From 1 October 2018, all fixed term assured shorthold tenancies in England will be subject to new rules under Section 21 of the Housing Act 1988 - which details the procedures and processes landlords must undertake when they want to evict tenants and gain possession of their property.
As a landlord, hopefully you won’t ever have to worry about evicting tenants, but knowing the rules you must follow and creating a contingency plan will help ensure you’re never stuck without access to your property.
How Section 21 works
Section 21 of the Housing Act enshrines your right to evict tenants on an assured shorthold lease, and sets out when and how you can exercise that right. Unlike Section 8, which helps you evict tenants who break the rules of their tenancy, Section 21 is used when a fixed-term tenancy - agreed in a written contract - comes to an end or during a periodic tenancy (one with no fixed end date).
Landlords must serve tenants with a Section 21 notice according to the conditions set out in the original tenancy agreement. If an assured tenancy agreement is used, the notice needs to be delivered to the tenant directly either by putting it through their door or mailing it to them using first-class post.
Once tenants have received it, tenants must sign the Section 21 notice and return a copy to the landlord, who will keep a record of the notice served and corresponding covering letter. Fundamentally, Section 21 notices must give tenants a minimum of 2 months to vacate your property.
What are the restrictions on serving a Section 21 notice?
Currently, there are a number of restrictions in place that prevent landlords from issuing a Section 21 notice:
- Notice cannot be served within the first four months of the original tenancy – although notice may be served at the outset of a replacement tenancy.
- The property is a house in multiple occupation (HMO), but doesn’t have an HMO licence from the local council.
- The local council has served an improvement notice on the property in the last six months.
- If the tenant has complained about the conditions of the property and the landlord has failed to respond or act on solving the problem (within 14 days of receipt of a tenant’s complaint).
- The tenancy started after April 2007 and the deposit wasn’t placed in an approved government tenant deposit protection scheme and given the necessary information relating to the deposit.
How Section 21 is changing
A number of changes were introduced by the Deregulation Act 2015, many of which came into effect specifically for tenancies granted on or after 1 October 2015. However, from 1 October 2018, all assured shorthold tenancies (ASTs) must comply with additional rules, which includes landlords issuing tenants with the following from the beginning of their tenancy:
- A current copy of the 10-year Energy Performance Certificate (EPC) for the rental property.
- A copy of the annual Gas Safety Certificate.
- The latest version of the government’s ‘How to Rent’ guide at the time of letting and on tenancy renewal.
- Protection for any Tenancy Deposit taken, statutory information and the government tenant deposit protection scheme’s information leaflet within 30 days of receiving the deposit. The statutory information must detail the clause in the tenancy agreement that lists the events when deposit can be withheld, e.g. property damage or rent arrears.
There are also specific changes to the Section 21 process coming into effect on 1 October 2018, which include:
- Reducing the point when you can evict from six months into the tenancy to four months – although a Section 21 notice can be served from the start of a tenancy renewal.
- Adding an expiry period of six months after the notice is issued, if proceedings to evict have not begun.
- Adding a law to prevent landlords from retaliatorily evicting tenants who have complained about the state of repair of a property less than six months ago – unless you can prove the complaint has been addressed.
- Form 6a must be completed to issue a Section 21 notice to any tenancies commencing on or after 1 October 2015.
What do these changes to Section 21 mean for landlords?
Evictions and applying for possession order
Essentially, if the above requirements aren’t followed, landlords can’t serve the Section 21 notice to evict tenants. However, if landlords follow the procedures correctly and have waited for the 2-month notice period to expire, you can apply for a possession order via the accelerated possession route - with no court hearing - or the standard possession route - where a court hearing is required but money can’t be claimed.
Managing tenant complaints
In terms of managing tenants’ complaints about the condition of a property, any failure on the landlord’s part to deal with repairs properly within 14 days of receiving the complaint could result in them being even more out of pocket.
Under the new regulations, if a local authority deems that a landlord isn’t properly maintaining their building for tenants, landlords may not be able to re-let their rental property for a period of six months from the date they were served with an improvement notice.
How to prepare for the Section 21 changes
As the saying goes, if you only hope for the best, prepare for the worst. Therefore, it’s crucial that you familiarise yourself with the responsibilities that Section 21 changes have added to your role as landlord and create plans (and contingencies) accordingly. Here are a few crucial areas to consider:
Maintain a transparent relationship with your tenants
To help avoid a disagreement descending into a legal battle, establishing clear communications with tenants should be at the top of your list. Contact them to ensure they have received the relevant documentation and to ask if the property is in a good state of repair and remedy any problems as quickly as possible if required.
Document everything
Whether it’s tenancy applications forms, an inventory list or a check-in and check-out checklist, it pays to document your relationship with your tenant from the first day they start living in your property so you can prove you carried out your responsibilities in the event of legal action against you.
Understand how Section 21 impacts tenancy renewals
Tenancy renewals created by memoranda will also count as new tenancies for the purposes of these rules, so issuing all of the correct documentation when tenants renew a lease is vital. The only one that does not apply to renewals is the four-month limit on evictions – this is still counted from the initial move-in date.
Create a repair audit trail
Regular inspections, arranged to suit the tenant’s schedule, should be planned to check everything runs smoothly. Creating a repair audit trail will provide evidence that you’ve acted correctly and provided a reasonable response to tenants – useful if you have to seek legal help to evict a tenant who will not leave or has broken their tenancy agreement.
Familiarise yourself with changes to the eviction process
If a Section 21 notice is unavoidable, spend a little time familiarising yourself with the new process. Look over the paperwork, including form 6a, the certificate of service (form N215) and the process for a standard possession order. You might also want to seek advice from a solicitor.
With the changes to Section 21 coming into effect within a matter of weeks, you’ll reap the benefits if you begin your preparations sooner rather than later. As a landlord, arguably the most important ways to embrace these changes is to be as organised as possible, understand what new documents you need to provide to your tenants, and keep a paper trail detailing how and when you’ve fulfilled your duties as a landlord.
