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The advantages and pitfalls of Section 21 notices for an AST

As of 2014-15, there were almost two million private landlords in the UK, letting almost five million properties, from which over 20,000 evictions took place in one year; this equates to more than 85 a day. That was a 53% increase on the number of evictions since 2010. Since the introduction of the Housing Act 1988, the vast majority of private residential tenancy agreements are Assured Shorthold Tenancies (AST). This article is aimed at private landlords of residential properties let on ASTs, who want to bring them to an end, on no-fault grounds.

How do I bring an AST to an end?

One way in which a landlord can bring an AST to an end and gain back possession of a property is through the process set out by Section 21 of the 1988 act (i.e. a ‘Section 21 notice’).  For properties in England, this involves sending a notice in a prescribed form to the tenant, which gives them two months to leave the property.  If the tenant does not leave, the landlord can then escalate matters by issuing a claim in the County Court nearest the property in question.

In theory (and subject to landlords complying with various other statutory provisions, which are detailed below), a Section 21 notice offers a guaranteed outcome for a landlord, namely mandatory possession. It would therefore appear to be a safe bet for a landlord to bring an AST to an end using Section 21 if, for instance, the landlord wants to live in the property, intends to sell it or the relationship with the tenant has broken down. However, there are many pitfalls that novice landlords may not be aware of. Below is a summary of the hurdles that must be overcome before a landlord can lawfully bring an AST to an end with the help of a Section 21 Notice.

Pre-AST compliance

Before landlords can even consider bringing an AST to an end using a Section 21 notice, they must ensure they have given their tenant the following documents:

  • Gas safety certificate;
  • Energy Performance Certificate;
  • ‘How to Rent’ guide: please note that this must be provided in a hard copy, unless expressly agreed otherwise with the tenant;
  • If a deposit has been taken:
    • A certified copy of the information required by the Housing (Tenancy Deposits) (Prescribed Information) Order 2007; and
    • A deposit protection certificate.

The safest way to provide these documents is in hard copy and to send them to the tenant in accordance with the ‘notices’ section of the tenancy agreement.  If there is no notices section, it is prudent to send them by first-class post, retaining a copy of the proof of posting.

In addition to the above, landlords must comply with the Smoke Alarm and Carbon Monoxide Alarm (England) Regulations 2015, meaning that you must have a smoke alarm on each floor of the property and a carbon monoxide alarm wherever there is a solid fuel burning appliance.

In 2015, the government outlawed retaliatory eviction, whereby a landlord attempts to end an AST because the tenant has complained of disrepair at the property. This means that if tenants complain of disrepair, landlords must respond within a reasonable time and take reasonable steps to resolve the complaint. If they do not and if the tenant escalates the matter by making a complaint to the local housing authority, the landlord may be prevented from serving a Section 21 notice from the date of the tenant’s complaint until the issue has been resolved, irrespective of why the landlord wants to take their property back.

The above requirements can be retrospectively corrected, however. This means that if a landlord fails to provide the documents listed above, they could still end an AST using the Section 21 route, provided that they correct the mistake, i.e. by providing the missing document.

However, if the deposit is not protected within the 30-day period or the tenant is not given the relevant documents within that time, the landlord will still be liable to pay the tenant compensation for failure to comply with the deposit protection rules (regardless of whether the deposit has been returned to the tenant). The compensation awarded will be calculated at between one and three times the amount of the deposit.

Take note! This compensation can still be claimed by tenants, even without a Section 21 notice on the table.

Valid form of notice and service

For an AST that started on or after 1 October 2015, any Section 21 notice must be the prescribed Form 6a, which can be found on the Gov.Uk website.

An AST that started before 1 October 2015 does not need to be in a prescribed form but the landlord must still comply with Section 21, which states that the notice must be in writing and the landlord must provide the tenants with at least two months notice (for ASTs where rent is paid monthly).

Care must be taken when completing a Section 21 Notice.  For ASTs where rent is paid monthly, the notice must give the tenant two months’ (i.e. 60 days’) notice and the clock will not start ticking until notice has been served.  A notice has been served when the tenant receives (or should have received) it. Some tenancy agreements will say when a notice is ‘deemed served’; if the tenancy agreement does not state this, then it is usually deemed to be served as it would in the ordinary course of business, i.e. for first-class post, the first day after posting, as long as that day is a business day. Cautious landlords may want to build in an extra day to ensure that the notice gives the correct amount of time to the tenant.

In the end…

As a consequence of the many hurdles that must be overcome, it is easy for ill-advised or unaware landlords to get Section 21 Notices wrong. Often, an error does not come to light until the final hearing and, by that stage, the landlord may have waited the best part of six months since the notice was sent to the tenant.

It is paramount that landlords get correct advice before serving statutory notices and this is where we can help. We have an experienced team of lawyers who can give landlords the support they need, in order to ensure they get properties back swiftly and without unnecessary complications.

For more information about any of the issues raised in this article or about landlord and tenant issues in general, contact Faye Schneider by emailing fschneider@lyonsdavidson.co.uk or calling 0117 394 5009 or Milo Hallyburton by emailing mhallyburton@lyonsdavidson.co.uk or calling 0117 904 5829.

 

 

Posted on Nov 14th, 2017 by Lyons Davidson