Section 21
The Deregulation Act 2015 makes amendments to Section 21 of the Housing Act 1988 and below is a summary of the provisions which apply in England. At the time of writing the changes in relation to section 21 do not apply to tenancies in Wales and existing procedures should be followed.
The Deregulation Act provides a provision for a prescribed section 21 form to be introduced (s37). The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) (Amendment) Regulations 2015 SI 1725 introduce a new prescribed section 21 form must be used for assured shorthold tenancies (ASTs) granted in England on or after 1st October 2015.
The new prescribed section 21 form cannot be issued to the tenant within the first four months of the original tenancy or where certain prescribed requirements have not been met.
The Deregulation Act 2015 (s41) also states that s37 will apply to all ASTs in England from 1st October 2018 which causes some confusion as to what the position is from 1st October 2018. At the time of writing the regulations detailing the Form 6A (The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015) only apply to ASTs granted in England on or after 1st October 2015 and Form 6A on the face of it states that ‘it must be used for all ASTs created on or after 1 October 2015 except for statutory periodic tenancies which have come into being on or after 1 October 2015 at the end of fixed term ASTs created before 1 October 2015. There is no obligation to use this form in relation to ASTs created prior to 1 October 2015, however it may nevertheless be used for all ASTs.’ It is therefore unclear as to whether the Form 6A must be used for all AST tenancies in England from 1st October 2018.
At the time of writing, the Ministry of Housing, Communities & Local Government have advised the Letting Centre that ‘although there is a power to extend the prescribed Section 21 Form 6A, under s.41(3) of the Deregulation Act 2015, from 1 October 2018, there are currently no plans to do so.This means that Form 6A will continue to be required only for tenancies begun after October 2015.’
Although it is the intention that Form 6A is only required for ASTs granted in England on or after 1st October 2015 it would be advisable to use it for all ASTs in England in order to avoid any issues at court.
You can access the Letting Centre section 21 forms by purchasing our Statutory Notices and Forms or if you are already a member you can access them in the download area under ‘My Account.’
Prescribed requirements
For ASTs granted on or after 1st October 2015 landlords will not be able to serve a section 21 notice where they have not provided the tenant with a copy of the energy performance certificate, the gas safety certificate and a copy of the Department of Communities and Local Government’s How to Rent Guide.
The law hasn’t changed regarding energy performance certificates (e.g. to be provided free of charge to any prospective tenant) and gas safety certificates (to be provided within 28 days of completion of the annual check or to new tenants before they move in) as landlords already have to provide these to the tenant under existing legislation, where required. The amendment is that a section 21 notice can only be given to the tenant if they have received these documents from the landlord in accordance with the legislation. See Lfacts 21 for more information.
A new requirement is that landlords now have to provide the tenant with a copy of the How to Rent Guide mentioned above in hard copy or by email for ASTs granted on or after 1st October 2015. There is no requirement to re-issue the guide during the tenancy if a newer version becomes available but landlords will be required to re-issue the up to date version upon renewal of the tenancy or where a new tenancy is granted. Our understanding is that this will include statutory periodic tenancies. If the How to Rent Guide has not changed since it was last issued to the tenant landlords are not currently required to re-issue the guide upon renewal. Landlords will not be able to serve a section 21 notice until they have provided the tenant with a copy of the How to Rent Guide.
Landlords and agents will only be able to email the How to Rent Guide to the tenant where the tenant has agreed to accept service of documents by email. We have amended our tenancy agreements and guidance notes to include a clause to allow for this and have also produced an example document checklist which can be used alongside our agreement, or separately, as proof of evidence that the tenant has received documentation and agreed to accept service by email.
Section 38 of the Deregulation Act 2015 states ‘a notice under subsection (1) or (4) of section 21 may not be given in relation to an assured shorthold tenancy of a dwelling-house in England at a time when the landlord is in breach of a prescribed requirement. The requirements include those which relate to the condition of dwelling-houses or their common parts, the health and safety of occupiers of dwelling-houses, or the energy performance of dwelling-houses.’
Landlords and agents also need to ensure that they have complied with existing legislation prior to issuing a section 21 notice including tenancy deposit protection legislation and, where a property requires a licence, you should make sure that the property is licensed to ensure valid service of a section 21 notice.
The Deregulation Act 2015 provides that the prescribed requirements will apply to all AST tenancies in England from 1st October 2018 but The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015, which set out the prescribed requirements, state that they only apply to AST tenancies in England granted on or after 1st October 2015 and not to statutory periodic tenancies that came into being on or after 1st October 2015 at the end of an AST which was granted before that date. This provides a grey area and further clarification is required. County Court judges may also interpret their own meaning of the current legislation which makes it difficult to understand what will be required from 1st October 2018. Our recommendation is to ensure compliance with the requirements for all AST tenancies and obtain proof of receipt from the tenant.
Periodic Tenancies
Section 35 of the Deregulation Act removes the requirement for a section 21(4) notice to end a periodic tenancy on the last day of a period of the tenancy for all ASTs in England.
Section 21 Notice Time Limits for all AST tenancies in England
Where two months’ notice is required for periodic or fixed term tenancies the landlord has 6 months from the date of issue of the s21 notice to commence possession proceedings. Where more than two months’ notice is required for a periodic tenancy the landlord has four months from the date of expiry of the s21 notice to commence possession proceedings (section 36 Deregulation Act 2015).
Repayment of Rent where the tenancy ends before end of a period
Section 40 of the Deregulation Act provides a statutory requirement for repayment of rent to the tenant for all AST tenancies in England where as a result of service of a notice under section 21 the tenancy is brought to an end before the end of a period of the tenancy, the tenant has paid rent in advance for that period, and the tenant was not in occupation of the property for one or more whole days of that period. It is not clear as to what is meant by s40 as a s21 notice does not end a tenancy it is the bailiff executing a possession order after service of the notice that ends the tenancy. We would guess that this section has been introduced for periodic tenancies where the notice given expires before the end of a rent period and the tenant would be entitled to a refund for the rent paid in advance for the period that they were not in occupation but, as stated, it is not clear.
Retaliatory Eviction
Landlords will not be able to serve a section 21 notice for a period of six months following service of a disrepair notice from the local authority. A section 21 notice will be invalid where it has been given after the tenant’s complaint regarding the condition of the dwelling house and the landlord has failed to provide an adequate written response within 14 days of the complaint (section 33 Deregulation Act 2015).
See Lfacts 21 for more information.
Tenancy Deposits
The case of Superstrike has been clarified under the Deregulation Act which received Royal Assent on 26th March 2015. The Deregulation Act confirms that any deposits received prior to 6th April 2007 where the tenancy has been renewed or becomes statutory periodic after 6th April 2007 must be protected in one of the three statutory schemes and the prescribed information issued to the tenant. Landlords must protect any deposits held in connection with a renewal or statutory periodic tenancy which commenced after 6th April 2007 and issue the prescribed information by 23rd June 2015 or, if earlier, before the first day (after commencement of the Act) on which a court does any of the following in respect of a periodic tenancy:
a) determines an application or an appeal against a determination under section 214;
b) makes a determination as to whether to make an order for possession in proceedings under section 21 of the Housing Act 1988 or decides an appeal against such a determination.
Where the landlord fails to comply with the requirements a penalty of between one and three times the deposit will be payable and the landlord will not be able to service a section 21 notice until he has complied.
For post April-2007 tenancies, where the landlord protected the deposit and issued the tenant with the prescribed information in relation to the initial fixed term tenancy there is no need to re-protect or re-issue when the tenancy is renewed or becomes statutory periodic where the tenancy deposit continues to be protected.
The Deregulation Act also confirms the decision in the Court of Appeal case Charalambous & Anor v Maureen Rosairie Ng & Anor [2014] where the deposit was received prior to 6th April 2007 and the statutory periodic tenancy commenced prior to 6th April. In this case the judge held that the deposit should have been protected within an authorised scheme prior to issuing the section 21 notice in accordance with Section 215(1) (a) which states that ‘if a tenancy deposit has been paid in connection with a shorthold tenancy, no section 21 notice may be given in relation to a tenancy at a time when the deposit is not being held in accordance with an authorised scheme.’ No penalty will be payable in this situation.
Landlords should protect all deposits held on assured shorthold tenancies in connection with a fixed term or statutory periodic tenancy, whether received before or after 6th April 2007, to ensure valid service of a Section 21 Notice. An alternative would be to return the deposit to the tenant prior to serving the Section 21 Notice. Further information is available in the Letting Handbook or you can download the regulations at www.legislation.gov.uk