Deregulation Act update

Transcription

1 Deregulation Act update September 2015 The Deregulation Act 2015 introduces significant changes to tenancies of properties let on assured shorthold tenancies. This update summarises the changes and the commencement dates of each of the main provisions Agents may serve Prescribed Information form There had been some doubt whether agents could include their details on the prescribed information (PI) form and whether they could sign on behalf of landlords. This change confirms that they can do both. Section: 30 In force from: Retrospectively from 6 April 2007 Except in relation to any claims for non-compliance already determined or settled. For any claims for non-compliance already issued, if the court refuses to make an award because of these changes, the tenant must not be ordered to pay the Landlord s costs. Non-compliance with Tenancy Deposit Rules If a deposit is not held in accordance with an approved scheme no s.21 notice may be served. This applies even if the deposit was taken before 6 April 2007 when the deposit protection rules came into force. This brings the Housing Act 2004 in line with the Court s decision in the case of Charalambous & Karali v Ng & Ng [2014]. For deposits taken since 6 April 2007, if the initial requirements of the scheme (defined as such requirements imposed by the scheme as fall to be complied with by a landlord ) have not been complied with in time (30 days from receipt of the deposit), the landlord cannot serve a s.21 notice. To be able to serve a s.21 notice landlords will need to return the deposit in full or with agreed deductions. Section: 31 In force from: 26 March 2015 Deemed Compliance with deposit rules This addresses the Superstrike v Rodrigues [2013] issues. The implications of that case were that any renewal or extension of a tenancy or holding over as a statutory periodic tenancy triggered the requirement to comply with the tenancy deposit rules again. This lead to considerable litigation and uncertainty which is now removed. Provided the landlord, tenants and property are the same, a landlord is deemed to have complied with the deposit protection rules on any continuation or renewal if they complied (not necessarily in time) in relation to the original tenancy and the deposit remains in the same scheme. For tenancies where the deposit was taken before 6 April 2007 and which have never been protected, landlords have 90 days from 26 March 2015 (i.e. it must be done before 24 June 2015) to comply with the deposit protection rules. Section: 32 1

2 Deemed Compliance with deposit rules (continued) In force from: Retrospectively from 6 April 2007 Except in relation to any claims for non-compliance already determined or settled. For any claims for non-compliance already issued, if the court refuses to make an award because of these changes, the tenant must not be ordered to pay the Landlord s costs. Retaliatory Eviction These provisions are designed to address the perceived problem of landlords ending tenancies in retaliation to legitimate complaints by tenants about the condition of the property. No s.21 notice within 6 months of a relevant notice A landlord cannot serve a s.21 notice for 6 months after the tenant has served a relevant notice. A relevant notice is one served under s.11 & 12 Housing Act 2004 which is an improvement notice relating to category 1 or 2 hazards and emergency remedial action notices served under s.40(7) of the 2004 Act. Invalid s.21 notice if served after a complaint made A s. 21 notice is invalid if: 1. It is served after the tenant makes a complaint in writing (including ) about the condition of the property. 2. The landlord has not provided an adequate response within 14 days. (Adequate means a response in writing which sets out the action to address the complaint and a reasonable timescale). 3. The tenant then makes a complaint about the same issues to the local housing authority; and 4. The authority serves a relevant notice. These are problematic provisions for landlords because local authorities may take weeks to inspect a property and decide whether to serve notice. Tenants themselves may delay making the complaint to the local authority. There are no timescales set out for these steps to be taken and, if a landlord serves a s.21 notice before the conclusion of those steps, there is the risk that the notice may later be found to be invalid. Any court proceedings based on a s.21 notice found to be invalid by these provisions must be struck out. Furthermore, there is nothing in the act that requires the tenant s complaint to be reasonable or what the landlord can do if the complaint is unjustified. We can therefore expect to see litigation around these provisions until some parameters are set by case law. Exemptions Notices will not be invalid under these provisions where: 1. The condition of the property giving rise to the notice is caused by the tenant in breach of the agreement. 2. The property is genuinely on the market for sale. Genuinely means it is not being sold to someone associated with the landlord (and the Act defines what that means). 3. The landlord is providing social housing. 4. Where the property is subject to a mortgage and the mortgagee requires possession to enforce their security. Section: 33 Applies To: Tenancies beginning after 1st October

3 S.21(4)(a) Notice does not have to expire on the last day of a period S.21(4)(a) has long been the cause of confusion and unnecessary technicality because it required a notice to expire on the last day of a period of the tenancy. That requirement is now removed so, like s.21(1)(b) notices, a landlord just has to give two months notice. Section: 35 No s.21 notice during the first 4 months of the tenancy A s.21 notice may not be served in the first 4 months of a tenancy. This does not apply to continuation tenancies, i.e. extensions, renewals and statutory periodic tenancies. S.21 notices only last 6 months This is a significant change to the law. Historically, landlords could serve a s.21 notice immediately after the tenancy was granted and rely on it at any point in the future. Now landlords must wait at least 4 months before serving the notice and can t issue a claim for possession after 6 months from the date the notice was given. Note that the 6 months starts to run from the date the notice is given not when it expires. As the minimum notice period is 2 months it means landlords have just 4 months after the notice expires to issue a claim. Section: 36 Prescribed form of s.21 notices The Secretary of state has the power to prescribe the form of s.21 notice. Section: 37 From 26 March 2018 will apply to all tenancies. 3

4 Compliance with prescribed legal requirements No s.21 notice may be given when a landlord is in breach of a prescribed requirement. This extends the prohibition on s.21 notices for non-compliance with the tenancy deposit rules to other requirements including: 1. The condition of the property and common parts 2. The health and safety of occupiers 3. The energy performance of the property Section: 38 In force from: 1 October 2015 compliance with provisions Requirement for landlord to provide prescribed information This is an extension of the requirement to serve prescribed information about tenancy deposits already in force. The new rules allow the Secretary of State to prescribe additional information that landlords must give to tenants about the rights and responsibilities of a landlord and a tenant under an assured shorthold tenancy. No s.21 notice may be served if a landlord is in breach of this requirement. Section: 39 In force from: 1 October 2015 Apportionment of rent at the end of the tenancy Historically, if a tenant pays a full month s rent on the first day of the month but is required by a s.21 notice to leave on the second day, the tenant was not entitled to any refund. This is now changed. The tenant is entitled to a full refund where they have paid in advance and are required to leave during the period they have paid for by a s.21 notice. Section: 40 4

5 Apportionment of rent at the end of the tenancy (continued) Applies To: Tenancies beginning after 01 October 2015 Please note that this is a summary only of the provisions of the Act. There is a lot more detail in each of the individual clauses and this summary should not be relied upon as legal advice relevant to specific cases or policies. No liability is accepted for the contents of this update. For further information please contact your LetRisks account manager on Visit for more information on Moore Blatch. This document has been recreated by LetRisks with permission from Moore Blatch. The information contained in the document is for guidance purposes only, LetRisks accepts no liability and will not be liable for any loss or damage arising directly or indirectly (including special, incidental or consequential loss or damage) from your use of this document. Moore Blatch is the trading name of Moore Blatch LLP, which is a limited liability partnership registered in England and Wales, registration number OC The registered office is 11 The Avenue, Southampton, SO17 1XF. VAT Registration Number: Authorised and regulated by the Solicitors Regulation Authority. LetRisks, PropertyRisks and Let Insurance Services are trading names of Let Insurance Services Limited. Let Insurance Services Limited is an independent intermediary and is authorised and regulated by the Financial Conduct Authority. The company is entered on the FCA register ( under reference Let Insurance Services Limited is registered in England and Wales Registration No The registered office is at Wessex House, Upper Market Street, Eastleigh, Hampshire, SO50 9FD. 5