Residential landlords with tenants who have been in occupation for several years under periodic tenancies arising from the Housing Act 1988 may well be alarmed by the case of Superstrike Ltd v Rodrigues  EWCA Civ 669.
The case concerned a claim for possession by Superstrike against its tenant, Marino Rodrigues.
Rodrigues’ occupation had begun by virtue of an assured shorthold tenancy granted for a fixed term of one year less one day commencing on 8 January 2007. A deposit of £606.66, being the equivalent of one month’s rent, was taken by the landlord and as this predated the commencement of the deposit protection legislation contained in the Housing Act 2004 (which came into effect from 6 April 2007), the landlord had not protected it in any of the schemes.
Time passed and the lease was never formally renewed, the tenancy arrangement only being continued pursuant to the 1988 Act provisions.
On 22 June 2011, Superstrike served a section 21 notice on the tenant requiring possession and eventually took possession proceedings with an order for possession made on 8 May 2012 but this was set aside and Superstrike appealed.
The tenant contended that as a result of the new statutory periodic tenancy created by the 1988 Act at the end of the fixed term tenancy, the original deposit should be treated as if it had been received anew by the landlord on 8 January 2008. As a consequence, the tenant argued, under the new tenancy, the deposit fell within the 2004 Act legislation and the landlord should have protected it. Failure to do so meant that it was not able to serve the section 21 notice validly.
The court agreed with the tenant that the possession order ought not to have been made on this basis and dismissed Superstrike’s appeal.
Clearly landlords who have tenants in a similar position should take measures to protect the tenant deposits (or agree new documented fixed term tenancies).