New rules on assured shorthold tenancies and section 21 notices

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From 1st October 2015, there have been a number of changes to the rules governing assured shorthold tenancies and how landlords can recover possession. These have been introduced by the Deregulation Act 2015 and affect the procedure for ‘no fault’ recovery of possession (the section 21 procedure, as it is often called). Some of the rules simply confirm or ‘codify’ the current case law, but others are new and have quite serious consequences. It is important to be aware of these new rules because, if they are not followed, landlords may not be able to recover possession of their property from the tenant as quickly as they thought.

These changes affect all assured shorthold tenancies granted from 1st October 2015. At present the changes do not apply to fixed term tenancies granted before that date, or to periodic tenancies coming into effect after that date after the ending of a fixed term tenancy that was granted before 1st October 2015. However the changes will apply to all assured shorthold tenancies from 1st October 2018.

The new rules are set out below and, at present, only apply to assured shorthold tenancies granted on or after 1st October 2015.

There is a new form of Section 21 Notice. This is the notice that the landlord must serve to end the tenancy and recover possession of the property (the landlord can also serve a section 8 notice if the tenant is in breach of the tenancy – e.g. more than two months in arrears – but it is less commonly used with assured shorthold tenancies).  For all tenancies granted on or after 1st October 2015 the landlord must use a ‘prescribed’ form of section 21 notice (i.e. it must contain certain information for it to be valid). Previously it was sufficient if the notice was in writing. It is important therefore that landlords are aware of the new notice. Failure to serve the correct notice could result in costly delays in recovering possession.

Requirements for a Section 21 Notice to be valid.  Since 2007, a section 21 notice would not be valid if the landlord had not protected the deposit in an authorised deposit protection scheme and served the ‘prescribed information’ (see our previous blog ‘Deposit Protection Racket’).   However, landlords must also show that they have given the tenants (at the start of the tenancy or as soon as possible thereafter) the following information or documents:

  • Energy performance certificate
  • Up to date gas safety certificate
  • Government guide: ‘How to Rent’ – copies can be downloaded from the government website

https://www.gov.uk/government/publications/how-to-rent

It is not sufficient for landlords to rely on the documents that were handed to the tenants at the start of the tenancy.   If any of these documents have been updated, the new version must be given to the tenants before the section 21 notice will be valid.   It is therefore important to check the government website (see above) for updates of its ‘How to Rent’ booklet.    

When can a Section 21 Notice be served and when does it run out? A section 21 notice now cannot be served on the tenant during the first four months of a fixed term tenancy (i.e. a tenancy that gives the tenant a minimum of six months in the property). This ends the practice of landlords serving section 21 notices at the start of the tenancy.  However, if the tenancy is a ‘replacement tenancy’ (i.e. a fixed term tenancy that has come into being immediately following the end of the original fixed term tenancy), the four month rule runs from the start of the original tenancy; the rules are slightly different for periodic tenancies). Also, section 21 notices now have a ‘sell by date’. Once you have served a section 21 notice, if you do not issue a possession claim at court within six months, the notice will lapse and you would have to serve a new notice.

What is ‘Retaliatory Eviction’?   The Deregulation Act introduced a new law for tenancies granted on or after 1st October 2015. This was to tackle the situation where tenants complain to their landlords about disrepair to the property and they are then served with a Notice Seeking Possession (section 21 notice). Now, if a tenant complains to the landlord about disrepair, there is a procedure to follow if the landlord is to rely on a section 21 notice.

  • If a tenant complains to the landlord about the state of the property the landlord must either carry out satisfactory repairs within a “reasonable time” (this is not defined), or respond within 14 days (we recommend that this is in writing) describing the action to be taken.
  • If the landlord fails to take those steps and the tenant complains to the local authority, it will investigate whether repairs are necessary.   If, as a result, the local authority serves an Improvement Notice or a notice requiring Emergency Remedial Action, the landlord cannot serve a valid section 21 notice to recover possession for at least six months after service of the notice.

To avoid any dispute about whether this procedure has been complied with, we recommend that:-

  • Any complaints or responses should be in writing, as if the case goes to court, the judge will need to see evidence as to when any complaint or response was made
  • It is important for landlords to engage with the tenants and the local authority about any complaints as soon as possible, to avoid this procedure coming into play.

These changes are significant and will have serious consequences if the right steps are not followed or the correct forms used.   It is important that landlords and tenants are aware of these rules.   If you need more information or help dealing with these new rules, please contact our Head of Civil Litigation, John Searby.

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