I want to become a landlord of a buy-to-let flat. Firstly, what is a Section 21 notice and, secondly, I understand that a new form of Section 21 notice is being introduced? Is this right and what do I need to do?
What is a Section 21 notice?
Dealing with the first part of your question, a Section 21 notice is the prescribed form of notice required to be given ending an assured shorthold tenancy (AST) under Section 21 of the Housing Act 1988 which will force a court to grant a possession order without the landlord having to establish a “ground for possession” - the aptly named “no fault possession procedure”.
In response to the second part of your question, you are correct in that changes will be introduced on 1 October 2015. A new form of Section 21 notice must be used for all fixed term ASTs of properties that start on or after 1 October 2015.
The new rules will not apply to a fixed term AST granted before 1 October 2015, even if, after this date, the fixed term AST becomes a statutory periodic tenancy (a rolling tenancy arising on the expiry of a fixed-term tenancy).
Until 1 October 2018, you can choose whether to use the new form of Section 21 notice for tenancies that started before 1 October 2015.
From 1 October 2018, the new rules will apply to any AST.
Increasing the administrative burden on landlords
In addition, from 1 October 2015, The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 (the Regulations) will impose new requirements on all landlords, which if not observed, will have serious consequences.
The Regulations require landlords to supply more prescribed information to prospective tenants over and above the existing requirement to protect the deposit in a tenancy deposit scheme and information on how the tenancy is protected.
Providing information requirements
The Regulations provide that the landlord cannot serve a Section 21 notice unless it has provided the tenant with the following information at the time the tenancy is entered into:
• An energy performance certificate (EPC), free of charge.
• A copy of the gas safety certificate (if the property has a gas supply).
• A copy of The Department for Communities and Local Government’s booklet “How to rent: the checklist for renting in England” - this can be given by hard copy or by email. There is no need to give the tenant another copy if the guide changes or if the tenancy is renewed - just one copy at the outset is sufficient.
New form and legal requirements
In addition to the new Section 21 notice prescribed form, a Section 21 notice cannot be used where:
• The tenant has resided in the property for less than 4 months.
• The landlord has not protected the tenant’s deposit under a tenancy deposit scheme.
• The landlord has not complied with the “providing information requirements” referred to above.
• The property requires a licence but is unlicensed.
• The landlord is prevented from retaliatory eviction under Section 33 Deregulation Act 2015 (DA 2015) - more to follow on this condition in our next blog.
What does it mean for landlords and agents?
The upshot is that the Section 21 process is becoming more evidence based, rather than process driven, for landlords who will need to ensure that they, or their appointed agents, can show compliance with the new pre-conditions before an application for possession can be made.
What can landlords and agents do?
Evidence of compliance is key. Make sure your paperwork is in order and that it can easily be produced if required.
We suggest using checklists of requirements and ensuring that tenants confirm receipt of the necessary documentation before entering into an AST.
A cautionary note
The National Association of Landlords has complained that there is an error in the published version of the new form Section 21 notice. The standard form, as currently drafted, notes that where a fixed term tenancy ends and then turns into a periodic or rolling tenancy, the Section 21 notice would only be valid for four months from the date that it is served on the tenant.
This contradicts the DA 2015, which makes it clear that the required period to regain possession of a property where the tenancy is rolling or periodic, should instead be four months from the date the Section 21 notice expires. It remains to be seen whether any amendments will be made. We will keep you posted.
If you would like legal advice as a landlord or tenant, please get in touch with our expert team of Property Lawyers at Slater and Gordon UK. Call us on freephone 0800 916 9083 or contact us online and we will call you.