More limitations on landlords seeking possession under Assured Shorthold Tenancies
Legal Update: Changes brought in by the Deregulation Act 2015
The s.21 possession procedure is a desirable method for landlords seeking possession of property let on an assured shorthold tenancy. Under s.21 of the Housing Act 1988, if the notice requirements have been met, courts are obliged to grant a possession order without the landlord having to establish a ground for possession. Much has changed over the years in relation to securing the deposit, serving the correct type of s.21 notice, and mastering the date on the notice. But now the Deregulation Act 2015 (“the Act”) has consolidated the changes over the years so that under new tenancies entered into after 1 October 2015 landlords will have to follow certain steps before a s.21 notice seeking possession can be validly served.
The changes will apply to new assured shorthold tenancies which started after 1 October 2015 and only in England.
Assured shorthold tenancies which were once fixed and became periodic after 1 October or were always periodic and continued after 1 October 2015 are not affected. So landlords can continue to use the old regime for those periodic tenancies. The regime will be extended to all assured shorthold tenancies after October 2018.
We provide a summary of the changes below:
A valid notice
There is now a new prescribed notice called Form 6A which may be used for all assured shorthold tenancies prior to 1 October, but must be used for those new tenancies which started after 1 October 2015. A copy of the new notice can be seen here.
After 1 October 2015 a landlord or a person acting on behalf of a landlord will be unable to serve a valid s.21 notice unless it has provided the tenant with the following:
- An Energy Performance Certificate,
- A gas safe certificate and
- A copy of the Department for Communities and Local Government’s booklet, “How to rent: Checklist for renting in England”
Point 3 above will not apply to Private Registered Providers of Social Housing.
What else is new?
- A tenant will be entitled to a repayment of rent where the tenancy ends half way through a period
- Landlords will not be able to serve a valid s.21 Notice within the first 4 months of a tenancy.
- Once the notice has been served it will last for 6 months. So if a landlord does not issue proceedings within the 6 month period after the notice has been served they will have to serve a new notice - “use it or lose it”.
- A landlord’s s.21 notice will be invalid if the local authority has served an enforcement notice following a complaint by the tenant (which was subject to other details about the tenant making, or attempting to make a complaint to the landlord which was not adequately responded to within 14 days). This will not apply to Private Registered Providers of Social Housing.
- If the property requires an HMO or selective licence under part 3 of the Housing Act 2004 and there is no licence in force (and one has not been yet applied for) the section 21 notice is also invalid.
Landlords and agents no longer need to ensure that notices expire on the date of the last day of a period of the tenancy: 2 months' notice will suffice (for monthly periodic tenancies).
Since April 2007 landlords are required to ensure that any deposit taken is protected in a government approved Tenancy Deposit Scheme and that the tenant has been provided with the prescribed information. Since 2012, the prescribed information must be given to the tenant and a deposit protected, within 30 days. If a landlord fails to comply with this, they cannot serve a valid s.21 notice until the deposit has been returned to the tenant. If a deposit has been protected but the prescribed information not given, the landlord should ensure that he gives the tenant the prescribed information before serving a s.21 notice (s.215(2) Housing Act 2004).
The Deregulation Act has changed some aspects of this
Deposits taken before 6 April 2007
- Pursuant to s.32 of the Deregulation Act which amends s.215A of the Housing Act 2004, if a deposit was taken before 6 April 2007 and was not protected and remains unprotected, a landlord will not face any financial penalties but the Act gives the landlord an opportunity to do one of following in order for the s.21 notice to be valid:
- Protect the deposit before a court decides on possession proceedings under section 21 of the Housing Act 1988 or;
- Protect the deposit before a court decides on proceedings under section 214 of the Housing Act 2004 (failure to protect a deposit)
- If the tenancy no longer exists or the deposit is no longer held, and it was not protected, the protection requirements under s.213 of the Housing Act 2004 are deemed to have been complied with.
Deposits taken since 6 April 2007
- A tenant can only make a claim under s.214 (for three times the deposit) in respect of a deposit paid on or after 6 April 2007
- If a landlord received a deposit on or after 6 April 2007, protected it and served the prescribed information, there is no need to re-protect the deposit or re-serve the prescribed information if the tenancy is renewed or a statutory periodic tenancy arises. This applies so long as the landlord and tenant remain the same, the let premises are the same or substantially the same and the deposit is protected under the same scheme.
- The prescribed information can contain the landlord’s agent’s details and the agent can sign the certificate
The Smoke and Carbon Monoxide Alarm (England) Regulations 2015 also came into force on 1 October 2015. This states that a smoke alarm must be fitted on each storey of the premises on which there is a room used wholly or partly as living accommodation; and a carbon monoxide alarm must be fitted in any room of the premises which is used as living accommodation and contains a solid fuel burning combustion appliance. The detectors & alarms must be checked on each new tenancy by the landlord. Local Authorities can enforce any breach of this.
The following types of tenancies will be excluded from these regulations
- Shared accommodation with landlord or landlord's family
- Long leases
- Student halls of residence
- Hostels and refuges
- Care homes
- Hospitals and hospices
- Other accommodation relating to healthcare provision
Private Registered Providers of Social Housing will not have to comply with these provisions however it is good practice if they do.
What the changes mean
The Act will not be welcome news to landlords who have seen a variety of changes over recent years. The changes give greater limitations on a landlord’s ability to serve a s.21 notice to end a tenancy.
Landlords and tenants will now need to understand their new rights and obligations more than ever before. It should also become apparent that landlords are likely to face more complaints by tenants about the condition of the property which will inevitably lead to more disputes. Landlords will have to be vigilant as to which complaints are genuine and those that could be used as a tactic to delay possession. Landlords should also start implementing these new procedures now so that it becomes standard practice to ensure the steps are followed at the start of the tenancy, and so that they don't miss the strict time limit of 6 months once a s.21 notice has been served. With the increase of defended possession claims it is important for landlords to get it right first time to prevent expensive litigation.