Judgment Follows On From Landmark ‘Superstrike’ Ruling

The outcome of the recent Gardner v McCusker case has provided further guidance about a landlord’s legal obligations in relation to assured shorthold tenancies and the Tenancy Deposit Scheme (TDS). 

Since 2007, the law has required landlords who receive a deposit to pay it into a registered scheme and provide information to the tenant about how the money is being held.

In 2013, the Court of Appeal decided in the Superstrike Ltd v Rodrigues case that where a tenancy was signed before the TDS came into place and the tenant remains in occupation after the fixed term, the landlord is still required to protect the deposit and give the tenant the prescribed information.

Further clarity has now been provided by the Gardner v McCusker case which was heard in the Birmingham County Court. Here, the tenancy was signed after the introduction of the TDS. The landlord complied with the TDS provisions by protecting the deposit and giving the tenant the prescribed information. However the landlord did not provide a further copy of the necessary information about the deposit scheme to the tenant when the initial fixed term tenancy came to an end.

The latest judgment means that if the prescribed information surrounding the TDS is not provided within 30 days of the fixed term expiring, the landlord will not be able to serve notice and bring the agreement to an end - even though the deposit is protected.

Expert Opinion

The law surrounding the Tenancy Deposit Scheme has always been straightforward and well-understood when it comes to new lettings and this case provides much needed clarity on situations when more recent tenancy agreements reach the end of their fixed term and become periodic. <br/> <br/>“The Gardner v McCusker judgment follows the line of thinking in last year’s landmark Superstrike case and although it will not be too much of a surprise, the impact could be huge if ignored. <br/> <br/>“Landlords must take note and act accordingly by managing their portfolios carefully. Failure to do so could mean the landlord has to pay their tenant up to three times the amount of the deposit. It will also severely limit their ability to serve a s.21 notice and end the tenancy.” <br/>