It concerned a very common scenario with this type of letting, where one tenant leaves and arranges informally for someone else to take their place. Usually, the incoming tenant pays the outgoing one their share of the deposit.
In very simplified terms the judge decided that every time this happened it created a new tenancy, and that the new tenancy was subject to the raft of rules and regulations that plague residential tenancies these days.
In particular, he decided that the rules relating to the protection of deposits applied, and that as the landlord had dealt with these arrangements informally, and had therefore not set up a fresh deposit protection on each change of tenant, they were in breach of the deposit regulations.
The net effect was that the landlord had to pay £1,200 to each of three tenants. As usual, of course, it wouldn't have just been the £3,600; the landlord would almost certainly have had to pay several times that sum in both their own and the tenants' legal fees.
And although it wasn't an issue in this case it's not just the deposit rules that one has to be careful of - it's all the other rules that apply to a new tenancy, such as supplying a gas safety certificate, a copy of the How to Rent book, checking immigration status etc. A failure to observe any of these requirements every time there's a change of tenant could result in a criminal record and/or an inability to regain possession of the property.
There's a good summary here - https://www.lexology.com/library/detail ... &utm_term=
For those who want to read the whole judgment it's here - https://www.bailii.org/ew/cases/Misc/2021/10.html
All the replies to this post have been about the investing aspects (and similar) and off-topic for Legal Issues. I am therefore moving the replies over to a new topic on the Property Investment Discussions board.
Please continue the off-topic discussion over there. I'll come back and a link to the new topic in a minute (chas49)