New Rules on Residential Property Letting

Introduction

New rules have come into effect on the 1st October 2015 regarding residential tenancies and in particular Section 21 Notices (notice requiring possession of an assured shorthold tenancy).
The changes are a combination of the Deregulation Act 2015 and the Assured Shorthold Tenancy Notice and Prescribed Requirements (England) Regulations 2015.

These changes will apply to all new assured shorthold tenancies in England starting on or after the 1st October 2015 and then by October 2018 to all assured shorthold tenancies in England.  By new that means new and not for example a statutory periodic tenancy arising on or after the 1st October 2015 but it does include a replacement/renewal tenancy (i.e. a fresh assured shorthold tenancy) granted on or after the 1st  October 2015.

Section 21 Notices and Time Limits

The main changes to the rules on Section 21 Notices are as follows:-

(i)         There is no need for any Section 21 Notice to expire on the last date of a period of a tenancy.  Two months notice is all that is required.  To accompany this is the requirement to repay the tenant pro-rata the “unused” proportion of any rent paid in advance when the Section 21 Notice expires in the course of a rent period and the tenant leaves.

(ii)         It will not be possible to give a Section 21 Notice in the first four months of a tenancy.  In the case of replacement tenancies (a new tenancy with the same parties and same premises as the previous tenancy) the relevant period is four months from the date on which the original tenancy began.  This will not be applicable to statutory periodic tenancies.

(iii)        A possession claim must be commenced within six months of the service of the Section 21 Notice.  For Section 21(4)(a) Notices, e.g. statutory periodic tenancy cases – the relevant period is four months from the date of expiry of the Notice.

Prescribed Legal Requirements

Under the new rules, Section 21 Notices can not be validly given unless:-

(i)         The tenant has been provided with the Energy Performance Certificate (“EPC”) for the property.  This probably has to be served before the commencement of the tenancy – but it might be possible to serve it after the start.  Clarity on this point is still required.

(ii)         The tenant has been provided with the current Gas Safety Certificate (“GSC”).  There does not appear to be a requirement to provide it within 28 days of the inspection but the rules appear to suggest the tenant should be provided with the latest report before a commencement of the tenancy.

Prescribed Information

Under the new rules Section 21 Notices can not be validly given unless the tenant has been given the prescribed information.  The prescribed information is the Department for Communities and Local Government booklet (“How to Rent: A check list for renting in England”).

However the rules appear here to be a little bit complicated.  The landlord does not have to provide a further copy whenever the booklet is updated, during the course of the tenancy.   However where a “new” replacement tenancy has been granted (including possibly a statutory periodic tenancy) there is no requirement to give a further copy unless a new version of the booklet has come out before the first day of the new tenancy.  A landlord is therefore going to have to keep up to speed with the changes with the booklet or else run the risk of falling foul of these provisions.

Retaliatory Eviction

Retaliatory eviction is the practice carried out by some landlords of serving a Section 21 Notice in order to evict tenants when the tenants ask for repair/remedial work to be undertaken to the property.  Under previous legislation, provided the Section 21 Notice was in proper form, validly served etc then the tenant had no defence to avoiding eviction here.  The tenant could not argue that he should not be evicted because say the property had not been in an habitable condition.  The new rules change things.  The substance of these rules is as follows:-

(i)         Where any inspection notice has been served by the local authority, or it has carried out emergency remedial action, the landlord will not be able to give a Section 21 Notice for six months; and

(ii)         If before a Section 21 Notice is given a tenant makes a complaint about the condition of the property is writing, then the landlord will have fourteen days within which to respond by setting out what he intends to do and the time frame.  If the landlord fails to reply, or replies by way of serving a Section 21 Notice or by way of an inadequate reply then the tenant may complain to the local authority who may wish to inspect the property.  If the local authority then serves an Improvement Notice or carries out emergency remedial action any Section 21 Notice already served will be rendered ineffective and no further notice can be served for six months.

Comment

Head of our Property Litigation Team, Daven Naghen, has considered these new provisions and says as follows:-

“The rules have added complexities/burdens to the landlord’s cause that are likely to trip up a number of landlords and lead to invalid/ineffective Section 21 Notices being served.

It is inevitable that many landlords will get caught out by the need to provide an EPC and GSC arguably before the tenant moves in.  The How to Rent booklet rules are fraught with danger for the landlord.  I am sure that landlords will fail to keep up with the new editions being published and the need to serve the new editions when there is a new tenancy (including possibly a statutory periodic tenancy).  Surely this could have been a “once only” provision?

The new provisions on Section 21 Notices make it impossible for a Section 21 Notice to expire on the last day of a six month fixed term as it can not be served within the first four months and two month’s notice must be given.

The time limit on using the Section 21 Notice for an order from the Court for a Possession Order or else losing it will not help landlords who are used to letting a Section 21 Notice hang over a tenant’s head for some time.

As for the retaliatory eviction provisions the whole process is effectively reliant upon the local authority.  If the local authority does not serve the appropriate notice, then the landlord can get away with the retaliatory eviction.  I can well foresee over-worked and under-resourced local authorities not being able to cope with the demand and act as required by a tenant.  Furthermore will tenants bombard local authorities with spurious claims in order to try and defeat a Section 21 Notice?  I am sure, rightly or wrongly, landlords will now face more complaints about the condition of their properties.

Overall I am sure that the new rules are going to lead to more contested Section 21 claims, negating the advantages of the accelerated possession proceedings process.  Courts are probably going to have to deal with a whole new raft of defended Section 21 claims.”

If you need help and advice on these new rules, or anything to do with a residential tenancy (either as a tenant or a landlord or landlord’s agent) then please contact Daven on 01775 722261 or email daven.naghen@maplessolicitors.com or visit our offices or arrange an appointment at 23 New Road, Spalding, Lincolnshire, PE11 1DH.