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Deregulation Act and Charalambous v Ng

The Government was able to amend the Deregulation Bill and to clarify the situation surrounding tenancy deposits following the Charalambous v Ng decision in December 2014. Brie Stevens Hoare QC and Morayo Fagborun Bennett of Hardwicke Chambers represented Mrs Ng, a landlord who the Court of Appeal held was precluded from serving a notice seeking possession under the Housing Act 1988 s21 where the tenant's deposit had not been paid into an authorised scheme as required by the Housing Act 2004 s213, notwithstanding the fact that when the deposit was originally paid, there had been no obligation to pay it into an authorised scheme.

The amendments tabled mean that under the Deregulation Act 2015, which came into force on 26 March 2015:

a) Section 215 (1) of the Housing Act 2004 now provides that all tenancy deposits, regardless of whether they were received before or after the Housing Act 2004 came into force, must be properly protected in a tenancy deposit scheme before a section 21 notice can be served.

b) Section 215A of the Housing Act 2004 provides a 90 days grace period from 26 March 2015 for landlords who received deposits before 6 April 2007 and the tenancy became periodic after that date, to comply with the requirements of s213 (3) and (5). Such deposits will need to be protected and the prescribed information served within 90 days of the commencement of the Deregulation Act.

c) Section 214(1) of the Housing Act 2004 was also amended so that tenants can only apply to the county court under s214 if the tenancy deposit was paid on or after 6 April 2007. This means that a landlord in Mrs Ng’s position would not be liable to pay 1 to 3 times the amount of the deposit.

d) Section 215(B) of the Housing Act 2004 clarifies the situation where a tenancy deposit was received on or after 6 April 2007, protected and the prescribed information served (even if done late). Provided that the deposit continues to be held within the same authorised tenancy deposit scheme, there is no need to re-serve the prescribed information, when a new statutory periodic tenancy arises at the end of the fixed term of the original tenancy.

For more information on Charalambous and Karali v Ng and Ng [2014] EWCA Civ 1604, please refer to Morayo Fagborun Bennett and Brie Stevens-Hoare QC's case report.