The Deregulation Act 2015 (“the 2015 Act”) has made largescale changes to the legislative protection available to tenants of properties let on assured shorthold tenancies (“ASTs”).
One effect has been to put further hurdles in the path of a landlord wishing to recover possession of a property from such a tenant using s. 21 of the Housing Act 1988 (“the 1988 Act”). On 1 October 2015, the remaining provisions of the 2015 Act relevant to the s. 21 procedure came into force. This article summarises the consequent pre-requisites to and restrictions on a landlord’s recovery of a property let on an AST via s. 21 of the 1988 Act.
It is crucial that landlords and letting agents acquaint themselves with the legislative changes. Otherwise they may inadvertently serve invalid notices thus delaying the landlord’s recovery of the property. Importantly, given that housing matters are now devolved to Wales, most of the amendments brought into effect by the 2015 Act will apply only to properties in England.
A landlord of an AST must protect a tenancy deposit in an authorised tenancy deposit scheme within 30 days of receipt (s. 213(3) of the Housing Act 2004 (“the 2004 Act”)). The period of 30 days was substituted for a period of 14 days by s. 184 of the Localism Act 2011 (“the 2011 Act”) with effect from 6 April 2012.
As a general rule, no landlord who has received a tenancy deposit from a tenant can serve a s. 21 notice until the deposit has been protected in a deposit scheme. The 2015 Act has amended s. 215 of the 2004 Act to explicitly state that this requirement applies to ASTs entered into before 6 April 2007, thus giving effect to the Court of Appeal’s decision in Charalambous v Ng  EWCA Civ 1604,  1 WLR 3018. A landlord of such a tenancy may protect the deposit late and still serve a s. 21 notice.
The position is different in respect of ASTs entered into on or after 6 April 2007. A landlord of such a tenancy who has received a deposit cannot serve a s. 21 notice unless the deposit was protected within 30 days of receipt (s. 215(1A)).
There are important exceptions to this rule in the case of certain existing tenancies where the deposit has already been protected in an authorised scheme. The exceptions are provided for by ss. 215A and 215B of the 2004 Act and art. 16 of the Localism Act 2011 (Commencement No. 4 and Transitional, Transitory and Saving Provisions) Order 2012. Sections 215A and 215B of the 2004 Act are new and were inserted into that Act by s. 32 of the 2015 Act.
Section 215(1A) is particularly problematic for landlords of tenancies entered into after 6 April 2007 who failed to protect a deposit within 30 days of receipt and who cannot rely on any of the statutory exceptions. Such landlords can, however, still avoid the prohibition on service of a s. 21 notice if they return the deposit to the tenant in accordance with s. 215(2A) of the 2004 Act.
A landlord who has received a tenancy deposit is unable to serve a s. 21 notice until he/she has served on the tenant prescribed information relating to the deposit scheme.
Section 30 of the 2015 Act has amended the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (“the 2007 Order”). It is now explicit that the prescribed information can contain the landlord’s agent’s details and the agent can sign the certificate required by art. 2(1)(g)(vii).
Section 32 of the 2015 Act has inserted s. 215B into the 2004 Act. The new section makes it clear that once a landlord has served the prescribed information he/she is not required to re-serve it if the tenancy is subsequently renewed or rolls over into a statutory periodic tenancy. So long as the deposit remains protected in accordance with the same authorised scheme, the landlord and tenant remain the same and the property let under both tenancies is the same or substantially the same, the requirements of s. 213(3), (5) and (6) are treated as if they had been complied with by the landlord in relation to the deposit.
The amendments to the 2007 Order and s. 215B are retrospective and treated as having applied since 6 April 2007, subject to an exception in relation to claims under s. 214 of the 2004 Act or s. 21 of the 1988 Act which were settled or finally determined before 26 March 2015.
Section 38 of the 2015 Act has created a new s. 21A to the 1988 Act that prevents a landlord from serving a s. 21 notice relating to an AST of a property in England when the landlord is in breach of a prescribed requirement.
The prescribed requirements are to provide the tenant with an energy performance certificate and a gas safety certificate (reg. 2 of the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 (“the Prescribed Requirements Regulations 2015”)). A landlord cannot serve a s. 21 notice until the tenant has received these documents.
The Prescribed Requirements Regulations 2015 apply to an AST granted on or after 1 October 2015, unless it is a statutory periodic tenancy that arose on the coming to an end of an AST that was granted before that date (reg. 1(3)-(4)).
Section 39 of the 2015 Act has created a new s. 21B to the 1988 Act. In conjunction with reg. 3 of the Prescribed Requirements Regulations 2015, it prevents a landlord of a property in England from serving a s. 21 notice until the tenant has been provided with a copy of the Department for Communities and Local Government’s booklet entitled “How to rent: the checklist for renting in England”.
This requirement does not apply where the landlord is a private registered provider of social housing.
The 2015 Act has left unchanged the prohibition on serving a s. 21 notice in relation to an AST of a part of an unlicensed HMO so long as it remains such an HMO (s. 75 of the 2004 Act).
Section 33 of the 2015 Act prohibits a landlord of a property in England from giving a s. 21 notice within 6 months beginning with the day of service of a relevant notice by the local housing authority.
A relevant notice is defined as a notice under s. 11 (improvement notices relating to category 1 hazards), s. 12 (improvement notices relating to category 2 hazards) or s. 40(7) (emergency remedial action) of the 2004 Act. Where the operation of such a notice has been suspended, the landlord cannot give a s. 21 notice within 6 months beginning with the day on which the suspension ends.
The above provisions do not apply in certain circumstances (s. 33(8)). These include where a relevant notice has been wholly revoked under s. 16 of the 2004 Act as a result of the notice having been served in error and where the relevant notice has been quashed under para. 15 of Sch. 1 to that Act.
In addition, an initially valid s. 21 notice may now become invalid if the local housing authority serves a relevant notice in response to a compliant by the tenant about the condition of the property (s. 33(2)). The tenant must first have complained to the landlord, before being given the s. 21 notice, regarding the condition of the property at the time of the complaint. The landlord must then have either failed to provide an adequate response within 14 days or given a s. 21 notice following the complaint. The tenant’s compliant to the local housing authority must be about the same or substantially the same subject-matter as the complaint to the landlord. If the s. 21 notice was not given before the tenant’s complaint to the local housing authority, it must have been given before service of the relevant notice.
Note that a s. 21 notice may now be valid at the date a claim for possession is issued but become invalid (upon service of a relevant notice) before the claim is finally determined. If a s. 21 notice becomes invalid during proceedings, the court must strike out the possession claim (s. 33(6)). However, the court must not set aside a possession order made under s. 21 of the 1988 Act on the ground that a relevant notice was served after the landlord obtained the order (s. 33(7)).
In certain situations, the prohibitions on service of (s. 33(1)) and reliance on (s. 33(2)) a s. 21 notice do not apply. These are (a) if the condition of the property that gave rise to service of a relevant notice is due to a breach by the tenant of the duty to use the property in a tenant-like manner or an express term in the tenancy to that effect (s. 34(1)); (b) if the property is genuinely on the market for sale (s. 34(2)); (c) if the landlord is a private registered provider of social housing (s. 34(6)); and (d) if the property is subject to a mortgage entered into before the tenancy, the mortgagee is entitled to exercise a power of sale and at the time the s. 21 notice is given the mortgagee requires possession in order to dispose of it with vacant possession in the exercise of that power (s. 34(7)).
Section 33 and 34 of the 2015 Act contain complex provisions, which should be considered in detail in any individual case to ascertain if and how they apply.
From 1 October 2015, there is for the first time a prescribed form for a s. 21 notice. Section 37 of the 2015 Act inserted a new s. 21(8) into the 1988 Act which gave the Secretary of State power to make regulations prescribing the form of a s. 21 notice relating to a property in England. Form No. 6A has been so prescribed by reg. 3(fa) and the Schedule to the Assured Tenancies and Agricultural Occupancies (Forms)(England) Regulations 2015 (“the 2015 Forms Regulations”).
The obligation to use Form No. 6A applies to any AST granted after 1 October 2015, unless it is a statutory periodic tenancy that came into being under s. 5(2) of the 1988 Act on the coming to an end of an AST that was granted before that date. There will therefore continue to be many cases in which the landlord is not required to use the prescribed form. Furthermore, even when a landlord is required to use Form No. 6A, a s. 21 notice that is not in that form but which is in a form substantially to the same effect should be acceptable by virtue of reg. 2 of the 2015 Forms Regulations.
Section 35 of the 2015 Act removes the requirement that a s. 21 notice under s. 21(4) of the 1988 Act (periodic tenancies) must expire on the last day of a period of the tenancy. The removal of this requirement is welcome, as it presented a potential pitfall for an unwary landlord with little, if any, protective benefit for the tenant. However, s. 35 does not apply to properties in Wales, for which s. 21(4) will remain the same.
Section 36 of the 2015 Act has imposed for the first time a restriction on the earliest date on which a s. 21 notice can be served. As a general rule, a landlord of a property in England now cannot serve a s. 21 notice within 4 months of the start of an AST.
In relation to properties in England, a landlord is no longer able to issue a possession claim based on a s. 21 notice served many months, or even years, before. A landlord now cannot start possession proceedings after the end of the period of 6 months beginning with the date on which the s. 21 notice was given (s. 21(4D) of the 1988 Act). Further, in some cases such proceedings cannot be begun after the end of the period of 4 months beginning with the date specified in the notice (s. 21(4E)).
At present, ss. 33 to 39 (preventing retaliatory eviction, form of s. 21 notice, earliest date for service, prescribed legal requirements and prescribed information) only apply to ASTs of properties in England granted on or after 1 October 2015 (s.41(1)). However, after 1 October 2018, ss. 33 to 38 will apply to any such AST which is in existence at that time (s. 41(3)).
The new legislation is complicated and landlords and their advisers will need to be aware of the provisions of the 1988 Act, the 2004 Act, the 2015 Act and various statutory instruments to ensure that they are in a position to serve a valid s. 21 notice and obtain a possession order.
Whilst I hope the above is a helpful overview, it is merely the starting-point and no substitute for advice tailored to the specific facts of an individual case. Furthermore, the statutory provisions contain complex transitional provisions a full explanation of which is outside of the scope of this article.
Winston Jacob / 1st Oct 2015
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