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Landlords Take Notice: Section 21 is changing!

Solicitors in London

News article published on: 30th September 2015

On the 1st October 2015 a whole raft of changes come into force by virtue of the Deregulation Act 2015 which will impact on whether a landlord can serve a valid section 21 notice on an assured shorthold tenant.

Since the introduction of assured shorthold tenancies in 1980, as long as landlords served a valid section 21 notice, they could obtain possession of the property without the need to prove any grounds. In recent years the section 21 notice process has become increasingly difficult as a result of the deposit protection legislation. Things are about to get a little more difficult for the landlord.

The changes apply to all new assured shorthold tenancies commencing after the 1st October 2015. It will apply to all tenancies after three years. The changes will however not apply to those tenancies that become statutory periodic tenancies on expiry of a fixed term tenancy which started before the 1st October 2015.

In summary, the changes which landlords need to be aware of are:

  • The new section 21(4B) of the Housing Act 1988 (“the Act”) provides that a section 21 cannot be served in the first four months of a tenancy. Where there has been a replacement tenancy ie a new tenancy of the same property between the same parties, the relevant date is four months from the start of the original tenancy.  This is particularly annoying for landlords who have granted six months tenancy as it is likely to be impossible to time the notice so that it ends on expiry of the six months tenancy.
  • The new section (4E) of section 21 of the Act provides that a possession claim cannot be issued after the end of 6 months from the date the notice was given. Under section 21(4) of the Act, the relevant period is four months beginning with the date specified in the notice.
  • A welcome change for landlords is incorporated in section 21 (4ZA) which removes the need for a section 21 notice to expire on the last date of a period of a tenancy (in England only).
    There is a new prescribed form of section 21 notice which must be used for all assured shorthold tenancies starting on or after the 1st October 2015.
  • The retaliatory eviction changes are likely to cause the biggest concern to landlords. Where an improvement notice has been served under the Local Authority’s housing health and safety rating system or where the Local Authority is carrying out emergency remedial works, the landlord will not be permitted to serve a section 21 notice for six months.  Where no such notice has been served by the Local Authority but the tenant has made a complaint about the condition of the property in writing, the landlord has 14 days within which to respond in writing setting out what he intends to do about the complaint and the period of time it will take. If the landlord (1) fails to reply or (2) replies by serving a section 21 notice or (3) gives a reply that is inadequate then the tenant may complain to the Local Authority who must inspect the property. If an improvement notice is served as a result of the inspection then any section 21 notice already served becomes ineffective and no further notice can then be served for six months.
  • No section 21 notice can be served where new prescribed information in the form of a CLG booklet “How to rent: the checklist for renting in England” has not been served on the tenant. The landlord does not have to provide a further copy whenever the booklet is updated during the tenancy. However, as soon as a new replacement tenancy has been granted there is a requirement for a further copy to be served only if there is a new version of the booklet published before the first day of the new tenancy.
  • There are further requirements that could cause landlord problems when serving a section 21 notice as a notice cannot be served unless:
    • The tenant has been provided with the Energy Performance Certificate for the property; and
    • The tenant has been provided with a current gas safety certificate.

Little thought appears to have been given to the strain these requirements are going to have on the court and Local Authorities. It is likely that Local Authorities are likely to see an increase in the number of people who want to have their properties inspected. These strains are likely to result in landlords having to wait to establish whether an Improvement Notice will be served and whether they can serve a valid section 21 notice.

In view of the procedural hurdles which a landlord has to overcome to ensure any section 21 notice served is valid, inevitably, there are likely to be landlords who fail to comply. The courts are likely to be faced with an increase in defences to section 21 proceedings which are usually issued under the accelerated procedure. If a defence is raised, a hearing will have to be listed which is going to put significant pressure on courts who are already struggling.

Landlords will be faced with more complaints about the condition of their property. Whilst this may not be a bad thing, inevitably there will be tenants who will use this process tactically.

The coming months are likely see many invalid section 21 notices being served which, no doubt, is going to result in more litigation.

For more information and advice on how these changes may effect you, contact our specialist housing lawyers. You can call the team on 020 7485 8811 or fill in our online enquiry form.

The Housing and Social Care team at Osbornes are recommended as a leading department in the UK by The Legal 500 and Chambers & Partners.

 

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