Tenancy deposits for rented properties with ‘disorganised comings and goings’

Housing Law Week has republished a detailed explanation outlines the legal implications of a situation colloquially referred to as “disorganised comings and goings” in property letting. Here’s a summary of the key points:

  1. Description of the Situation: In this scenario, a landlord lets out a property to joint tenants but becomes uninvolved in property management beyond rent collection. When one occupier leaves, they find a replacement and transfer their share of the deposit to the incoming tenant. This cycle can continue for years.
  2. Legal Status of Occupiers: The case of Sturgiss & Anor v Boddy & Ors (2021) addressed the legal status of occupiers in such situations. Initially, the landlord argued that the occupiers were licensees, not tenants, and thus not entitled to deposit protection. However, the court found that they met the criteria for tenancy under Street v. Mountford, including paying rent, enjoying exclusive occupation, and having a term.
  3. Surrender and Re-grant: Despite the landlord’s lack of involvement in choosing or approving new occupants, the court ruled that each new occupier constituted a surrender and re-grant of the tenancy. This meant that with each turnover, a new tenancy was created with all current occupants as joint tenants.
  4. Deposit Protection: The court held that although the deposit wasn’t paid directly to the landlord, they effectively received it anew with each turnover. This obligated the landlord to protect the deposit each time, as failure to do so constituted a breach of deposit regulations.
  5. Legal Consequences and Penalties: While the landlord was penalized for the deposit breach, the penalty was minimal due to the landlord’s genuine belief that the deposit didn’t require protection. However, the ruling underscores the importance for landlords to protect deposits and avoid such situations to mitigate legal risks.
  6. Advice to Landlords: The author advises landlords against allowing such situations to occur, as they may eventually face costly penalties and legal complications. Landlords should be proactive in managing their properties to comply with regulations and protect their interests.

In summary, while the legal consequences of “disorganised comings and goings” have been clarified to some extent, there remains uncertainty, emphasizing the importance of landlords avoiding such scenarios altogether.

The original article can be seen here, and more details of the case, see Giles Peaker’s excellent post on Nearly Legal here.

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