New prescribed Section 21 Notice

Posted: September 11, 2015 | Author: | Filed under: Houses in Multiple Occupation, Landlords, Letting Agents, Possession | Tags: , , , , , , | 2 Comments

I have previously summarised the new rules under the Deregulation Act 2015 which apply to Assured Shorthold Tenancies.

A new prescribed Section 21 notice has now been issued under The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015. These will come into force on the 1st October 2015.

The new Section 21 notice applies to assured shorthold tenancies granted on or after 1st October 2015. The new rules will not apply to a fixed term assured shorthold tenancy granted before 1st October 2015 even if the tenancy continues as a statutory periodic tenancy after that date (although this will change from 1st October 2018).

The new Section 21 notice cannot be used where:-

• The tenant has resided in the property for less than four months.
• The landlord is prevented from retaliatory eviction under Section 33 of the Deregulation Act 2015.
• The landlord has not complied with the requirements below.
• The landlord has not protected the deposit.
• The property requires a licence but one has not been obtained.

Whilst, undoubtedly, the Section 21 notice is now easier to complete, the new requirements that apply have scope for tripping up landlords and agents. Currently, it is common that landlords and/or agents incorrectly complete a Section 21 notice where, for example, a statutory periodic tenancy is running. The need to identify correct dates on which the notice expires caused landlords and agents problems. Whilst that requirement is now to be dispensed with under the new regulations, there are three new requirements that must be met before a landlord can serve a Section 21 Notice. These are:-

• The tenant must be provided with an Energy Performance Certificate.
• The tenant must be provided with a copy of a Gas Safety Certificate.
• The tenant must be provided with a copy of the booklet entitled “DCLG: How to rent: The checklist for renting in England”.

A Section 21 Notice cannot be served by a landlord at any time when the above requirements have not been complied with. I anticipate that a large number of landlords will not meet the requirements and expensive delays in obtaining possession of their property will follow.

The Deregulation Act explained for landlords – Part 1- Retaliatory Eviction

Posted: April 1, 2015 | Author: | Filed under: Landlords, Letting Agents, Possession, Property Law, Residential Property, Tenants | Tags: , , , , , | Leave a comment

The Deregulation Bill received Royal Assent on 26 March 2015. In Part 1 of this article I will summarise the new provisions to offer protection for tenants against the practice (albeit perhaps not very common) of retaliatory eviction where landlords serve a possession notice in response to a complaint (usually repair) from a tenant.

Section 33 of the Act provides a three part test which, if met, restricts the landlord’s ability to serve a valid Section 21 notice. The landlord will not be able to serve a valid notice if:

  1. The tenant has made a written complaint to the landlord regarding the condition of the property before service of a Section 21 notice; and
  2. The landlord has not provided an adequate written response within 14 days of complaint; and
  3. The tenant has complained to the Local Authority which then serves an Improvement Notice or an Emergency Remedial Notice.

If the Local Authority has served a notice as above, the landlord is unable to serve a valid Section 21 notice for 6 months from the date of the Local Authority notice being served or suspended.

There are some exceptions which include where the Local Authority notice is revoked, the property is genuinely on the market for sale, mortgage repossessions and where the tenant has caused the disrepair. The latter, certainly, will open up a debate as to who is responsible for the disrepair and may cause delay to possession proceedings.

There are various knock on effects to possession proceedings which will need to be considered on a case by case basis but, essentially, it is going to be a question of who gets in first in terms of either a complaint from the tenant or a Section 21 notice being served by a landlord.

However, further provisions of the Act provide a restriction on the timing of service of a Section 21 Notice. Some landlords serve a Section 21 notice at the start of the tenancy as a matter of course. A landlord will not be able to serve a Section 21 notice within the first 4 months of a fixed term under the new provisions. As such, no Section 21 notice can end on the last day of a 6 month term but a new prescribed Section 21 notice is to be introduced which will avoid the need for a landlord to specify, within the notice, the last day of the period of the tenancy for when the tenancy comes to an end. This will simplify the possession notice process and cut down errors in drafting Section 21 notices for landlords.

The new provisions relating to retaliatory eviction come in to force on 1 October 2015. They will initially only apply to new fixed term tenancies entered into from that date. Eventually, the provisions will apply to all tenancies but this will not be for another 3 years.

Landlords can expect additional provisions restricting their right to serve a Section 21 notice where they fail to comply with various obligations. Whilst these will be subject to further Regulations, it is anticipated that they will relate to health and safety issues, Energy Performance Certificates and Gas Safety Certificates.

SPENCER V TAYLOR: Christmas Cheer for Landlords Part 2 – The Hangover?

Posted: January 27, 2014 | Author: | Filed under: Housing Act, Landlords, Letting Agents, Managing Agents, Possession, Property Law, Rent arrears, Residential Property, Tenancy Agreements, Tenancy Deposits, Tenants | Tags: , , , , , , , , , , , , , , | Leave a comment

 

Further to my first article on this case (see here) I have now received a copy of the case report. In discussing the case report with my colleagues, we have concluded that this decision lends itself to a re-write of Section 21 Notices. I will set out below a brief explanation why this is the case together with further background of the case itself.

As you may already appreciate, there are two forms of Section 21 Notices. Prior to Spencer –v- Taylor, it was established practice that a Section 21(1) Notice could be served at any time during the fixed term tenancy. The Section 21(1) Notice did not have to expire on a particular date, provided at least two clear months notice was given and that the notice did not expire before the last day of the fixed term.

In contrast, a Section 21(4) Notice could be given (and still can be) in two situations. Firstly, where the fixed term tenancy has expired and there is a periodic tenancy continuing. Secondly, it can be given where the tenancy was periodic from the outset.

In both situations, the Section 21(4) Notice has to expire on a particular date as it must expire on the last day of a tenancy period so that possession is required after that specific day.

The decision

The decision of Spencer –v- Taylor alters the position and provides new situations in which a Section 21(1) Notice can be relied upon.

The case itself concerned a six month tenancy which expired and continued as a weekly statutory periodic tenancy. The landlord served the Notice and relied on Section 21 (4) in order to seek possession.

The weekly periodic tenancy ran from a Saturday to the following Sunday. In order to comply with Section 21 (4) therefore, the Notice should have expired on a Sunday ie. the last day of tenancy period. However, the Notice in this case ended on a Saturday and was, therefore, not the last day of the period of the tenancy.

The Notice itself provided:-

“(a) After 1 January 2012 or (b) the end of your period of tenancy which will end next after the expiration of two months from the service upon you of this notice”.

The 1st January 2012 was a Saturday, two months after service of the Notice (18th October 2011). As set out above, this is an ineffective date. However, the Notice provided for a saving provision (under (b)) as an alternative which led to a further date of 23rd December 2011.

The tenant argued that Section 21 (2) of the Housing Act prohibited the landlord from serving Notice under Section 21 (1) once the fixed term had expired. However, this is not what Section 21 (2) says. In short, it read “A [Section 21 (1)] Notice ….may be given before or on the last day on which the tenancy came to an end”. It does not say “may only” so nothing is said about the use of such a notice being given after the last day of the fixed term.

The effect

This therefore opened up the ability for a landlord to rely on a Section 21(1) Notice even after the expiry of the fixed term and, under the provisions of Section 21(1) that notice did not need to expire on a particular date and nor did it require any date to be specified in the notice at all.

Therefore, on the facts of the case itself, the landlord had given notice on the 18th October 2011 and the dates provided for within that notice (of which there were two), both gave at least two months notice. Importantly, in Spencer –v- Taylor the possession proceedings were not issued until both of these dates had passed. There was no issue for the Court to decide that the first date was wrong (ie. the specified date as 1st January, which was not the last day of the tenancy period) as the Court had decided that the notice was valid under Section 21(1) (where no specified date was required).

The Court did address the issue of two different dates and stated that the reasonable recipient of a notice (with two different dates) would have looked at the back of the notice itself and the explanatory notes therein and seen from that that the 1st January 2012, being a Saturday, was ineffective, and should then be able to work out the correct date relied on the saving provision. This issue has always been one of confusion for landlords in relying on a Section 21 (4) Notice. It was of little effect within Spencer –v- Taylor and whilst the notice was effective for both the purposes of Section 21(1) and Section 21(4), the Court decided that Section 21(1) prevails.

The caution

However, whilst Spencer –v- Taylor now provides that a Section 21(1) Notice may be served even after the fixed term of the tenancy has run out, this can only be relied upon where the tenancy started out as a fixed term tenancy.

There is an important point to raise in this respect. Whilst the Court have not specified as such, it is arguable that the decision only applies to cases where not only the tenancy started out as a fixed term tenancy but then continued as a statutory periodic tenancy. This is due to the provisions of Section 21(3). It is a technical argument which I will not cover here but it provides a provision whereby a Court could limit the application of Spencer –v- Taylor so that it applies only to tenancies that are now a statutory periodic tenancy following the expiry of a fixed term. Therefore, where there is a contractual periodic tenancy, landlords should still rely on a Section 21(4) Notice. This is also the case where the tenancy was a periodic tenancy from the outset.

The current application of Spencer –v- Taylor is such that Section 21(1) Notice can be used following the expiry of a fixed term (subject to the above provisions). Provided that all possible valid dates that arise out of that notice have gone by before pursuing a claim for possession, the notice should be valid.

The decision, as a Court of Appeal decision, can therefore be relied on although there remains the possibility that it will be overturned by the Supreme Court. Whilst there are the provisos as mentioned above, however, landlords may wish to continue with the “original” way of drafting Section 21 Notices so as to avoid any issues being raised by tenants. Landlords may still, therefore, wish to rely on Section 21(4) Notice albeit caution must be applied in drafting such notices so that the use of two conflicting compliant dates (where a saving provision is used) does not invalidate the notice. Clear notes would need to be included within the Section 21(4) Notice in order to make it clear which date would prevail as the effective date. Even if the Section 21(4) Notice is invalid, it may be valid for the purposes of Section 21(1).

The position is, as ever, not entirely simple. Notices should not confuse tenants and hence the consideration for a re-writing of a Section 21 Notice.

Spencer v Taylor – Christmas cheer for landlords

Posted: December 10, 2013 | Author: | Filed under: Landlords, Letting Agents, Managing Agents, Possession, Property Law, Residential Property, Tenancy Deposits, Tenants | Tags: , , , , , , | 4 Comments

I recently gave a number of presentations to landlords and managing agents entitled “Possession Notices – getting them right”. The presentation provided guidance on how to draft Section 8 and Section 21 Notices together with the effects of tenancy deposit protection and Superstrike on the validity of such notices.

The presentation included a detailed review of Section 21(4) Notices. This included an explanation of when a Section 21(4) Notice can be served and the consideration of tenancy periods that must be taken into account when calculating the correct ‘end date’ of the notice.

I won’t seek to set out here a full review of Section 21(4) Notices other to say that it was established practice that a Section 21(4) Notice must be used when a Section 21 possession notice is to be served after the end of the fixed term of the assured shorthold tenancy. If a Section 21 notice was to be served during the fixed term then you could rely on a Section 21(1) Notice.

Section 21(1) Notice is a lot simpler to use. You do not have to worry about the notice expiring on an exact date and/or using any saving provision. Nor do you have to worry about common law provisions affecting the length of notice (for example, you may need to give at least 6 months notice under a Section 21 (4) Notice).

The common law provisions and calculation of the exact date are not issues I need to address here as halfway through my series of presentations a case was decided in the Court of Appeal which meant that I could, in effect, tear up my notes and completely rewrite the part of the presentation relating to Section 21(4) Notices. The case is entitled Spencer v Taylor. I have not yet had sight of a case report and am relying on information received from the barrister who represented the unsuccessful tenant in the case.

The background of the case is not important although I will provide further information on the case once the report is made available. As I say, I am working on limited information at this time but I understand that there were 2 key decisions made by the Court. The first related to the ‘key date’ and whether the introduction of a second date (under a saving provision) invalidated the notice. Again that is not a real concern for the purposes of this article as it is the second decision which really stands out. The decision didn’t just lead to a re-write of my presentation but, in effect, drove a coach and horses through the way that landlords, agents, lawyers and the Courts have dealt with Section 21 Notices over the past 25 years i.e. since their introduction.

The Court of Appeal stated that where there was originally a fixed term tenancy (which will be the majority of assured shorthold tenancies) then even if a Section 21 Notice is served after the expiry of the fixed term, the landlord can rely on a Section 21(1) Notice. Therefore, provided that not less than 2 clear months notice is given, a Section 21(1) Notice can be relied on at any time. The role of a Section 21(4) Notice then becomes one whereby that notice is to be served where the tenancy was periodic from the start.

Provided a landlord takes into account the effects of Superstrike and has complied with the tenancy deposit provisions (insofar as the deposit has been registered and prescribed information served) then the landlord need not worry about the complexities of drafting a Section 21 (4) Notice. This will result in substantially fewer possession claims being thrown out of Court due to technical errors in notices.

Free Seminar for Landlords & Letting Agents- Possession Notices and Superstrike

Posted: November 8, 2013 | Author: | Filed under: Bury & Walkers, Landlords, Letting Agents, Managing Agents, Possession, Property Law, Rent arrears, Residential Property, Tenancy Agreements, Tenancy Deposits, Tenants | Tags: , , , , , | Leave a comment

Last night I attended a meeting in Barnsley of 30 landlords and presented to them my latest seminar entitled “Possession Notices- Getting them right”.

As well as guidance on how to draft possession notices, the seminar provided an analysis of the recent Superstrike case which has raised concerns amongst landlords and agents as to how to deal with tenancy deposits.

The presentation was well received and if you would like to benefit from the guidance, I am repeating the free seminar in Leeds on 21st November 2013 and in Barnsley on 29th November 2013. Please find further details and a booking form here

Tenancy Deposits- Update

Posted: June 24, 2013 | Author: | Filed under: Housing Act, Landlords, Letting Agents, Managing Agents, Possession, Property Law, Rent arrears, Residential Property, Tenancy Deposits, Tenants | Tags: , , , , | 2 Comments

A recent Court of Appeal decision has clarified an issue previously touched on here. The case, Superstrike Limited v Rodrigues [2013] EWCA Civ 669, addressed the position where a deposit was taken before April 2007 (i.e. before the requirement to register a deposit came into force) and the tenancy then became a statutory periodic tenancy after April 2007.

Briefly, the facts of the case were that the tenancy began in January 2007 for a term of 12 months. A deposit was paid at that time and following expiry of the 12 months, the tenancy continued as a statutory periodic tenancy. In June 2011, the landlord served a Section 21 Notice and issued possession proceedings.

The matter found its way to the Court of Appeal, The Court was asked to determine whether the requirements of the deposit legislation applied and, thus, whether or not the failure to register the deposit meant that the Section 21 Notice can be relied upon.

The Court determined the two issues. Firstly, they decided that the statutory periodic tenancy did constitute a new tenancy.

Secondly they considered whether or not the deposit had been received by the landlord in January 2008 when the tenancy became a statutory periodic tenancy. The Court decided that it had been received.

The landlord had argued that the deposit had not been physically received by him in January 2008 and Section 213 of the Housing Act 2004 therefore didn’t apply. The Court determined that the tenant should be treated as having paid the amount of the deposit to the landlord in respect of the new tenancy by way of set-off against the landlord’s obligation to account to the tenant for the deposit in respect of the previous tenancy. In effect, the original deposit related to the obligations under the original tenancy, not the new periodic tenancy. There was a deemed re-receipt of the deposit by the landlord and, as such, it should have been registered. The possession order was therefore set aside as the landlord cannot rely on the Section 21 Notice that he served.

As previously set out in other articles, where a deposit is to be protected, the landlord has 30 days from receipt of that deposit to do so. Where deposits were received (as deemed in this case) prior to 5th April 2012, protection must have taken place before 6th May 2012 in order to avoid liability for a penalty and in order to avoid problems with relying on a Section 21 Notice.

The case also raises another issue in relation to service of prescribed information. This could also affect the validity of a Section 21 Notice if the prescribed information has not been served within the 30 day period following receipt of the deposit. This issue was not addressed by the Court here but it would follow that if the Court deems that a statutory periodic tenancy arises in circumstances requiring the deposit to be registered then prescribed information shall also be served within the requirements of the legislation.

I’m afraid it’s a case of watching this space as further issues are addressed by the Court.

TENANCY DEPOSITS – A CAUTIONARY TALE

Posted: December 13, 2012 | Author: | Filed under: Bury & Walkers, Housing Act, Landlords, Letting Agents, Managing Agents, Property Law, Residential Property, Tenancy Agreements, Tenancy Deposits, Tenants | Tags: , , , , , , | 2 Comments

The recent Court of Appeal case of Ayannuga   -v-  Swindells set alarm bells ringing amongst residential landlords.   That case involved a landlord who had failed to produce part of the prescribed information required to the tenant under the Tenancy Deposit Scheme.  As a result, the landlord was ordered to pay the maximum penalty of three times the value of the deposit.

The penalty seems unduly harsh and sets a marker firmly on the side of the tenant.  Unfortunately, I do not have the benefit of the full case report but, as I understand it, the landlord’s failure was to provide information relating to the Tenancy Deposit Scheme itself, information that was provided within the Scheme’s own leaflet which was available on the Scheme’s website.

Unfortunately, for the landlord, the TDS Rules are quite clear.  The rules specifically set out the requirements of the Housing Act 2004 and state that Section 213(5) and (6) of the Act require a landlord to give the tenant prescribed information, being such information as required in accordance with the Housing (Tenancy Deposits) (Prescribed Information) Order 2007.   It also provides that the landlord must include any leaflet published by the applicable Tenancy Deposit Protection Scheme. 

Whilst the information contained in the leaflet is available to the tenant elsewhere (if only on the Scheme’s website), the above Order has always provided that any scheme leaflet should be served in addition to the prescribed information.  Do not forget, the prescribed information should also be served on any person who has paid towards the deposit, e.g. a parent of a tenant. 

I have always emphasised the need for the landlord to hand over the scheme leaflet.  It is more paperwork and I recall, earlier this year, a landlord informing me that he was going to buy new shock absorbers for his car in order to cope with the increased paperwork that the Tenancy Deposit Scheme caused him to produce!  Whilst some landlords may have overlooked the need to provide the scheme leaflet in the past, clearly it is now important to ensure that it is provided along with all of the prescribed information in order to avoid having to pay a penalty.

If it is found that the correct prescribed information has not been provided within 30 days of receipt of the deposit, not only is a penalty payable but also the landlord loses their Section 21 rights until it is served.

It is therefore important for landlords to remember what the Court has said.  The prescribed information has been held to be a key part of the two elements of the Tenancy Deposit Legislation.  Mere protection of the deposit itself is not enough.  The information must also be given via the landlord rather than leave the tenants to find it out themselves.  Providing the information, therefore, really matters.  Whilst onerous, it must be done on every occasion and within the required time.

It is also important for landlords to ensure that they follow the applicable scheme rules.  Irrespective of the requirement of the Housing Act 2004, if a landlord breaches the scheme rules, they could find themselves in difficulty in recovering any part of the deposit that is disputed by the tenant.  If a breach is identified, the relevant scheme may simply state that they have no requirement to undertake an adjudication, within the scheme, relating to any alleged damages or rent arrears.  Instead, the scheme may determine matters in favour of the tenant without due consideration of the landlord’s position.

Landlords in peril with changes to Tenancy Deposit Rules

Posted: May 21, 2012 | Author: | Filed under: Bury & Walkers, Landlords, Letting Agents, Possession, Tenancy Deposits, Tenants | Tags: , , , , , , | Leave a comment

New tenancy deposit rules came into force on the 6th April 2012.  Landlords and their letting agents must comply with these rules in order to avoid payment of a penalty as well as restrictions on obtaining possession of their property.

Since 2007 there has been legislation which provided that if a landlord or their agent failed to protect deposits received under an assured shorthold tenancy then they could be made to pay a penalty and might be restricted from obtaining possession of their property from a non-paying tenant.  Bury & Walkers acted for a number of landlords who successfully challenged numerous claims made by tenants under the existing legislation and acted for landlords in two of the four main cases relating to tenancy deposit claims including the leading case in the Court of Appeal of Honeysuckle Properties -v- Fletcher.

Landlords can no longer delay in dealing with tenancy deposits.  A delay can result in payment of a penalty, up to three times the value of the deposit, and can also effect the landlord’s ability to obtain possession, either by way of a Section 21 Notice or, indeed, a Section 8 Notice.”

Failure to comply with the new rules can lead to a significant and costly delay in obtaining possession.

If you are a landlord and are not sure whether you are complying with the latest tenancy deposit rule changes then please get in contact with me to discuss. You can reach me via email g.archer@burywalkers.com or call me at the Bury & Walkers Leeds office on 0113 244 4227.