Landlords beware! New Section 21 rules present potential pitfalls
Do you rent out a property or properties to tenants?
New provisions included within the Deregulation Act 2015 will impose restrictions on a Landlord’s ability to serve a valid Section 21 notice to end a tenancy.
These rules will ONLY apply to new assured shorthold tenancies (AST’s) entered into on or after 1st October 2015.
Landlords will be relieved to know that the new rules will not apply to fixed term tenancies which commenced before 1st October 2015 that then roll on and become statutory periodic tenancies. However, if a new fixed term tenancy is agreed with the same tenants for the same property it will fall within the new guidelines.
The changes are briefly summarised as follows:
Service of the Section 21 Notice
Gone are the days where a Section 21 Notice can be served at the outset of an AST. Furthermore, for any landlord who has created a six month tenancy, it will be practically impossible to time the service of the Section 21 Notice correctly to have the tenant leave at the end of the six month AST.
It will no longer be possible to serve a Section 21 Notice in the first four months of the tenancy. The exception to this is in the case of replacement tenancies (where a new AST is granted with the same tenants and same premises as a previous tenancy) the required period is four months from the day on which the original tenancy began.
New provisions also specify that, once a Section 21 Notice has been served, Court proceedings to seek possession must be commenced within six months of the service of the Section 21 Notice.
For Section 21 Notices given in respect of statutory periodic tenancies, the relevant period is four months from the date of expiry of the notice.
New form of Section 21 notice
The government has now introduced a newly prescribed version of the form of Notices to be given under Section 21. The version of these forms is yet to be finalised but as we have four months before a Notice can be validly served, the government have sufficient time to finalise this documentation.
Relaxation of date requirement on Notices
The need for a Landlord to specify the last day of a period of an AST as the date on which the tenancy comes to an end has now been removed. However, while this certainly removes an element of precision from the wording of the Notice, Landlords and letting agents should still be aware that the date specified in the Notice must still be:
- Not earlier than 2 months from the date on which the Notice is given; and
- Not earlier than the earliest date on which the tenancy could be brought to an end.
There are two other potential limitations to a Landlord’s ability to give a Section 21 notice:-
- Landlords are now required to give tenants information about their rights under the tenancy agreement.
- Secondly, the service of a Section 21 Notice may be prohibited if the matters relating to health and safety, property condition or energy performance have not been met or addressed by the Landlord.
For further details or if you should have any queries in relation to the new government regulations, please contact Daniel Pidgley on 01202 525333 to discuss.