According to the scheme, a tenants deposit must be registered in an authorised scheme and the landlord is obliged to provide the tenant with certain detailed information about how it is held. Apparently if this is not done a landlord cannot serve a notice to quit under section 21 of the Housing Act 1988. Further if the tenancy is renewed the landlord must ensure the deposit remains protected and must also update the tenant with all relevant documentation regarding the same.
Landlords have long been under the incorrect impression that tenancies commencing before 2007 were exempt from the scheme. A Court of Appeals decision recently clarified (Superstrike Ltd v Rodrigues) that this is not the case.
Tenancies commencing prior to 2007
The COA ruled in this case that when the tenancy became periodic, in effect it converted to a new tenancy and the deposit should have been protected, because the deposit was not protected when the landlord served a section 21 notice, this was declared invalid!
Tenancies expiring prior to 2007
In the COA case of Charalambous vs Ng, the facts are as follow, the landlord had granted a tenancy in 2002, it was renewed on two occasions and eventually ended in 2005 (well before 2007). The tenants subsequently remained in the property and an implied statutory periodic tenancy arose. The landlord served a section 21 notice in 2012 and the tenant went to court to claim the notice was invalid based on the fact that the deposit had not been protected as above, the county court dismissed the tenants application but the COA agreed with the tenant!
Landlords pay attention
The cases above make it clear that it is crucial that a deposit is registered or re-paid to a tenant before a section 21 notice can be served (regardless of whether the deposit needed to be registered initially). It is advisable that landlords review all deposits, should they wish to serve a section 21 notice and regain possession of a property!