Key Changes For Residential Landlords And Agents

Key Changes For Residential Landlords And Agents From 1 October 2015

On 1 October 2015 some significant changes will be made to housing law in England (properties in Wales are not affected). The changes increase the level of protection afforded to tenants and place extra burdens on landlords.

Buy-to-let investors are still coming to terms with the budget bombshell concerning the reduction of tax relief on mortgage interest payments. How much will the October 2015 changes add to their woes?

How is the Section 21 Notice changing?

The most important changes affect landlords’ ability to recover possession of their premises at or after the end of the term of an assured shorthold tenancy. Section 21 of the Housing Act 1988 allows landlords to remove tenants on a “no fault” basis, provided they serve notice correctly and there are no factors that serve to invalidate the notice.

From 1 October there will be a longer list of invalidating factors, in other words more obstacles in the way of landlords seeking possession. There are also changes to do with the timing of service of a Section 21 Notice and the timescale for issuing possession proceedings. And there is a new prescribed form of Section 21 Notice.

Readers should note that the changes referred to below only affect tenancies that start on or after 1 October 2015. Tenancies granted before that date are not affected. However, from 1 October 2018, the new provisions will apply to all tenancies, regardless of when they were granted.

Validity of Section 21 Notices 

Currently there are 2 factors that can invalidate a Section 21 Notice: failure to protect the tenant’s deposit in an approved tenancy deposit protection scheme and failure to comply with HMO licensing requirements.

On 1 October, several more restrictions will come into play. Landlords will be unable to serve a valid Section 21 Notice if:

• The tenant has made a valid complaint about the condition of the property and, instead of addressing the complaint, the Landlord serves a Section 21 Notice. This is known as “retaliatory eviction”. This restriction comes into play where the local authority has served an improvement notice or an emergency remedial action notice under the Housing Health & Safety Rating System (HHSRS).

• The landlord has failed to provide the tenant with any of the following: a valid energy performance certificate, a current gas safety certificate or a copy of the publication “How to rent: the checklist for renting in England” published by the Department for Communities and Local Government.

Timing issues

At the moment, some landlords and agents like to issue a Section 21 Notice at the start of the tenancy. This was felt to be unfair to tenants so from 1 October it will not be possible to serve a Section 21 Notice in the first 4 months of a tenancy. Landlords and agents will need to diarise scrupulously if they want to obtain possession at the earliest possible stage, i.e. after 6 months.

There is also a new deadline for starting possession proceedings if the tenant does not vacate of his or her own accord. Proceedings must be started within 6 months of the date of service of the Section 21 Notice; otherwise a new Section 21 Notice must be served.

Prescribed form of Section 21 Notice

A new prescribed form of Section 21 Notice will need to be used to terminate tenancies that start on or after 1 October. Use of the prescribed form is optional for existing tenancies but it is likely that landlords will adopt the new form for all tenancies. From 1 October 2018 the new form must be used for all tenancies.

Any other changes?

As well as the changes to the Housing Act discussed above, landlords and agents need to be aware of the new Smoke and Carbon Monoxide Alarm (England) Regulations 2015. Currently the Regulations are in draft but they are expected to be finalised shortly and to take effect on 1 October.

Carbon Monoxide incidents are more common in rented property than in privately owned homes and these new Regulations are part of a wider effort to improve fire safety in the UK.

The Regulations require a smoke alarm to be installed on each storey of premises on which there is a room used wholly or partly as living accommodation (this includes bathrooms and toilets). They also require a carbon monoxide alarm to be present in any room which is used wholly or partly as living accommodation and contains a solid fuel burning combustion appliance. On the first day of a new tenancy the landlord or their agent must check that each alarm is in proper working order.

Local housing authorities have enforcement powers.

Many properties, particularly those built in recent years, will already be equipped with alarms that comply with the Regulations. However, landlords and agents should carry out an audit of their properties to identify deficiencies and remedy them before 1 October 2015.

From 1 October 2015 a range of new and updated template documents covering these changes will be available on the Simply-docs website.