As part of the Deregulation Bill, the government has announced a number of amendments to Section 21 of the Housing Act 1988, but will this make life any easier for landlords and managing agents?
On one hand, the private rented sector will welcome plans to introduce a prescribed form of Section 21 notice to reduce errors and also the removal of the need for the landlord to calculate the date upon which the notice should expire. Yet, on the other hand, landlords and managing agents will be concerned about the introduction of protection for tenants against retaliatory eviction for fearing the tenants will use the protection to delay eviction proceedings.
Other proposed amendments include a prohibition on the practice of serving a Section 21 notice at the start of the tenancy and where a valid Energy Performance or Gas Safety Certificate is not in place.
The Deregulation Bill is currently making its progress through Parliament. It is reported that the Bill may receive Royal Assent in the next few months meaning that these amendments may not be subject to lengthy scrutiny by Parliament.
The codification of Spencer v Taylor
In November 2013, the Court of Appeal's decision in the case of Spencer v Taylor caused some confusion in the finding that the Section 21(1)(b) notice should be served after a fixed term tenancy has come to an end where a statutory periodic tenancy had been created. Until this decision, landlord and tenant practitioners and Judges had assumed that the confusing and cumbersome Section 21(4) would apply instead.
Whilst the decision in Spencer v Taylor has been welcomed in the private sector, it has left doubt over the form which a Section 21 notice and accompanying notes should take. The amendments to the Deregulation Bill make provision for the Secretary of State to issue a prescribed form of notice. It is to be hoped that any new prescribed notice should be straightforward to complete and clear up confusion post-Spencer v Taylor.
Preventing retaliatory eviction
In November 2014, the private renting sector saw the failure of Liberal Democrat Sarah Teather MP's bill to prevent landlords from seeking to evict tenants in order to retaliate in cases where tenants had complained to their Local Authority about the conditions of their home. The RLA raised concerns at the time, over concerns that the landlords would face spurious complaints over repair issues on seeking to obtain possession for genuine reasons.
The Deregulation Bill has been amended to include detailed provisions preventing a landlord from serving a Section 21 notice within six months of an improvement or remedial notice being served by a Local Authority. Equally, landlords will not be able to rely on a Section 21 notice served after a tenant makes a legitimate request for repair works in writing and where the landlord fails to make an "adequate response" to the request within 14 days, leading to the Local Authority serving an improvement or remedial notice. Tenants will therefore only be protected where they have previously complained to their landlord prior to the landlord serving a Section 21 notice.
With Section 21 traditionally having been the no-nonsense possession ground, managing agents and landlords are right to be concerned that these provisions could put the landlord at a significant disadvantage by affording tenants a significant period of time within which high levels of arrears could accrue. Whilst landlords could resort to using ground 8, they may face the complication of counter-claim for the condition of the property.
It is intended that for the first three years, the retaliatory eviction provisions will only apply for new assured shorthold tenancies granted after the enactment of the changes. Tenancies granted by housing associations will not be caught by the legislation.
New restrictions on serving a Section 21 notice and issuing eviction proceedings
As part of the reforms, the government seeks to crack down on the controversial practice of serving a Section 21 at the commencement of the tenancy. This is to be implemented by prohibiting the service of a Section 21 notice in the first four months of the tenancy. If the Bill is enacted as drafted, in practice, the Section 21 notice will not be able to expire until at least a day or two after the last day of the fixed term due to the practicalities of serving the notice after the four month moratorium. The four month moratorium will not apply where the tenancy is a statutory periodic tenancy or on renewal of a fixed term tenancy.
Barring the existence of a fixed term tenancy of six months or more, currently the only fetter upon a landlord's ability to obtain a possession order is that in Section 21(5) which states that a possession order, may not take effect until six months from the commencement of the tenancy. This has meant that, despite Courts not always liking it, landlords have been able to obtain a possession order within the first six months. This will cease to be the case with the Bill barring the issue of possession proceedings within the first six months of the tenancy.
