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The Deregulation Act 2015 – impact on Landlords

When Assured Shorthold Tenancies were first introduced with a straight-forward procedure that guaranteed a Landlord’s right to recover their property they instantly became the Landlord’s choice of tenancy for all residential lettings.

A Landlord only needed to serve a Section 21 Notice on the Tenant giving them two months to vacate and if they did not leave the Landlord could then speed through the courts on a special accelerated possession procedure and obtain an order enforceable by the court bailiff.

So long as the Section 21 Notice was in the correct form and served with the correct notice period then no defence was available to the Tenant. If the Landlord wanted his property back then the courts would grant his wish.

As the Landlords were guaranteed the prompt recovery of their property residential buy-to-lets became very attractive and it has been argued that this fired up the relentless surge in property prices.

The Government has subsequently introduced the Deregulation Act 2015 which has reduced the appeal of residential lettings by imposing conditions on the validity of a Landlord’s Section 21 Notice and therefore the availability of the accelerated possession procedure.

For all Assured Shorthold Tenancies that were entered into on or after 1st October 2015 a Section 21 Notice will now only be valid if:-The Tenancy Deposit scheme has been fully complied with; and

  1. The Tenant has been provided with a copy of the government booklet “How to Rent: the checklist for renting in England”; and
  2. The Tenant has been provided with a current Gas Safety Certificate; and
  3. The Tenant has been provided with an Energy Performance Certificate; and
  4. The Landlord has dealt with any written complaint made by the tenant regarding the property, and
  5. A local authority has not already served an improvement notice under the health and safety rating system

The first four are relatively easy to deal with but the last two stipulations have caused much debate as they were apparently intended to deal with retaliatory evictions - where Landlords serve Section 21 Notices on blameless Tenants who have complained about a serious risk to their health due to poorly maintained accommodation. Such allegations may be true but from an equally blameless Landlord’s perspective the concern is that this provision is going to encourage Tenants to make complaints to delay the enforcement of Section 21 Notices.

What may become a common scenario is where a Tenant makes a complaint before a Section 21 Notice is served but the Landlord dismisses the complaint as trivial or the tenant’s own fault (e.g. there may be some condensation mould in the property but only because the Tenants dry their laundry on the radiators and keep the windows closed) and he then serves a Section 21 Notice genuinely believing he has no repairs to address.

The Local Authority may then become involved and take some time to deal with the Tenant’s complaint especially if they are inundated with such requests and in the meantime the Section 21 papers go before a judge. As there is now an issue to deal with the judge cannot grant immediate possession and will have to list this for a hearing which could be a couple of months away.

In addition to these hurdles a Section 21 Notice cannot be served within the first four months of a tenancy but must be served at least two months before the possession is required making it impossible for those Landlords who used to grant 6-month tenancies at least as an initial getting-to-know-you tenancy. Also Section 21 Notices now have an expiry date and possession proceedings must be commenced within 6 months of service.

Perhaps it is with a little irony that this host of new rules have been imposed on the Landlords by the Deregulation Act 2015. I’m not at all clear on what has been deregulated but I’m sure George Orwell would be proud.

For further information on landlord and tenant issues please contact Robert Cherry.

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