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New Rules for Landlords

Private landlords often experience problems with tenants due to overdue rent payments. We’ve already addressed this issue here at Access Credit Management – after all, we recognise that acting as a private landlord is a form of business activity and may incur debts that necessitate the services of a debt recovery agency. There’s plenty of legislation in place here in the UK in the form of the Housing Act 1988 which is designed to protect both landlords and tenants. If you’re a landlord then keeping up to date with changes in legislation is vital so that you can ensure compliance with regulations at all times and avoid an unnecessary and often stressful court case. Amendments to Section 21 of the Housing Act last October may represent some difficulties for landlords who have failed to keep up with the changes so today we’re going to look at what these changes are and which tenancies are affected by them.

 

The amendments to Section 21 cover three main areas:

• Compliance

• The form of the notice

• Timing for serving the notice and the start of possession proceedings

 

The new rules affect assured shorthold tenancies granted on or after 1st October, 2015, but not “continuation” tenancies that occur automatically if a tenant stays on after the initial fixed term comes to an end (these will be affected, however, from 2st October, 2018). The new rules affect tenancies in England only as housing legislation in Wales is taken care of by the Assembly government. Let’s take a look at the three main areas affected:

 

COMPLIANCE – In order to serve a Section 21 notice you must first have provided the tenant with:

• A valid Energy Performance Certificate (free of charge)

• A gas safety certificate if relevant

• A copy of the government’s booklet “How to Rent: the checklist for renting in England”

 

The tenant’s deposit should be protected by the landlord using one of the official tenancy deposit protection schemes available and the tenant must be informed of this (which remains a vital compliance issue for landlords who use Section 21).

FORM OF NOTICE – the Section 21 notice must now be in a prescribed form and the rules on exactly when the notice period end must have been relaxed.

TIMING – The new rules on timing may cause confusion for landlords. For example, it is not possible now to serve a Section 21 at the beginning of a new assured shorthold tenancy – you will have to wait until 4 months after the tenancy was granted. If a subsequent assured shorthold tenancy is granted, the timing of the notice will be linked to the original tenancy. Once a Section 21 notice is served the landlord must apply for possession within 6 months of the date of the notice. This means that landlords may need legal advice in order to ensure that they do not miss any key deadlines.

REPAYMENT OF RENT – Under the new rules if a tenancy ends as a result of a Section 21 notice, the landlord must repay rent if the tenant has paid in advance for a period and is not in occupation for one or more whole days of that period. The amount that should be repaid can be calculated using the formula given in the new legislation.

RETALIATORY EVICTION – There have been reports that some landlords have used Section 21 in order to evict tenants who complained about the state of the property. If a landlord has neglected to act on a tenant’s complaint resulting in the local housing authority taking enforcement action, the landlords’ ability to serve a Section 21 notice is restricted by the new rules.