Assured Shorthold Tenancies - The New Rules
So you have decided to rent your flat or house and found just the right tenant. His credentials and references are perfect. He signs a Tenancy Agreement for 12 months and things go swimmingly well. The 12 months are up, you are both happy as he pays the rent on time and he does not raise any complaints. So things roll on into year 2 without much ado and then in moves the girlfriend who does not get on with the neighbours. They complain, she complains and the rent is not paid on time and then stops altogether. She moves her stuff in and the place is now a mess. They have to go, you think. They refuse. Using a section 21 notice you calculate you should get a possession order in 3 months. You serve the Notice and apply for an Order after 2 months but…oh dear you have not complied with the new regulations and are not entitled to use Section 21. The tenant remains in situ continuing to withhold rent and the neighbours are complaining even louder. You now have to start afresh with the longwinded Section 8 notice route.
Any of that familiar…if so read on.
It has been a few months since new regulations came into force, which affects all new Assured Shorthold Tenancies (ASTs) entered into after 1 October 2015. Existing AST’s will not be affected for three years after this date.
Sections 33 to 41 of the Deregulation Act 2015 (2015 Act) came into force on 1 October 2015. They make important changes to the accelerated no fault based procedure to terminate the tenancy or better known as the Section 21 Notice procedure.
Now we know that in order to use Section 21, the tenant’s deposit must be protected in a Tenancy Deposit Scheme and the tenant provided with prescribed information. We know that the form of notice has to be precise as to dates and the notice period of 2 months. We know the AST must refer to the relevant sections of the Housing Act and the information it must recite. So what’s new?
The Landlord must have provided the tenant with an EPC, Gas Certificate and a How to Rent Checklist before being able to use the Section 21 procedure. The obligation to provide the EPC and Gas Certificate has been around for a while but do you now have to provide them at the start of the tenancy agreement to satisfy the requirement? It is yet untested but to play it safe I would recommend you do. Likewise, provide the checklist at the start. A copy can be downloaded from www.gov.uk
So your moving in pack would contain:
- The AST
- The Deposit Certificate and Prescribed Information
- The EPC
- The current Gas Safety Certificate
- The How to Rent Checklist
- Other certificates
What it should not contain is a Section 21 Notice which some managing agents, as a matter of practice, serve at the start of the tenancy. There is no point. Why?
Firstly, for all tenancies created after 1 October 2015, you cannot serve a Section 21 Notice in the first 4 months of the tenancy (Section 36 of the 2015 Act)
Secondly, the Notice is only valid for 6 months from the date of service. In other words you must start possession proceedings within 6 months of the Notice, otherwise you need a new Notice and time (ie the 2 months minimum notice period) begins to run afresh. For a periodic tenancy where more than two months’ notice is required by the tenancy to be given, proceedings must be commenced within the period of four months from that date.
There is now a new form of Section 21 Notice which must be used for all tenancies created after 1 October 2015. The old notice had to set out the last day of the tenancy term. The new law says there is now no need. You can still use the old form for tenancies created before 1 October 2015. (Section 37 of the 2015 Act)
In the event that a tenant complains in writing to the Landlord as to the condition of the premises or the common parts of the building and the landlord does not adequately respond, you cannot then use a Section 21 Notice to try and evict the tenant as this may be considered retaliatory action. (Section 35 of the 2015 Act)
Under the Act the tenant has a right to a rent apportionment for rent paid in advance for the period falling after a Section 21 Notice ends the tenancy. (Section 40 of the 2015 Act)
Like many current tenancies, when your tenant moved in, a 6 or 12 month fixed term tenancy would have been signed. At the end of the term, things were going well, and no one bothered with the formalities of renewal. The tenancy then rolls into a statutory periodic tenancy. More than likely it will be a monthly tenancy as rent is often paid monthly. Would the tenancy be now classified as new (post 1 Oct 2015) or old (pre 1 Oct 2015)? For the purposes of the Act, it will be classified as old and the changes will not apply to those tenancies…but only until 1 October 2018.
The Smoke and Carbon Monoxide Alarm (England) Regulations 2015 also came into force on the 1st October 2015 making it mandatory for landlords to ensure that the premises let are fitted with smoke alarms and carbon monoxide detectors. Smoke alarms are to be in each floor of a building and carbon monoxide detectors in each room that is used wholly or partly as living accommodation and contains a solid burning combustion appliance. What’s more, it is the Landlord’s duty to test and ensure all devices are in good working order.
In practice you would expect your tenant to check the devices regularly and change the battery from time to time, but be careful as the onus is upon you the Landlord to do so.
These regulations apply to both old and new tenancies and there is a penalty of up to £5,000 for any breach.
AND IF THAT WAS NOT ENOUGH…
The Government has decided to delegate their immigration responsibility to the Landlord. The Immigration Act 2014 is to come into force on the 1 February 2016 and it is for the Landlord to check the legal status of potential tenants before agreeing a let. So now you must be up to speed on which citizens are allowed to stay in the country and who might be illegal. The visas in their passports need to be scrutinised and a note kept of when the visa, if any, expires.
If in default of this Act the Landlord can be fined up to £3,000, so be warned.