The Deregulation Act 2015 (the “Act”) was passed on 26 March 2015 and contains a number of changes that will impact on landlords of residential property.
As is now widely known, earlier this year the Act imposed some crucial changes to the legislation relating to tenancy deposits. This subject has received rather a lot of coverage, so in this article we look at the other changes brought about by the legislation. Some of these will take effect on 1 July (Sections 37-39) and the remainder on 1 October 2015. The Act will initially apply to Assured Shorthold Tenancies (“AST”) created after that date and to all ASTs from 2018.
Retaliatory Evictions (Section 33)
The provisions relating to retaliatory evictions are intended to address instances where a landlord serves a Section 21 notice seeking possession in response to a tenant having made a complaint about the condition of the property. Under the Act, a valid Section 21 notice cannot be served where:
- A tenant has made a written complaint to the landlord concerning the condition of the property;
- A landlord has not responded within 14 days or the response is inadequate (i.e. the landlord does not set out a proposed course of action and a reasonable timescale); and
- A local authority has served an enforcement notice.
If an enforcement notice is served, a landlord will be unable to serve a Section 21 notice for a period of six months (although there are some exceptions under Section 34, notably where the condition of the property is due to the tenant’s breach). Whilst the new provisions clearly offer extra protection to tenants against retaliatory evictions, a landlords’ ability to recover possession of their property is further restricted.
Timing and form of a Section 21 notice (Sections 35-39)
A landlord will no longer be able to serve a Section 21 notice within the first four months of the contractual term of the tenancy. This is to stop landlords and their agents serving notice at the commencement of a tenancy with a view to being able to terminate it at their convenience. Further changes mean that landlords may not be able to serve a valid Section 21 notice if they are in breach of legislation relating to the condition of the property, health and safety of occupiers and energy performance.
A new prescribed form of Section 21 notice is expected and there will no longer be a requirement for the date specified in the notice to be the last day of the period of the tenancy. Crucially, Section 21 notices will have a “shelf life” of just six months. Following the expiry of the six-month period, should a landlord wish to issue court proceedings, a fresh notice will need to be served.
The last notable change is that, where a Section 21 notice has been served and a possession order is granted, Section 40 will give the tenant a statutory right to seek a refund of rent paid in advance for the period after determination of the tenancy.
A Section 21 notice will no longer necessarily be the most obvious and straightforward route to possession for residential landlords.