The Deregulation Act 2015 (the “Act”) marks the latest stage of government intervention in terms of the management of assured shorthold tenancies (AST). The Act received Royal Assent on 26 March 2015. Provisions clarifying the law relating to tenancy deposits were brought in immediately, as were additional rules relating to energy performance certificates.
Further provisions contained within the Act came into force on 1 October 2015. In terms of housing and development law, arguably the most significant and controversial change is that contained in section 33. Previously the landlord of an AST was at liberty to serve the tenant with a notice to quit under section 21 of the Housing Act 1988 to end the tenancy, provided it was within the terms of agreement and the landlord had protected the deposit correctly. This “accelerated procedure” meant that the fact that a landlord may not have complied with their repairing obligations under the tenancy was irrelevant for the purposes of whether the tenant could be evicted under section 21 (although the disrepair could still give rise to a separate contractual claim for compensation).
Under section 33 of the Act, a landlord can no longer serve a section 21 Notice if the following events have taken place:
- Prior to the landlord serving the section 21 Notice, the tenant had made a written complaint to the landlord regarding the condition of the property, and
- The landlord did not provide a response to that complaint within 14 days of the complaint being made or provided an inadequate response.
Following the amendments brought in by section 33 of the Act the service of a section 21 Notice by the landlord will now be deemed to be invalid if:
- The tenant had proceeded to issue a complaint to the local housing authority about the landlord’s failure to respond to its written complaint and;
- The local housing authority serves a remedial notice on the landlord in response to the tenant’s complaint.
Section 33(1) of the Act makes it clear that should a remedial notice be served by the local authority, a Section 21 Notice cannot be served within 6 months from the date of that notice (or if the notice is suspended, from the date the suspension is lifted). Should a section 21 Notice be served in breach of these provisions and a possession order sought, the court must strike out proceedings for that order (and presumably subsequent orders until the landlord complies with these requirements).
Clearly, the aim of these provisions is to protect tenants who, in complaining about disrepair, are subsequently served with a section 21 Notice by their landlord (so-called “retaliatory evictions”). It has been suggested that given the lack of affordable rental properties (particularly in London and surrounding areas), many tenants were living with disrepair through fear that if they complained they would be evicted. Understandably, however, the provisions have not gone down well with landlords who see it as further erosion of their powers to evict difficult tenants. For that reason there are safeguards contained within the Act which mean a section 21 Notice will be deemed to be valid if:-
- The complaint is made by the tenant after the service of a section 21 Notice by the landlord.
- The disrepair complained of has been caused by the tenant.
- A mortgagee is exercising a power of sale under a mortgage granted prior to the beginning of the tenancy.
- At the point at which the section 21 Notice was served the property was genuinely being marketed for sale.
It is worth noting that the new provisions will only apply to new tenancies which commence after 1 October 2015. Existing tenants will not have the benefit of these provisions until 1 October 2018. However, even with this in mind, the prospect of a disagreement between landlord and tenant in those new tenancies created post 1 October 2015 is considerably greater. Tenants may no longer fear eviction as they previously did and some may even use the opportunity to complain as a tactic to avoid eviction. Even in those cases where a complaint by the tenant is fully justified, landlords and tenants will often dispute the cause and extent of disrepair and what works ought to be undertaken to remedy it. This has the potential for increasing litigation. It is also likely to extend the workload for environmental health departments of local authorities who, once a tenant notifies them of their complaint to a landlord, will be required to attend the premises to inspect the alleged disrepair in order to decide whether to serve a relevant notice on the landlord. This is where we predict considerable potential delays in the system given the lack of resources at local authorities.
It will be interesting to observe the case law that develops from these provisions and the reaction of landlords to them. Landlords have long relied on the section 21 procedure to enable them to evict tenants quickly and on a no fault basis. Faced with a complaint for disrepair, landlords may now be forced to consider using their associated grounds for possession under the less certain and discretionary provisions contained in schedule 2 of the Housing Act 1988. What is almost certain is that the accelerated possession process will experience some considerable “de-acceleration” as a result of these new provisions.