Tenancy Deposits and Prescribed Information

A tenancy agreement breach can occur when a landlord or tenant fails to comply with their obligations under the lease. In Sebastiampillai v Parr, the tenant appealed a possession order made under Section 21 of the Housing Act 1988. The central issue was whether a new landlord is obligated to provide the tenant with prescribed information regarding the tenancy deposit when there has been a change in landlord, despite the original landlord having previously provided such information.

Tenancy History and Deposit Handling

The tenant’s initial tenancy began with a 12-month fixed term, during which a £1,050 deposit was paid and protected with the Deposit Protection Service (DPS). The original landlord, Mr. Kadiwar, failed to provide the prescribed information during this first term but rectified this during a subsequent tenancy. A series of fixed-term tenancies followed, with the deposit retained throughout. During a statutory periodic tenancy, Mr. Kadiwar served updated prescribed information, and a final 12-month fixed-term tenancy commenced thereafter.

Change of Landlord

Mr. and Mrs. Sebastiampillai acquired the leasehold of the property, subject to the existing tenancy. The deposit was transferred to their DPS account. A statutory periodic tenancy arose subsequently, and no further fixed-term tenancies were agreed upon. The new landlords did not serve any prescribed information upon the tenant following their acquisition.

Possession Proceedings

The new landlords served a Section 21 notice, leading to a possession claim and an outright possession order. The tenant, initially unrepresented, appealed the decision, arguing that the new landlords had not complied with the statutory requirements to protect the deposit and provide the prescribed information within the required timeframes.

Legal Principles

The tenant’s appeal referenced the case of Superstrike Ltd v Rodrigues [2013] EWCA Civ 669, which established that a landlord need not physically receive a tenancy deposit for obligations under Section 213 of the Housing Act 2004 to arise; acquiring the right to use the deposit suffices. This case highlighted that landlords might be required to comply with deposit protection obligations upon each new tenancy, even if the deposit was retained throughout.

To address such issues, Section 215B was inserted into the Housing Act 2004 by the Deregulation Act 2015. This section provides that if a landlord has complied with the initial requirements and provided prescribed information for an original tenancy, they are deemed to have complied for any subsequent replacement tenancies, provided certain conditions are met, including continuity of landlord and tenant and the deposit being held in the same authorised scheme.

Arguments Presented

The tenant argued that the new landlords had “received” the deposit upon acquiring the property and, therefore, were obligated to comply with Section 213 by providing the prescribed information. They contended that the change in landlord meant that the protections under Section 215B did not apply, as this section requires continuity of the same landlord.

The new landlords acknowledged that they had not provided the prescribed information but argued that the previous landlord’s compliance should suffice under Section 215B. They contended that the statutory periodic tenancy arising subsequently replaced the original tenancy, and thus, they were deemed compliant.

Court’s Decision

His Honour Judge Gerald allowed the tenant’s appeal. He determined that the new landlords had received the deposit by the time it was transferred to their DPS account, triggering the obligations under Section 213, which they had not fulfilled. The judge held that the previous landlord’s compliance did not amount to deemed compliance for the new landlords under Section 215B, as this section requires the same landlord throughout the tenancies. The change in landlord meant that the new tenancy did not replace the original tenancy within the meaning of Section 215B, and fresh compliance with the deposit protection requirements was necessary.

Implications

This case underscores the importance for new landlords acquiring properties with existing tenancies to ensure they comply with tenancy deposit protection requirements. Relying on the previous landlord’s compliance is insufficient; new landlords must protect the deposit in an authorised scheme and provide the tenant with the prescribed information within the statutory time limits to serve a valid Section 21 notice.

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