Winston Jacob explains the complex changes to assured shorthold tenancy agreements that came into force on 1 October 2015
On 1 October 2015, the remaining provisions in the Deregulation Act 2015 (“the 2015 Act”) that relate to assured shorthold tenancies (“ASTs”) came into force. They make important changes to the procedure under section 21 of the Housing Act 1988 (“the 1988 Act”) for obtaining possession of a property let on an AST.
The new provisions are set out in sections 33 to 40 of the 2015 Act. Section 41 deals with their application. At present, the provisions apply only to ASTs granted on or after 1 October 2015; although they do not apply to a statutory periodic tenancy that arose under section 5(2) of the 1988 Act on or after 1 October 2015 on the coming to an end of an AST granted before that date. From 1 October 2018, the provisions will apply to all ASTs in existence at that time. However, as housing matters are now devolved to Wales, sections 33 to 40 apply only to ASTs of properties in England.
This article summarises some key elements of the new statutory provisions.
Prescribed legal requirements
Section 38 of the 2015 Act has inserted section 21A into the 1988 Act. The new provision prevents a landlord from serving a section 21 notice at a time when the landlord is in breach of a prescribed requirement. Regulation 2 of the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 (“the 2015 Regulations”) defines the prescribed requirements as those contained in regulation 6(5) of the Energy Performance of Buildings (England and Wales) Regulations 2012 and regulation 36(6) or 36(7) of the Gas Safety (Installation and Use) Regulations 1998.
A landlord therefore cannot serve a section 21 notice until he or she has given the tenant a valid energy performance certificate free of charge and a gas safety certificate.
Prescribed information relating to rights and responsibilities
Section 39 of the 2015 Act has inserted section 21B into the 1988 Act. The new provision enables the secretary of state to make regulations requiring a landlord or his agent to give his tenant information about the rights and responsibilities of a landlord and tenant under an AST.
Regulation 3 of the 2015 Regulations states that the information that must be given to the tenant is the version of the document entitled How to rent: the checklist for renting in England, as published by the Department for Communities and Local Government, that has effect for the time being.
A landlord cannot serve a section 21 notice at a time when the landlord is in breach of a requirement imposed by regulations made under section 21B(1). However, the regulations do not apply where the landlord is a private registered provider of social housing (regulation
3(5)(a) of the 2015 Regulations).
Form of section 21 notice
Section 37 of the 2015 Act has inserted section 21(8)-(9) into the 1988 Act. The new provisions enable the secretary of state to make regulations prescribing the form of a section 21 notice.
Regulation 4 of the 2015 Regulations has amended the Assured Tenancies and Agricultural Occupancies (Forms) (England) Regulations 2015 to insert a prescribed Form No 6A for use as a section 21 notice. The prescribed form applies only to an AST of a property in England granted on or after 1 October 2015. It does not apply to a statutory periodic tenancy that arose on or after 1 October 2015 on the coming to an end of an AST granted before that date.
Section 35 of the 2015 Act has inserted section 21(4ZA) into the 1988 Act. The new provision removes the requirement that the date specified in a notice under section 21(4) of the 1988 Act be the last day of a period of the tenancy.
Earliest date for service of a section 21 notice
Section 36 of the 2015 Act has inserted section 21(4B)-(4E) into the 1988 Act. A landlord is now unable to serve a section 21 notice within the first four months of an AST, or, in the case of a replacement AST, within four months of the start of the original AST (section 21(4B)(b)). The prohibition does not apply to a statutory periodic tenancy (section 21(4C)).
Latest date for issue of a claim for possession
A landlord may not begin a claim for possession under section 21 more than six months after service of the notice (section 21(4D)). This is subject to section 21(4E), which states that where notice is given under section 21(4) and section 21(4)(b) requires the date specified in the notice to be more than two months after the notice is given, a landlord cannot begin a claim for possession under section 21 more than four months after the date specified in the notice.
Repayment of rent
Section 40 of the 2015 Act has inserted section 21C into the 1988 Act. The new provision gives a tenant a statutory right to repayment of rent from a landlord. It applies where a tenant has paid rent in advance for a period of the tenancy, the tenancy is brought to an end before the end of that period as a result of a section 21 notice and the tenant was not in occupation for one or more whole days of that period. Section 21C(2) provides a statutory formula for calculating the amount of the repayment. If the landlord has not already made repayment when the court makes an order for possession under section 21, the court must order the landlord to repay the amount to which the tenant is entitled (section 21C(3)).
Preventing retaliatory eviction
Section 33(1) of the 2015 Act prohibits a landlord from giving a section 21 notice within six months of service of a relevant notice by the local housing authority. Where the operation of a relevant notice has been suspended, a section 21 notice cannot be given within six months of the end of the suspension (section 33(1)(b)).
A relevant notice is defined as a notice served under section 11 (improvement notices relating to category 1 hazards), section 12 (improvement notices relating to category 2 hazards) or section 40(7) (emergency remedial action) of the Housing Act 2004.
Furthermore, a section 21 notice may become invalid if a relevant notice is subsequently served (section 33(2)). A section 21 notice will thereby become invalid where (a) before the section 21 notice was given, the tenant made a complaint in writing to the landlord about the condition of the property; (b) the landlord did not respond within 14 days, provided an inadequate response, or gave a section 21 notice following the complaint; (c) the tenant then made a complaint to the relevant local housing authority about the same, or substantially the same, subject-matter as the complaint to the landlord; (d) the relevant local housing authority served a relevant notice in relation to the property in response to the complaint; and (e) if the section 21 notice was not given before the tenant’s complaint to the local housing authority, it was given before the service of the relevant notice.
Section 33(2) does not apply where the operation of the relevant notice has been suspended (section 33(9)).
The court must strike out a possession claim under section 21 if, before the order is made, a section 21 notice becomes invalid due to service of a relevant notice (section 33(6)). However, an order for possession made under section 21 must not be set aside on the ground that a relevant notice was served after the possession order was made (section 33(7)).
Section 33(1) does not apply in certain cases in which a relevant notice is wholly revoked or quashed or where specified decisions of the local housing authority relating to a relevant notice have been reversed (section 33(8)).
Subsections 33(1) and (2) do not apply where (a) the condition of the property that gave rise to the service of the relevant notice is due to the tenant’s breach of a duty to use the property in a tenant-like manner or an express term to that effect; (b) at the time the section 21 notice is given the property is genuinely on the market for sale; (c) the landlord is a private registered provider of social housing; or (d) the property is subject to a pre-tenancy mortgage, the mortgagee is entitled to exercise a power of sale conferred by the mortgage or section 101 of the Law of Property Act 1925, and at the time the section 21 notice is given the mortgagee requires possession of the property for the purpose of disposing of it with vacant possession in the exercise of that power (section 34).
Regulation, not deregulation
Despite its name, the 2015 Act has increased regulation of ASTs with complex provisions that are likely to prove a minefield to small-time landlords. Standard practices, such as serving a section 21 notice at the start of an AST, will have to change. Many landlords and their agents may be caught out before they adapt.
The rent repayment provisions in section 40 are confusing. They appear to assume that a landlord can end an AST merely by serving a section 21 notice. However, a landlord must obtain and execute a possession order before the AST ends (section 5(1)(a) of the 1988 Act). The retaliatory eviction provisions may lead to contested applications for adjournments by tenants seeking to persuade the local housing authority to serve a relevant notice and thereby end an otherwise unimpeachable possession claim. Whatever happens, expect more litigation.
Deregulation Act 2015, sections 33 to 40 – key points
- The new provisions only apply to ASTs of properties in England.
- For now, they only apply to ASTs entered into on or after 1 October 2015. From 1 October 2018, sections 33 to 40 will apply to all (English) ASTs in existence at that time.
- A landlord cannot serve a section 21 notice until the tenant has been given an energy performance certificate and a gas safety certificate.
- Unless the landlord is a private registered provider of social housing, the landlord cannot serve a section 21 notice until the tenant has been given How to rent: the checklist for renting in England.
- A prescribed form of section 21 notice (Form No 6A) must now be used.
- Generally, a section 21 notice cannot be given within the first four months of an AST and a landlord cannot start a possession claim after six months from service of the notice. Exceptions apply.
- A landlord can be prevented from serving or relying on a section 21 notice if a local housing authority serves a statutory notice following a tenant’s complaint about the condition of the property.
Winston Jacob is a barrister at Lamb Chambers
