After nearly a year since the Deregulation Act came into effect, there is no doubt this legislation has simplified certain aspects of the lettings process. However, as the Act was introduced in phases, its implications are still being discussed. For those not familiar with the Act, we’ve summarised its most important features for landlords.
Serving a Section 21 notice
Historically, a landlord could serve a Section 21 notice on an Assured Shorthold Tenancy immediately after the tenancy was granted, and rely on it at any point in the future. The Deregulation Act changed this; a Section 21 notice can no longer be served in the first four months of a tenancy (this does not apply to continuation tenancies such as extensions, renewals and statutory periodic tenancies).
Furthermore, once served, a Section 21 notice is only valid for six months, which means a landlord must issue a claim for possession with the county courts within six months from the date the notice was served. Considering the two months’ minimum notice period for the landlord on an Assured Shorthold Tenancy, this means landlords have four months after the notice expires to issue a claim for possession.
Ensuring a Section 21 notice is valid
A Section 21 notice will be invalid if it has been served within six months of the landlord receiving a relevant hazard notice from the local Borough Council, unless any of the following exceptions apply:
- The problematic condition specified in the relevant hazard notice is caused by the tenant being in breach of the tenancy agreement;
- The property is genuinely on the market for sale (but not being sold to someone associated to the landlord);
- The property is subject to a mortgage and the lender requires possession to enforce security.
In addition, there is an added level of compliance necessary to serve a valid Section 21 notice. A landlord must ensure that they have provided the tenant with an Energy Performance Certificate, a valid Gas Safety Certificate, and a copy of the Department for Communities and Local Government’s publication “How to rent: the checklist for renting in England” which was recently updated, prior to serving the notice.
Complying with deposit rules
The Deregulation Act also addresses deposit protection in relation to serving a valid Section 21 notice. If a deposit has been taken but has not been held in accordance with an approved deposit protection scheme, then a valid Section 21 notice cannot be served. This applies even if the deposit was taken before 6th April 2007, when deposit protection rules came into force. The Deregulation Act specifically states that all deposits taken prior to this date had to be registered with an approved Deposit Protection Scheme by 23rd June 2015 at the very latest.
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