The Deregulation Act 2015 has brought with it new rules for Section 21, but many landlords are unaware of what has changed and what they need to do to serve a successful notice correctly.
Knowing where you stand and what the exact process is will enable you to bring a tenancy to an end with the minimum amount of fuss, but failing to take notice of the changes could land you in serious financial strife. Therefore, taking the time to ensure you’re doing all that you can to adhere to the new rules is well worth your while.
In this post, we’ll lay out exactly what the changes are and we’ll also give you a handy checklist to follow which will help you serve a Section 21 notice in the right way. First, though, let’s take a brief look at what a Section 21 notice is and why it’s so important to all landlords, both big and small.
What is Section 21?
Named after Section 21 of the Housing Act 1988, Section 21 is the commonly used term for a notice served by a landlord to a tenant in order to regain possession of their property once an assured shorthold tenancy comes to an end. Landlords also have the right to issue a Section 21 notice without reason, providing the tenancy has passed the fixed term and is within a periodic phase.
While any landlord has the right to regain possession of their property should they wish to do so, the correct legal process must be followed at all stages of the tenancy - including the serving of a Section 21 notice. Failing to follow the rules can result in all manner of problems, and landlords who do not stick to the exacting nature of the process will likely find themselves with a financial burden they didn’t bargain for.
What changes have been made to Section 21?
While the changes were made some time ago (back in October 2015), their importance is only coming to light now for many landlords as they issue their first notices since the introduction of the new rules.
The key changes include:
- Landlords must supply tenants with the Government’s ‘How To Rent: The Checklist For Renting In England’ booklet, ensuring that they provide the tenant with the latest edition when the tenancy begins or is renewed.
- Landlords must supply the tenant with a copy of the property’s 10 year Energy Performance Certificate (EPC) before the tenant enters said property. This can be made at the time of viewing or when information about the let is given, whichever is sooner.
- Landlords must supply the tenant with an up-to-date copy of the property’s Gas Safety Certificate prior to the tenant entering the property.
- Landlords must have sufficient protection in place for the tenant’s deposit and provide the tenant with an S123 notice as a certificate of deposit compliance under the umbrella of one of the approved Tenancy Deposit Schemes. It’s also worth bearing in mind that the notice requires you to provide reference to any clauses in your tenancy agreement that would enable you to withhold the deposit, either in part or in full. Circumstances include the obvious, such as: Damage to the property, rent arrears, leaving the tenancy early, etc.
- Landlords cannot now serve a Section 21 notice within the first four months of an Assured Shorthold tenancy.
- Under the new rules, Section 21 Notices will now have a ‘shelf-life’ of six months during which court proceeding must be commenced. After six months without court action, the notice will become invalid.
Any new Assured Shorthold Tenancy started in England after October 1st, 2015, will need to follow the updated rules and use the new Standardised Section 21 (6A) form to serve notice. Any remaining tenancies will be subject to the new rules from October 1st, 2018.
It is important to remember that the above is an overview of the major changes and that the new Section 21 rules go far deeper. Should you be in any doubt over your compliance it is wise to seek professional counsel to ensure that all angles are covered. Naturally, we’d be delighted to help out should you have any further questions, so feel free to get in touch.
Your Section 21 Checklist
Following the exacting pre-application procedure laid out in the new Deregulation Act 2015 is just one part of the process. If you want your eviction to go through without a hitch, you’ll also need to pay close attention to the manner in which you actually serve your Section 21 notice to the tenant.
Remember, a tenant can easily challenge a Section 21 notice should you have made a technical error during your application process or if you have failed to adhere to the guidelines laid out for the pre-application process.
Thankfully, you can find out more about whether your Section 21 notice will be successful by answering a few simple questions honestly and thoroughly. We’ve broken these question down into two sections, starting with the following:
- Have you provided your tenant with the following?
- A copy of the property’s Energy Performance Certificate (EPC)
- A copy of the property’s Gas Safety Certificate (Should the property have gas appliances installed)
- A S123 notice stating the protection in place for the tenant’s deposit.
- The latest version of the Ministry of Housing, Communities and Local Government's booklet ‘How To Rent’?
- Did your tenancy begin after October 21st, 2015? If so, have you completed Form 6A in order to serve your Section 21 notice?
- Did your tenancy begin before 21st October, 2015? If so, have you produced your own notice under the authority of Section 21?
- Have you given your tenant two months’ notice within the documentation?
- Have you specified a move-out date?
- Have you checked and double checked dates and addresses used within the notice?
- Was your tenant’s deposit protected within the first 30 days of you receiving it?
- If you are the owner of Houses in Multiple Occupation (HMOs) and in charge of their operation, do you have the required licence to do so?
All of the above should have been answered with a clear ‘Yes’ or in some instances, such as the valid Gas Safety Certificate or the question regarding HMOs, a ‘Not Applicable’. If you answered ‘No’ to any of these, there could be a chance of your Section 21 notice being deemed invalid.
Section Two below is the opposite, all questions should be answered with a definite ‘No’ in order to proceed with a Section 21 notice with a certain degree of confidence. Remember, though, that this checklist does not guarantee compliance and should only be used as a guide.
- Has the local authority governing the property’s area served you with an immediate improvement notice or asked you to undertake emergency remedial action?
- If you have been served with an improvement notice by the property’s local authority, has less than six months passed since the date of receipt?
- With regard to the tenancy, is it within its first four months?
If you have passed both sections with the relevant ‘Yes’ and ‘No’ answers, you’ll likely be in good shape to serve a successful Section 21 notice. Again, everything stated within this piece does not constitute legal advice and should be used as a guide only. Petty Son and Prestwich does not accept any responsibility for the use of the information provided or any liabilities incurred because of it.
Other points of note regarding Section 21
Another key takeaway from the changes made to Section 21 is the need to supply documentary evidence for everything. Keep records and get all exchanges signed for by both you and your tenant. While it may be inconvenient to ask for a signature when handing over a copy of the How to Rent booklet, for example, doing so with give you firmer foundations for a successful Section 21 claim should the need arise.
With this in mind, it is worth considering keeping a diary specifically for your buy-to-let business. Again, this isn’t going to be the most riveting or rewarding part of being a landlord, but having a record of exact dates and times when certain events took place will stand you in good stead should things go to court. Legal procedure demands good documentary evidence, so ensure that your business is not found wanting.
Sound like too much hassle?
For some, the prospect of non-compliance in the event of an eviction claim is terrifying one. Other landlords may simply not want the aggravation associated with the exacting procedure one has to follow in this increasingly bogged down legal minefield. So, what to do?
Finding yourself a reputable letting agent will remove all of the hassles and allow you to go after the more exciting aspects of being a landlord, such as acquiring new property to let. Obviously, there is an element of, ‘Well, they would say that...they’re letting agents!’, but the fees we charge landlords are insignificant compared to the financial hot water many DIY landlords are finding themselves in of late (thanks largely to their inability to keep up-to-date with the frequent legal changes being made by the Government).
Buy-to-let is an ever-changing business, and the legal aspect can be especially confusing to many landlords. Don’t take the risk of being non-compliant, call our team today to find out how we can help you and your business move forward in this increasingly difficult area of the property industry.