Tenancy Deposit Protection – deposits paid before 7 April 2007

I am obliged once again to the Pain Smith blog for drawing my attention to a new County Court case on the Tenancy Deposit Protection Scheme regulations.

One of the many imponderables of the regulations is whether or not they apply to deposits taken before 7 April 2007, where a new tenancy agreement had been taken after that date. In a County Court decision in Clerkenwell & Shoreditch recently, the Judge took the view (in my opinion, rightly) that when the tenancy is renewed (by the parties signing a new tenancy agreement) the deposit is, in effect, taken again and must therefore be protected from that point.

The blog also raises the spectre of periodic tenancies coming into the same category. This is because of section 5 of the Housing Act 1988 which provides for a new periodic tenancy to arise after the expiry of the fixed term. If the courts (and in particular the Court of Appeal) took this view, it would have very serious implicantions for practically all tenancies where the fixed term ended after 7 April.

My advice to all landlords holding deposits (or rent paid in advance) is that you should arrange to have them deposited as soon as possible (if you have not done so already), whether or not the deposit was paid before 7 April 2007. Only this way can you be (relatively) safe from claims from tenants under the regulations.