed to have been paid. That was equally applicable to the present case. It followed that all the requirements in s.213 arose afresh in May 2010, i.e. when the statutory periodic tenancy arose.
Those requirements included a requirement to serve the prescribed information. That had not been done in the present case as each of the attempts to comply were, factually, inadequate (for reasons which are, I suspect, fact-specific). It followed that the prescribed information had not been given in respect of the statutory periodic tenancy and the s.21 notice was invalid. The court ordered the deposit to be returned to the tenant and damages of 2 times the value of the deposit to be paid (so £1,800 in all). The claimants were to pay the costs of the claim and counterclaim (to be set-off against some rent-arrears and outstanding costs orders from other – earlier – proceedings).
All in all, ouch for the landlords and encouragement for tenants (and their lawyers) to take this point. Interestingly, the decision in this case broadly accords with the position taken by the various tenancy deposit schemes (see here) who take the view that it is prudent to re-serve all the prescribed information when a statutory periodic tenancy arises.
With thanks to Justin Bates of Arden Chambers, counsel for the tenant, for the note of hearing.