This is the last of 3 articles discussing changes in the law applying to the termination of Assured Shorthold Tenancies (ASTs).
The Deregulation Act 2015 was passed on Friday 26 March 2015. The changes are as described in our previous article save for the following:
Tenancy deposit schemes
The ruling made in Superstrike Ltd v Rodrigues 2013 discussed in our first article has thankfully been overturned. The position is now that:
- if a landlord received a deposit on or after 6 April 2007 and protected it, there is no need to re-protect it once the fixed term of the tenancy ends and a statutory periodic tenancy arises; the landlord can simply leave the deposit in the same scheme and does not need to re-serve prescribed information in order to be compliant
- any tenancy deposit being held by a landlord which has not yet been protected can be protected within 90 days from commencement of the Act (i.e. by 23 June 2015) without financial penalty - this includes deposits taken before 6 April 2007 in respect of tenancies which became periodic before that date
- if any deposit is not protected within the 90 days, the landlord cannot serve a s.21 notice to terminate the tenancy unless the deposit is first returned to the tenant. The landlord may also be made subject to financial penalties in these circumstances
- once a deposit is protected, a protection certificate and prescribed information must be served on the tenant by the landlord (or any agent acting on his behalf)
Section 21 notices
- S.21 notices no longer have to be stated to expire on the last day of a period of the tenancy
- if an AST is terminated during a period of the tenancy pursuant to a s.21 notice, provided the tenant has paid rent in advance then he will be entitled to a refund of rent relating to those days falling after the tenancy ends. If he has continued to live in the property for one or more whole days of that period the refund will be pro-rated
- there will be a new prescribed form of s.21 notice but this has not yet been issued
To claim retaliatory eviction (explained in our first article) a tenant must have notified its landlord or letting agent in writing regarding the repairs they say are required at the property. The landlord must provide an adequate response within 14 days, failing which the tenant can complain to the local authority who can serve a notice of improvement on the landlord. An adequate response is one which provides a description of the action that the landlord proposes to take to address the complaint and sets out a reasonable timescale for taking that action. Once a notice of improvement has been served by the local authority a landlord cannot serve a s.21 for six months.
Importantly these provisions do not apply where:
- the poor condition of the property/common parts is due to a breach by the tenant
- the property is genuinely on the market for sale
- the landlord is a private registered provider of social housing; or
- the premises were charged before the grant of the tenancy and the mortgagee wishes to exercise its power of sale and requires vacant possession
It is good news that the act is less complicated than was first expected and that landlords now have a grace period of 90 days in which to protect any deposits they are holding without fear of financial penalty. Residential landlords should therefore diarise 23 June 2015 and ensure that all deposits are protected and prescribed information is issued by this date.
Any landlords with ongoing possession claims or who issued s.21 notices before 26 March 2015 should seek advice as to whether their position has now changed.
Any complaints of disrepair made by tenants should not be ignored (no matter how spurious) and landlords should ensure they provide adequate responses within 14 days to avoid difficulties when seeking possession.
Once the new form of s.21 notice has been prescribed this should be used to avoid arguments of invalidity when commencing possession proceedings to terminate ASTs.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.