Coodes law firm is warning that letting agents and landlords face an administration nightmare after The Court of Appeal recently ruled in favour of a tenant.
The warning from Coodes, comes following the Superstrike Ltd v Rodrigues decision where Rodrigues, the tenant, successfully argued against Superstrike’s use of the preferred accelerated possession procedure, a section 21 notice, because they did not receive the correct deposit notification.
Coodes’ head of buy-to-let team Jo Morgan, said: “As of April 2007 all rent deposits have to be placed in a tenancy deposit scheme (TDS).
“The landlord, Superstrike, claimed that because the tenancy was signed before that date that they could obtain a possession order against Rodrigues”.
The twist, according to David Williams, a solicitor in Coodes’ commercial property department, was amendments brought in by the Localism Act 2011 that mean that Superstrike should have placed the original deposit in a TDS at the start of the statutory periodic tenancy and notified their tenant of this within 30 days of receipt.
It was deemed that the deposit was not correctly protected meaning Superstrike’s s.21 notice and their attempts to use the accelerated possession procedure to remove Rodrigues from the property failed.
Williams said: “For agents, if the tenancy rolls over, the landlord may decide they want to review the situation on a month-by-month basis, which means sending details of the deposit being protected by a TDS repeatedly or paying deposits back to tenants on short notice without the time to carry out final inspections.
“That’s a lot of administration and a lot of paperwork for landlords and letting agents”.
For more information on this issue please contact Jo Morgan or David Williams at Coodes Solicitors on 01726 874700 or visit here