For landlords in the private residential rental sector, having the right to regain control of your property when you need to is a vital power.
For landlords in the private residential rental sector, having the right to regain control of your property when you need to is a vital power. Section 21 of the Housing Act 1988 allows landlords to end an assured shorthold tenancy by serving notice, without having to show any fault on the part of the tenant. Andrew Raby, landlord and tenant lawyer outlines amendments to section 21 introduced from 1 October 2015 and warns of new traps for unwary landlords.
Key changes to section 21
The amendments to section 21 affect three key areas:
- the form of the notice; and
- timing, specifically for serving the notice and starting possession proceedings.
There are also new rules requiring rent paid in advance to be repaid; and measures to stop landlords from evicting tenants who complain about the condition of the property.
Which tenancies are affected?
Housing matters in Wales are now devolved, so these changes apply only to tenancies in England. The new rules currently affect assured shorthold tenancies granted on or after 1 October 2015, but not ‘continuation’ tenancies that arise automatically if a tenant stays on after the initial fixed term ends. Continuation tenancies will be affected from 1 October 2018. Until then, landlords will need advice on what sort of assured shorthold tenancy they are dealing with before relying on section 21.
You cannot serve a section 21 notice unless you have given the tenant:
- a valid Energy Performance Certificate free of charge;
- a gas safety certificate where relevant; and
- a copy of the government’s tenant booklet, How to Rent: the checklist for renting in England.
The landlord must also protect the tenant’s deposit in one of the official tenancy deposit protection schemes and provide the tenant with certain prescribed information. This is not new but remains a key compliance issue for landlords who want to use section 21.
Form of notice
A section 21 notice must now be in a prescribed form. Landlords will be pleased to hear that the rules on exactly when the notice period must end have been relaxed, which removes a key area of uncertainty.
The new rules on timing may create new traps for landlords. For example, it is no longer possible to serve a section 21 notice at the beginning of a new assured shorthold tenancy. Four months must have passed since the tenancy was granted. Where a subsequent assured shorthold tenancy has been granted, the timing of the notice is linked to the original.
Another potential trap is that once a section 21 notice has been served, the landlord now has only six months to apply for possession.
Landlords will need their legal advisors on board to make sure no key deadlines are missed.
Repayment of rent
The new rules mean that if the tenancy ends because of a section 21 notice, the landlord has to repay rent if the tenant:
- has paid in advance for a period; and
- is not in occupation for one or more whole days of that period.
The amount to be repaid is calculated by reference to a formula in the legislation.
The government has acted on reports that unscrupulous landlords have been using section 21 to evict tenants who complained about the state of the property. If a landlord fails to act on a tenant’s complaint and the local housing authority takes enforcement action, the new rules restrict the landlord’s ability to serve a section 21 notice. Landlords will need advice on the type of complaints that are relevant and the precise rules on when a section 21 notice may be served.
Better for tenants – but not landlords?
The government’s aim was to improve the renting experience for tenants. Landlords now have new hoops to jump through, so they need to understand the new rules to stay in control of their property.
For more advice on how to evict a tenant or any other landlord and tenant law problem, contact Andrew Raby.