In this article, Adaku Parker, a barrister at Sterling Court Chambers, considers those parts of the Deregulation Act 2015 of relevance to landlords and the impact of the Act on Section 21 notices and Tenancy Protection Schemes
The Deregulation Act 2015 (“the Act”) was passed on 26 March 2015 and will be of interest both to landlords and those appointed to deal with residential properties. Below is a brief summary of those points, some of which only apply to properties in England, and the practical implications.
Tenancy Deposit Schemes (“TDS”)
The provisions in relation to TDS have been in force since 26 March 2015. Here are the main changes:
- Deposits taken before 6 April 2007, for tenancies which have subsequently moved onto a periodic tenancy on or after this date, now need to be protected in a Tenancy Deposit Protection scheme if the tenancy is still running. If a deposit remains unprotected, the landlord could potentially face a fine.
- For deposits taken before 6 April 2007, where the tenancy became periodic before this date, the landlord is not required to protect the tenant’s deposit. However, the landlord won’t be able to serve a section 21 notice to regain possession of a property unless the deposit is protected.
- If a tenancy is renewed or rolls over on a periodic basis, landlords don’t need to reissue Prescribed Information to a tenant if the deposit remains with the same authorised scheme, and the parties and premises remain the same.
- The legislation has also clarified that the reference to ‘the landlord’ within the Prescribed Information includes those acting on behalf of the landlord, such as letting agents.
Retaliatory evictions – Provisions to be in force from 1 October 2015 (in England only)
These provisions restrict a landlord’s ability to serve a Section 21 notice in circumstances where the tenant has complained about the condition of the premises or the common parts of a building of which the premises form part, and the landlord either did not respond within 14 days, provided an inadequate response or responded by serving a Section 21 notice.
The tenant can then complain to the housing authority which may serve various types of enforcement notices on the landlord. If the housing authority does this, the landlord cannot serve a Section 21 notice within six months of the date of service of the enforcement notice.
These new provisions will apply to ASTs granted on or after 1 October 2015. They will not apply to a fixed term AST granted prior to that date even if, after 1 October 2015, the fixed term AST becomes a statutory periodic tenancy. The position changes, however, after the end of the period of three years, at which point the provisions will apply to any AST in existence.
Practically this raises a number of points for landlords and fixed charge receivers:
- The importance of responding to any complaints about maintenance or the condition of the property from the tenant within 14 days;
- Before serving a Section 21 notice, consider why it is being served. If the strategy is to recover possession in order for the lender to exercise a power of sale, this strategy should be confirmed in writing before service of the Section 21 notice.
Section 21 Notices – Provisions in force from 1 July and 1 October 2015 (in England only)
From 1 July 2015
- A landlord will not be able to serve a Section 21 notice if the landlord is in breach of a “prescribed requirement”. The prescribed requirements will be set out in regulations and will relate to the condition of dwelling houses and their common parts, the health and safety of occupiers of dwelling houses, and the energy performance of dwelling houses. As such, they could be quite wide and may impose onerous obligations on landlords to ensure compliance prior to serving a notice.
- The Secretary of State will be able to make regulations requiring a landlord to provide prescribed information about the rights and responsibilities of the landlord and tenant under the AST. The landlord will not be able to serve a Section 21 notice if they are in breach of this requirement.
From 1 October 2015
- A landlord will not be able to serve a Section 21 notice within the first four months of the tenancy.
- There will be a statutory right for the tenant to claim back rent paid in advance where a Section 21 notice brings the tenancy to an end before the end of a payment period.
The new rules will apply to ASTs granted on or after the date on which the relevant provision (as set out above) comes into force. They will not apply to a fixed term AST granted prior to that date even if, after the relevant date, the fixed term AST becomes a statutory periodic tenancy. The position changes, however, after the end of the period of three years from the date on which the provision came into force, at which point it applies to any AST in existence.
Article Courtesy of: Sterling Court Chambers