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Changes to the law that will make Landlords sit up

The Deregulation Act 2015 (DA) was passed on 26 March 2015 and covers various points which will be of interest to Landlords and those appointed to deal with residential properties. Most of the important changes come into force on 1st October 2015. Below is a brief summary of those points and the practical implications.

1. Tenancy Deposit Schemes – provisions in force from 26 March 2015

Since the Tenancy Deposit Scheme (TDS) legislation came into force on 6 April 2007, there have been a number of cases before the courts in which the wording of the legislation has been under scrutiny. The outcome of these cases left Landlords taking a cautious approach to the legislation to ensure that they would be able to serve a valid notice to end an assured shorthold tenancy (AST) under section 21 of the Housing Act 1988 (Section 21 Notice). The DA provides welcome clarification on the steps that a landlord must take to comply with the TDS legislation. All deposits ever taken which are still being held must now be protected. Once complete the deposit protection certificate and all prescribed information must be served on the Tenant. If any deposit has not been protected or returned to the Tenant a Section 21 Notice cannot be served.

2. Section 21 of the Housing Act 1988

The DA tidies up various aspects of the procedure whereby a landlord obtains possession under Section 21 of the Housing Act 1988.

2.1  It will no longer be possible to serve a Section 21 Notice until the Tenant has lived in the property for a minimum of four months. This is designed to stop Landlords serving a Section 21 Notice as soon as a Tenant moves in. As is currently the case, the notice can’t expire in any event before the end of any fixed term.

2.2  A Section 21 Notice will only be valid for six months from the date it was given. This means that if the Tenant doesn’t leave, possession proceedings must be commenced within six months of the service of the Section 21 Notice. Different rules apply where the notice period set out in the tenancy agreement is more than two months.

2.3  A Section 21 Notice will no longer be invalid if the date of possession given on it is not the last day of a tenancy period. This has traditionally been one of the main reasons that a Section 21 Notice fails. As long as a full two months’ notice is given, then unless another unconnected error is made, the Section 21 Notice will be valid.

2.4  Landlords will be unable to serve a Section 21 Notice in circumstances where it is in breach of its legal obligations to a Tenant. This includes obligations as to the condition of the property, the health and safety of the occupants and failure to provide an Energy Performance Certificate or a valid gas certificate for the property.

2.5  Where a Tenant has raised a complaint to the Landlord or Letting Agent in writing regarding the condition of the property, the following restrictions will apply against the service and reliance upon a Section21 notice:

2.5.1  If such a complaint is raised and no adequate response is received or such response is received but no action is taken to remedy the complaint, then the Tenant will need to complain to    the local authority. Until the local authority has decided whether to issue a Relevant Notice (e.g. improvement notice) on the Landlord for works to be carried out then a Section 21 Notice cannot be relied upon. If a Relevant Notice is served by the local authority, a section 21 notice cannot be served for six months from the date of that notice.

2.5.2  If the Landlord/Agent adequately responds within 14 days and the work is carried out this will have no impact on a Section 21 notice.

2.5.3  The Landlord will have a defence in these circumstances where the Tenant has failed to use the property in a Tenant like manner or the disrepair is due to a breach of the Tenant’s  obligations under the lease; where a mortgagee is seeking possession; or where the property is genuinely on the market for sale at the time the Section 21 notice is served.

2.6   When a Section 21 Notice is served, all rent that has been paid for any period where the Tenant ceases to live in the property must be repaid to the Tenant. This has implications where a Tenant who has paid their rent decides to leave when they receive the Section 21 Notice rather than when the notice expires. Where a Tenant pays a full month’s rent but then is required by the Section 21 Notice to vacate or voluntarily vacates mid-way through the month, the Tenant is entitled to be reimbursed the overpayment of rent for that period.

Should you require further information or advice regarding the issue raised in this article, please contact:

[team-member name=”Guy Coggrave”]

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