As the Deregulation Bill 2015 makes its way through Parliament, Laura Bushaway and Zoe Athill examine the proposals which will affect Section 21 of the Housing Act 1988 under which landlords commonly obtain possession from assured shorthold tenants on a “no fault” basis at the end of their tenancy.

What are the key changes?

The proposed changes are:

  1. The introduction of a procedure to protect tenants from the process of “retaliatory eviction”. In those circumstances, landlords cannot serve valid Section 21 Notices to terminate an assured shorthold tenancy (AST) if:-
    1. The tenant has made a written complaint before service of a Section 21 Notice to the landlord regarding the condition of the property; and
    2. The landlord has not provided an adequate written response within 14 days; and
    3. The tenant has complained to the local authority which serves an Improvement Notice or Emergency Remedial Notice.
  2. To  prevent Section  21  Notices  being  served within  the  first  4  months of  a  tenancy.

Landlords will no longer be able to serve Section 21 Notices at the beginning of the tenancy to terminate at the end of the tenancy (often 6 months or 12 months later).

  1. The introduction of a prescribed form Section 21 Notice and the removal of the need for a landlord to specify in the notice the exact date a tenancy comes to an end.
  2. Where a landlord has failed to comply with certain legal obligations (for example relating to health and safety, the condition of the property or energy performance) no valid Section 21 Notice can be served whilst the landlord is in breach.
  3. The ability for regulations to be made concerning prescribed information to be given to tenants at the outset of an AST regarding the rights and responsibilities of landlords and tenants.

An additional safeguard for tenants?

In order for a tenant to rely upon the protection of the provisions to avoid retaliatory eviction, it is necessary for each part of the 3 stage test to be met. Therefore, if a tenant has made a written complaint about the condition of the property but the local authority has not served an Enforcement/Improvement Notice, the landlord remains able to serve a valid Section 21 Notice. The Section 21 procedure also remains available to a landlord if the tenant contributed to the disrepair which resulted in the service of an Enforcement/Improvement Notice.

However, the Court must strike out any possession proceedings if a Section 21 Notice upon which they were issued becomes invalid as a result of the above test. Whether this means that possession hearings could be adjourned pending Improvement Notices being served and thereby delayed remains to be seen.

When will the changes apply?

The new provisions will only apply to ASTs which are entered into after the provisions come into force, initially. However, after 3 years the provisions will then become applicable to all ASTs.

As at today’s date (23 March 2015), the Deregulation Bill has reached the final stage and is awaiting Royal Assent. It is not yet clear when it will come into force but we will be monitoring developments.

Impact?

The biggest change is likely to be the procedure to protect tenants from “retaliatory eviction”. However, each element of the 3-stage test will have to be met cumulatively to prevent a landlord from serving a valid Section 21 Notice. The practical implications in terms of restricting a landlord’s ability to remove a tenant at the end of the term may therefore in reality be limited. However, landlords will need to keep up to date with what is required of them and the proposed changes will introduce additional time constraints to the Section 21 process. Landlords will need to act promptly to deal with tenants’ complaints and be much more diligent about the condition of their property.

From a tenant’s point of view, the proposed changes should provide some additional protection as well as better clarity of their rights if the proposed requirements for prescribed information to be given are implemented.