It’s all change for Section 21

Paul Shamplina of Landlord Action shares his thoughts on the Deregulation Act for UKALA.

It can sometimes feel like there is a never ending stream of new legislation and controls being introduced for landlords and letting agents.

Less than twelve months ago, I sat before the All Party Parliamentary Group for the Private Rented Sector at the Houses of Parliament.  This was part of a consultation on changes to section 21 notices, which would form the Deregulation Act 2015. Some elements I agreed with, some I did not, but most importantly I could see the overall objective was to improve standards in the industry.

As of 1st October 2015 certain elements of The Deregulation Act came into force, introducing a whole range of changes which affect whether or not a landlord can serve a section 21 notice on an Assured Shorthold Tenancy (in England), as well as changes to the form itself.

Speaking to about 70 landlords and letting agents in Manchester last week, I was shocked to see that less than half knew about the Act and how this could impact them. So, I wanted to share with you a few key changes to section 21 as part of the Deregulation Act, and my thoughts on these:-

New Prescribed Section 21 Form

The new section 21 notice combines the two previous  section 21 notices into a single use notice for both fixed-term and periodic tenancies.  It is for use with new tenancies starting after 1st of October 2015 and all tenancies (regardless of when they started) from 1st October 2018.

This is great news for landlords and agents.  The form is more straightforward and has a similar feel to that of the section 8 notice, which is already prescribed. It simplifies the claims process and, without the need for complicated end-dates previously required with periodic tenancies, should prevent as many possession claims being rejected at court due to errors with dates.  This is a common problem we come across when taking over cases.

Timing of a Section 21 Notice

From 1st October 2015, a landlord will no longer be able to serve a section 21 notice within the first four months of the contractual term of the tenancy. This is to stop landlords and their agents serving notice at the commencement of a tenancy with a view to being able to terminate it at their convenience.

A section 21 notice now also has a lifespan and must be used within six months of it being served. Failure to do this will result in the possession notice becoming invalid and a new one being required. We feel this is good practice, as we have previously had to evict tenants on notices which are four years old.

Through the Deregulation Act, the Government is looking to clean up the industry by making it more difficult for rogue landlords and letting agents to continue in operation, giving a platform for the good landlords and agents to flourish.

One area of change which caused me greatest concern is that surrounding prevention of so-called “retaliatory eviction”.

Retaliatory Evictions

The Deregulation Act 2015 contains provisions suspending the operation of section 21 in order to protect a tenant against retaliatory eviction. To be fair, I first started dealing with possession cases in 1990 when working in a firm of solicitors and I had never heard of the words ‘Retaliation Eviction’ until 18 months ago – a point I made when providing evidence to the committee. Retaliatory Eviction occurs where a landlord takes steps to evict a tenant because the tenant has complained about the condition of the property, rather than carry out repairs.  The new process means that the tenant has to put in writing to the landlord his/her complaints about disrepair.  The landlord has 14 days to respond to the tenant, setting out when they will access the property, look at the remedies and carry out repairs.  If the tenant is not satisfied and the landlord HAS NOT carried out the repairs, the tenant can make a complaint to the local housing authority.  Local councils have been given the power to serve an enforcement notice on the landlord, setting out “a reasonable timescale” for improvement works to be carried out.  Landlords served with an improvement notice cannot issue a section 21 within six months of an enforcement notice being served.

On the one hand, I have concerns that this opens the flood gates for tenants to submit sham disrepair complaints to councils in a bid to avoid paying rent.  I also worry that there may be time delays because of the shortage of Environmental Health Officers within local councils, many of which have been hit by staff cuts.   On the other hand, with stringent penalties for non-compliance, this is an opportunity for well-run agents to demonstrate the increasing benefits to landlords of opting for a fully-managed service.

Good landlords will deal with complaints within the given 14 days, I just hope that thorough procedures are in place to prevent unsubstantiated claims by tenants from negatively impacting landlords.

Agents – Be on top of regulation

Anyone who knows me and the work of Landlord Action, will know our ultimate goal is to raise standards within in the industry. We work with hundreds of agents to support them and their landlords when things go wrong. We have concerns that the increasing amount of red tape in the industry is encouraging some landlords to exit the private rented sector.

My advice to agents is to make sure you stay on top of legislation. If you are unsure, find out. There are a number of training courses to help you such as those on offer from UKALA, including how to comply with immigration checks and changes to section 21/ the possessions process. Remember, landlords rely on you and when rogue agents fall down, you will rise up.

We are currently filming a 2nd series of ‘Nightmare Tenants, Slum Landlords’ for Channel 5, which comes out in March 2016 where we will once again be exposing bad tenants who make landlords’ lives  miserable.   We will also be exposing rogue agents on the programme.

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