The Deregulation Act 2015 is now in force and has made some significant changes for assured shorthold tenancies which we have summarised below.

Changes to tenancy deposits apply to all ASTs, but the remaining changes apply only to those granted on or after 1 October 2015 (although they will come into force for all other ASTs in three years’ time).

Landlords need to ensure they are aware of the new rules , to avoid encountering problems especially when looking to end the tenancy with a s21 notice.

Changes which apply to all ASTs

Changes to the Tenancy Deposit Scheme (“TDS”) 

Following the uncertainties of the existing law especially following the Superstrike case, DA 2015 provides some welcome clarity and simplification, although this is still quite a technical area.  

There are two key concepts in dealing with the rules regarding tenancy deposit schemes: (i) protecting the deposit itself on an approved TDS and (ii) providing prescribed information to the tenant about the scheme and confirmation that the deposit has been protected.

There are three main scenarios to highlight:

  • Tenancies created prior to 6 April 2007

The TDS rules only apply to deposits in respect of AST’s commencing on or after 6 April 2007. However, where (i) the tenancy began as a fixed term tenancy before this date and (ii) there was an unprotected deposit taken  and (iii) the tenancy became a statutory periodic tenancy on or after 6 April 2007 then on the tenancy becoming periodic the deposit was required to be registered and the prescribed information given to the tenant. An initial “grace period” to resolve this has now elapsed.

  • Tenancy created on or after 6 April 2007

For any AST created on or after 6 April 2007, any deposit to be protected in an approved TDS and the prescribed information given to the tenant.

  • Fixed term commenced on or after 6 April 2007, the deposit was protected at the time but a statutory periodic tenancy has subsequently arisen

The Housing Act 1988 has been amended so that where the landlord has complied with its TDS obligations once, they will not need to repeat them for a replacement/periodic tenancy. This reverse the decision in Superstrike and removes a trap for unwary landlords but which did nothing to really benefit tenants.

Consequences of breach

If deposits have not been protected  when they are required to be (within 30 days of receipt of the deposit unless one of the “grace periods” applies)  then no valid s21 notice can be served unless the despot has been repaid in full to the tenant.

If the prescribed information has not been provided to the tenant within 30 days of receipt of the  deposit  (or if the landlord cannot prove that it has been) then no valid s21 notice can be served until the information is provided to the tenant.

If either the despot is not protected in time or if the prescribed information is note given in time, the landlord can also be liable to pay the tenant a “fine” of up to 3 times the amount of the deposit.

Changes which apply to ASTs granted on or after 1 October 2015

The new rules set out below for s21 notices, rent refunds, retaliatory evictions and provision of information will only apply to new assured shorthold tenancies (“AST”) entered into on or after 1st October 2015. However, from 1/10/18 these new rules will apply to all ASTs. 

Timing of s21 notices

  • No valid s21 notice can be served within the first 4 months of the start of the tenancy. The practice of serving a s21 notice at the same time as the tenant signs the tenancy agreement can no longer be followed (s21(4B) HA 1988). 
  • Once a Section 21 notice has been given, possession proceedings must be commenced within 6 months from the date on which the notice was given, which will usually mean with 4 months of the possession date stated in the notice (s21(4D) HA 1988).
  • The rule for periodic tenancies that the s21 notice must “expire” on the last day of a period of the tenancy has been dropped. 

Prescribed form of s21 notice 

Previously there was no prescribed for of s21 notice. There is now a standard prescribed form which must be used  and applies to both fixed term and periodic tenancies. There were errors in the initial prescribed form, resulting in a new one having been issued.

Prescribed Information to be given to tenants

There are some new rules for information to be provided to tenants at the start of a new tenancy. A s21 notice will not be valid unless this info has been provided to the tenant before the notice is served. The information to be provided to the tenant is:

Prescribed Information to be given to tenants

There are some new rules for information to be provided to tenants at the start of a new tenancy. A s21 notice will not be valid unless this info has been provided to the tenant before the notice is served. The information to be provided to the tenant is:

Apportioned rent refunds

Where as a result of the service of a s21 notice an AST is brought to an end before the end of a period of the tenancy and the tenant has paid rent in advance for that period he is entitled to an apportioned refund for each full day. So, for example, if your tenant paid a full months’ rent on 1 November but vacated on 18th November following your s21 notice then the tenant is entitled to be refunded 12 days’ worth of rent. How often this scenario will actually arise remains to be seen!

Prohibiting “retaliatory evictions”

This new measure is designed to prevent tenants from being evicted. who have made genuine complaints about disrepair, to which the landlord has not properly responded. It does not apply to private registered providers of social housing (s34(3) DA 2015).

Where a local authority has served an enforcement notice under Housing Act 2004 then no s21 notice may be served within six months of the date of that enforcement notice or, if the operation of the notice has been suspended, for six months after the suspension ends.

The reminder of the section is a little complicated. 

The conditions to be satisfied before an eviction is treated as being  “retaliatory” are as follows:

  • Before the service of a s21 notice, a tenant has complained in writing to the landlord regarding the condition of the property; and
  • (i) The landlord failed to respond within 14 days beginning with that date on which the complaint was given; OR (ii) the landlord responded by serving a s21 notice; OR (iii) the landlord failed to provide a written response which was “adequate"; and
  • The tenant  then complained about the same issue to its local authority; and

The requirement for notice in writing to the landlord is waived if the tenant does not know the landlord’s address and made reasonable efforts to  contact the landlord to complain  - s33(4) and (5) DA 2015.

“Adequate” means a response in writing which sets out action the landlord proposes to take to deal with the complaints and set out a reasonable timescale within which that action will be taken (s33(3). Ultimately a Court would need  to  decide if a response was adequate and a timescale reasonable.

If these conditions are satisfied (and subject to the exceptions below) then a s21 notice will be invalid.

The legislation is slightly clumsily worded but it appears to be the intention that if a s21 notice is served part way through the process, for example before the local authority served its enforcement notice, then the subsequent service of that enforcement notice would operate to then render the s21 notice invalid.

Section 21 notices will not be invalid where one of the exceptions applies:

  • where the disrepair was caused by the tenant’s failure to act in a tenant-like manner (eg the tenant has caused the damage);
  • where at the time of service of the Section 21 notice, the dwelling house is genuinely on the market for sale (not including an alleged intention to sell to an associated person or business partner)
  • where the landlord is a private registered provider of social housing; and
  • where there is a mortgage granted before the start of the tenancy and the lender wishes to exercise its power of sale.