Don’t be caught out by the Deregulation Act 2015

I gave a talk to solicitors today on the forthcoming changes to possession procedure using a section 21 notice. Here are 5 key points about the changes. The reforms discussed below are contained within sections 33-41 Deregulation Act 2015. This is important for all landlords in the private rented sector. The changes will take effect for all new fixed term assured shorthold tenancies (ASTs) from 1 October 2015, and for all ASTs whether fixed or statutory periodic from 1 October 2018.

1. Use the prescribed section 21 notice

This new provision mirrors the requirement to use a prescribed form for notices served under s.8 Housing Act 1988. A prescribed form is a good idea, although, firstly, it is not yet available to download because the form has not yet been prescribed, and secondly the anticipated form is likely to be minimal. All that a s.21(1) notice needs to do is give two months’ notice that possession of the dwelling-house is required, and in the rare cases where a s.21(4) notice needs to be served it must give at least two months’ notice ending on the last day of a period. See s.21(8)-(9) Housing Act 1988.

2. Give the tenant all the prescribed information and comply with prescribed requirements

We are awaiting the “prescribed information” that must be given to tenants from October. It may look something like this (which applies to long leasehold properties as required by s.153 Commonhold and Leasehold Reform Act 2002). Ideally, the prescribed information should be incorporated into the written tenancy agreement to minimise the risk that a tenant alleges it was not given to them. Compliance with prescribed requirements (e.g. having an EPC, carrying out yearly gas safety checks, and regular checks on electrical appliances) is already required under statute. From 1 October 2015, if a landlord fails to comply with prescribed requirements, any s.21 notice served will be invalid until the landlord has complied. See s.21A & s.21B Housing Act 1988.

3. Don’t serve notice too early…

It will not be possible to serve a s.21 notice within the first four months of a fixed term AST (but it may be served at any time thereafter, even if the fixed term AST rolls over into a periodic tenancy or a replacement tenancy is granted). Therefore, take care not to give the s.21 notice until after the first four months; otherwise, it will be invalid. See s.21(4B) & s.21(4C) Housing Act 1988.

4. … but use it or lose it

A claim relying on a s.21 notice will need to be commenced within 6 months of service of a s.21(1) notice, or within 4 months of the expiry date of a s.21(4) notice. If not, there is a bar on claiming possession. The possession claim will be struck out or dismissed. Thus, there will now be an expiry date on s.21 notices, much like s.8(3)(c) Housing Act 1988 in relation to the 12-month window for bringing a claim following the service of a s.8 notice. See s.21(4D) & s.21(4E) Housing Act 1988.

5. Take proper note of disrepair

Sections 33 and 34 Deregulation Act 2015 deal with retaliatory or ‘revenge’ evictions. Landlords must respond adequately if a tenant complains of disrepair, in order to avoid a s.21 notice being invalidated retrospectively. If the landlord does not respond promptly or adequately, or if the local authority serves an improvement notice, there is a bar serving a s.21 notice and, in all likelihood, if the tenant has complained to the local authority, on obtaining possession. Check whether the exceptions in s.34 Deregulation Act 2015 apply. See s.33 & s.34 Deregulation Act 2015.

The Deregulation Act 2015 introduces fundamental changes to the steps for taking possession under section 21 of the Housing Act 1988. Along with the above, there are changes to tenancy deposits and rent repayment, when tenants vacate before the end of a rental period. As with most reforms, it may not be possible to predict with certainty how the changes will impact on the private rented sector. The above tips provide some indication of how landlords can be best prepared from October 2015.


 

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