THE DEREGULATION BILL 2015

The Deregulation Bill 2015 is making its way through Parliament and may gain Royal Assent before the dissolution of Parliament on 30 March 2015.  It contains a number of significant measures in relation to Assured Shorthold Tenancy agreements (“ASTs”).

(a) Section 21 Notices

Retaliatory Eviction

As matters stand, the Bill will prevent landlords from effecting “retaliatory eviction", which can occur where a tenant makes a complaint (typically about state of repair) and the landlord responds by serving a section 21 notice to terminate the tenancy.  As the Bill stands, where the tenant has made a written complaint to the landlord about the state of repair of the property, and the landlord has either failed to respond, given an inadequate response, or responded by serving a section 21 notice, the tenant can then prevent eviction by contacting the local housing authority, which may then serve certain types of enforcement notice on the landlord.  The landlord would not be able to serve a new section 21 notice within six months of an enforcement notice being served.

How the timing of the procedure works out may in practice be difficult to predict, since it relies upon the local authority inspecting and serving an enforcement notice within a relatively short timescale.  Authorities are likely to find themselves under pressure.

Service of section 21 notice at start of tenancy

The Bill will limit a landlord's ability to serve a section 21 notice at the start of an AST, requiring that it cannot be given earlier than four months after the beginning of the tenancy.  Moreover, a section 21 notice will need to be used as the basis for a possession claim within six months of being served, or it will effectively fall way, and the landlord will need to serve a new one in order to obtain possession.

Prescribed form

There is to be a prescribed form of section 21 notice with no need to specify a termination date coinciding with the last day of a rental period (the latter point gives statutory effect toSpencer v Taylor).

(b) Deposits 

The Bill incorporates various clarifications of the Tenancy Deposit Scheme:

  • Where a deposit was paid in respect of a fixed term AST before 6 April 2007 which then became a statutory periodic AST after 6 April 2007, the landlord will not be jeopardised if it protects the deposit and provides the relevant prescribed information within 90 days of the Bill gaining Royal Assent (this is a response to the case of Superstrike v Rodrigues);
  • Where a deposit was paid after 6 April 2007 and placed in a TDS and the prescribed information served, then upon that AST becoming a statutory periodic tenancy the landlord's compliance with the TDS legislation in respect of the original AST will suffice for the purposes of the statutory periodic tenancy.  These amendments confer no protection on those landlords who never protected the deposit during the original tenancy.  
  • Landlord of a tenancy that became periodic before the tenancy deposit scheme came into force on 6 April 2007 should protect those deposits (confirming Charalambous v Ng).  The legislation confirms that there is no financial penalty for failure to do so; 
  • It is acceptable to give the details, in the Prescribed Information, of an agent who protected the deposit for the landlord, instead of the landlord itself.  

(c) Additional miscellaneous provisions

Suspending the eviction

Eviction of a tenant is to be suspended where the landlord has failed to comply with certain legal obligations including failure to comply with requirements relating to Energy Performance Certificates and Gas Safety Certificates.

Landlord obliged to provide information

The landlord is to be obliged to provide information about the respective rights and responsibilities of both the landlord and the tenant under an AST.

Claim repayment of rent

There will be a procedure for tenant to claim back rent paid in advance in respect of a period falling after a section 21 notice brings the tenancy to an end.