Section 21 Periodic Tenancies re Superstrike

The Govt has published the text of the Government amendment to the Deregulation Bill that is proposed to deal with tenancy deposits and specifically the Superstrike position of a new tenancy (and requirement to re-protect the deposit and re-serve the prescribed information) arising when a fixed term ends and a statutory period tenancy begins.
 
The text of the amendment – a new S.215A to S.215D to the Housing Act 2004 – is at page 10012 onwards in that link and below.
 
Briefly, the effects appear to be:
  • Where a deposit taken on a fixed term tenancy after April 2007, and protected and Prescribed Info served, this is treated as if they had been complied with for any subsequent statutory periodic tenancy. Once it is in force, there will be no need to re-protect the deposit or re-serve the prescribed information.Where a deposit taken on a fixed term tenancy after April 2007, and protected and Prescribed Info served, this is treated as if they had been complied with for any subsequent ‘renewal’ tenancy for a further fixed term tenancy, or contractual periodic tenancy, provided that landlord, tenant and property remain the same. Once it is in force, there will be no need to re-protect the deposit or re-serve the prescribed information.
  • Where a deposit was taken for a fixed term prior to April 2007, the landlord or agent has 90 days from commencement to protect the deposit. Or, if earlier, before a court determines a s.214 claim, or decides on a s.21 based possession order (or appeal of such an order). If the deposit is protected and prescribed information served within the 90 days, or before the court’s determination on an order, it is as if the landlord/agent had protected initially.
  • Transitional provisions.
    Any s.214 claim or s.21 possession claim which is settled or finally determined before the commencement date is not affected and will be as per Superstrike. Any s.214 claim or s,21 possession claim issued prior to commencement but settled or finally determined after commencement will be decided on the basis of the amendment. However, the court must not order the tenant to pay the landlord’s costs in these cases, so far as they relate to the s.21 possession claim or s.214 deposit claim. The same applies to extant appeals.
Note that ‘finally determined’ means after appeal determined or time period for appeal has passed.
 
Those advising both landlords and tenants should look at all of this very carefully. There will no doubt be various pressures to speed up proceedings or to slow them down, depending on parties and the types of proceedings. For landlords a section 21 notice can be retrospectively validated by the commencement of the amendment, but may still fail on Superstrike principles up until that date.
 
For tenants, a s.214 claim based on Superstrike is still valid if settled or finally determined prior to commencement.
 
The clock is ticking on Superstrike defences to possession, and s.214 claims. But I suspect that, as with the Localism Act amends in 2012 and the requirement for all post April 2007 deposits to be protected within one month, there will be a lot of landlords and indeed agents who get caught out by the 90 day provision here. There may not be that many pre-2007 deposits around, but the numbers are not insignificant.
 
THIS INFORMATION WAS PRODUCED FROM
 
 

Text of the Amendment

“Tenancy deposits
In Chapter 4 of Part 6 of the Housing Act 2004 (Tenancy Deposit Schemes), after
section 215 insert—

“215A Statutory periodic tenancies: deposit received before 6 April 2007
(1) This section applies where—
(a) before 6 April 2007, a tenancy deposit has been received by a landlord in connection with a fixed term shorthold tenancy, and
(b) on or after that date, a periodic shorthold tenancy is deemed to arise under section 5 of the Housing Act 1988 on the coming to an end of the fixed term tenancy.
(2) If, on the commencement date—
(a) the periodic tenancy is in existence, and
(b) all or part of the deposit paid in connection with the fixed term tenancy continues to be held in connection with the periodic tenancy, section 213 applies in respect of the deposit that continues to be held in connection with the periodic tenancy, and any additional deposit held in connection with that tenancy, with the modifications set out in subsection (3).
(3) The modifications are that, instead of the things referred to in section 213(3) and (5) being required to be done within the time periods set out in section 213(3) and (6)(b), those things are required to be done—
(a) before the end of the period of 90 days beginning with the commencement date, or
(b) (if earlier) before the first day after the commencement date on which a court does any of the following in respect of the periodic tenancy—
(i) determines an application under section 214 or decides an appeal against a determination under that section;
(ii) makes a determination as to whether to make an order for possession in proceedings under section 21 of the Housing Act 1988 or decides an appeal against such a determination.
(4) If, on the commencement date—
(a) the periodic tenancy is no longer in existence, or
(b) no deposit continues to be held in connection with the periodic tenancy, the requirements of section 213(3), (5) and (6) are treated as if they had been complied with by the landlord in respect of any deposit that was held in connection with the periodic tenancy.
(5) In this section and sections 215B to 215D “the commencement date” means the date on which section (Tenancy deposits) of the Deregulation Act 2014 is fully in force in England and Wales.

215B Statutory periodic tenancies: deposit received on or after 6 April 2007
(1) This section applies where—
(a) on or after 6 April 2007, a tenancy deposit has been received by a landlord in connection with a fixed term shorthold tenancy,
(b) the requirements of section 213(3), (5) and (6) have been complied with by the landlord in respect of the deposit held in connection with the fixed term tenancy,
(c) a periodic shorthold tenancy is deemed to arise under section 5 of the Housing Act 1988 on the coming to an end of the fixed term tenancy, and
(d) when the periodic tenancy arises, the deposit paid in connection with the fixed term tenancy continues to be held—
(i) in connection with the periodic tenancy, and
(ii) in accordance with the same authorised scheme as when the requirements of section 213(3), (5) and (6) were last complied with in respect of it.
(2) The requirements of section 213(3), (5) and (6) are treated as if they had been complied with by the landlord in respect of the deposit held in connection with the periodic tenancy.

215C Renewed fixed term or contractual periodic tenancies: deposit received on or after 6 April 2007
(1) This section applies where—
(a) on or after 6 April 2007, a tenancy deposit has been received by a landlord in connection with a shorthold tenancy (“the original tenancy”),
(b) the requirements of section 213(5) and (6) have been complied with by the landlord in respect of the deposit held in connection with the original tenancy,
(c) a new fixed term or periodic shorthold tenancy (“the new tenancy”) comes into being on the coming to an end of the original tenancy or a tenancy that replaces the original tenancy,
(d) the new tenancy is not one that is deemed to arise under section 5 of the Housing Act 1988,
(e) the new tenancy replaces the original tenancy, and
(f) when the new tenancy comes into being, the deposit paid in connection with the original tenancy continues to be held—
(i) in connection with the new tenancy, and
(ii) in accordance with the same authorised scheme as when the requirements of section 213(5) and (6) were last complied with in respect of it.
(2) The requirements of section 213(5) and (6) are treated as if they had been complied with by the landlord in respect of the deposit held in connection with the new tenancy.
(3) The condition in subsection (1)(a) may be met in respect of a tenancy even if—
(a) it replaces an earlier tenancy, and
(b) the tenancy deposit was first received in connection with the earlier tenancy (either before or after 6 April 2007).
(4) For the purposes of this section, a tenancy replaces another tenancy if—
(a) the landlord and tenant under the later tenancy are the same as under the earlier tenancy, and
(b) the premises let under the later tenancy are the same or substantially the same as those let under the earlier tenancy.

215D Sections 215A to 215C: transitional provisions
(1) Sections 215A to 215C are treated as having had effect since 6 April 2007, subject to the following provisions of this section.
(2) Sections 215A to 215C do not have effect in relation to—
(a) a claim under section 214 of this Act or section 21 of the Housing Act 1988 in respect of a tenancy which is settled before the commencement date (whether or not proceedings in relation to the claim have been instituted), or
(b) proceedings under either of those sections in respect of a tenancy which have been finally determined before the commencement date.
(3) Subsection (5) applies in respect of a tenancy if—
(a) proceedings under section 214 in respect of the tenancy have been instituted before the commencement date but have not been settled or finally determined before that date, and
(b) because of section 215A(4), 215B(2) or section 215C(2), the court decides—
(i) not to make an order under section 214(4) in respect of the tenancy, or
(ii) to allow an appeal by the landlord against such an order.
(4) Subsection (5) also applies in respect of a tenancy if—
(a) proceedings for possession under section 21 of the Housing Act 1988 in respect of the tenancy have been instituted before the commencement date but have not been settled or finally determined before that date, and
(b) because of section 215A(4), 215B(2) or 215C(2), the court decides—
(i) to make an order for possession under that section in respect of the tenancy, or
(ii) to allow an appeal by the landlord against a refusal to make such an order.
(5) Where this subsection applies, the court must not order the tenant or any relevant person (as defined by section 213(10)) to pay the landlord’s costs, to the extent that the court reasonably considers those costs are attributable to the proceedings under section 214 or (as the case may be) section 21 of the Housing Act 1988.
(6) Proceedings have been “finally determined” for the purposes of this section if —
(a) they have been determined by a court, and
(b) there is no further right to appeal against the determination.
(7) There is no further right to appeal against a court determination if there is no right to appeal against the determination, or there is such a right but—
(a) the time limit for making an appeal has expired without an appeal being brought, or
(b) an appeal brought within that time limit has been withdrawn.”