Tenancy Deposits - An Unwelcome Development For Landlords

Though tenancy deposit protection requirements have been in place now for more than 6 years, there has been uncertainty about whether these applied in respect of assured shorthold tenancies which began before 6 April 2007, but continued on after the contractual term expired some time after that date.

Before 6 April 2007, there was no requirement for landlords to comply with any tenancy deposit protection requirements and so the deposit would not have been protected by the landlord. Should the contractual term of such an AST expire and the tenant remain in occupation paying rent, a statutory tenancy (under section 5 of the Housing Act 1988) would then come into existence based on the terms of the AST. The previously unanswered legal question was whether or not, if this new statutory tenancy came into existence after 6 April 2007, it would trigger an immediate obligation to comply with the new tenancy deposit legislation.