My Lords, this clause and the government amendments are here because of the uncertainty and concern caused to landlords and tenants across the private rented sector by the Court of Appeal decision in the case of Superstrike Ltd v Marino Rodrigues. The noble Baroness’s amendment also touches on some of the implications of that case. The decision effectively interpreted the legislation differently from its original intention and contrary to the advice given by successive Governments. It left a large number of landlords at risk of court action and open to a financial penalty, because the tenancy deposit protection requirements must be complied with within a set period. That leaves landlords in an impossible position with no means of complying. The situation is made more complicated by the increase in the number of landlords resident outside the United Kingdom, which means that they are dependent on letting agents to deal with their tenants. Similarly, it has left tenants unclear about the status of their deposits.
The aim of Clause 31 is not to completely reverse the decision made by the Court of Appeal, as it is important that the protection offered to these tenants as a result of the ruling is retained. It gives landlords a grace period to protect those deposits and give the necessary information to the tenant. That applies to landlords who still hold deposits which were taken before the introduction of the tenancy deposit protection legislation for tenancies which rolled over into statutory periodic tenancies after the introduction of the legislation.
The clause will make it clear that where a deposit has been protected, the prescribed information is given to the tenant and the tenancy is subsequently renewed, there is no need for the landlord to keep providing the same information every time the tenancy is renewed. It will also be clear that this has always been the position and will continue to be from now on.
Where legal proceedings are under way at the time the provisions come into force, tenants will be protected from paying their landlords’ relevant legal costs where the court subsequently decides against the tenant in the light of these provisions. We see the provisions as striking the right balance between ensuring that tenants do not suffer financially as a result of the retrospective legislation and ensuring that landlords are not penalised where they have followed government advice. I hope that these changes are accepted as uncontroversial.
Finally, government Amendments 25 to 35 are technical drafting amendments.
The Government agree with the intention behind the noble Baroness’s amendment but are not sure that it is necessary. We understand that the law as it stands provides that, where the agent holds the deposit, it is sufficient for just the agent’s details to be included in the prescribed information. Article 2(1)(g)(iii) of the Housing (Tenancy Deposits) (Prescribed Information) Order 2007—I am sure that she knows it by heart—indeed states that,
“the name, address, telephone number, and any e-mail address or fax number of the landlord”,
should be provided. However, Section 212(9)(a) of the Housing Act 2004 explains that any reference in Chapter 4 of Part 6 of the Act—and hence in the 2007 order—to “landlord” in relation to any shorthold tenancy includes a reference to a person acting on his behalf in relation to the tenancy. Clearly, an agent managing the deposit on behalf of the landlord falls within that definition. Paragraph 40 of the regulatory impact assessment that supported the 2007 order covered this point, stating that:
“The person who receives the deposit will need to be the person who is registered with the authorised tenancy deposit scheme. Thus, in instances where the deposit is taken by a letting agent, the landlord’s details will not need to be included in this information”.
This is an issue with the deposit schemes that letting agent bodies have previously raised with the department, and I understand that they still consider the language of the Act and the supporting statutory instrument to be ambiguous. As I have set out above, we do not share that view. Of course, if they are able to provide evidence to the contrary we will consider whether a change to the order could be made to clarify the point, but we do not believe that any change to the primary legislation is required. I have asked officials from the Department for Communities and Local Government to contact the tenancy deposit schemes and letting agent bodies to discuss this further.
I hope with that assurance that the noble Baroness will be willing to withdraw her amendment. I thank her for the discussions we had before Committee and, if necessary, I am very happy to have further discussions. I commend Amendments 25 to 35 to the Committee.