Terminating an Assured Shorthold Tenancy: New restrictions for landlords

From 1 October 2015, new rules come into force, which impose additional restrictions and formalities on landlords wishing to terminate an assured shorthold tenancy (AST), granted on or after that date, by serving a section 21 notice at the expiry of the fixed term.

Restrictions under the Deregulation Act

Under sections 33 to 41 of the Deregulation Act 2015 (the Act), which come into force on 1 October 2015, a section 21 notice cannot be validly served in respect of an AST:

• Within the first four months of an initial tenancy (although in a renewal tenancy a section 21 notice can be served immediately).
• Where a written complaint in relation to the condition of the property has been served – if such complaint has been served, the landlord must provide an adequate written response within 14 days.
• Where an Improvement Notice has been served by the local authority – if such notice has been served, a section 21 notice cannot be served any time within the following six months unless the landlord is able to assert that the condition was caused solely by the tenant.
• Unless any deposit has been correctly protected in an official scheme and prescribed information served.
• Unless the prescribed form of notice has been used.

Once a valid notice has been served:

• The tenant has a statutory right to claim back any rent paid in advance, in respect of periods after the notice brings the tenancy to an end.
• If proceedings are not issued within six months of the notice being given, the landlord will lose the right under that notice and a fresh one must be served.

One change that will be welcomed by landlords in England, however, is that for fixed term ASTs that become periodic, the section 21 notice does not need to specify a day for expiry of the notice (section 35 of the Act).

Additional formalities

Along with the restrictions imposed by the Act, on 1 October 2015 the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 (SI 2015/1646) (the Regulations) also come into force.

Under the Regulations, a section 21 notice cannot be validly served in relation to an AST granted on or after 1 October 2015 until the following have been provided to the tenant:

• An energy performance certificate;
• A copy of a gas safety certificate; and
• The Department for Communities and Local Government’s booklet, “How to rent: the checklist for renting in England”.

All ASTs to be covered by 2018

From 1 October 2018, the new rules under the Regulations will be expanded to apply to any AST, no matter when it commenced. Until then, before serving a section 21 notice, landlords will need to consider the date that the AST was granted, and whether these additional formalities will therefore apply.

Further developments: smoke and carbon monoxide alarms

In addition to these restrictions on serving section 21 notices, also from 1 October 2015 all landlords of privately rented properties will need to ensure that smoke alarms are fitted on each storey of the property where there is a room used as living accommodation (under the Smoke and Carbon Monoxide Alarm (England) Regulations 2015).

Landlords must also ensure that a carbon monoxide alarm is fitted in any room which is used as living accommodation and contains a solid fuel appliance. Landlords will be required to test all alarms to ensure they are in proper working order at the beginning of each new tenancy. Failing to do any of these things could result in a penalty of up to £5,000.

Increasing the burden on landlords

Landlords are finding themselves being subjected to ever-increasing regulation: from restrictions on serving section 21 notices to smoke / carbon monoxide alarms and even immigration checks. It would not be surprising to find that not all private landlords remain up to speed with their increasing regulatory obligations. For larger organisations, the challenge will be to ensure that new obligations are being adhered to on the ground. With no sign of the regulatory wind changing in landlords’ favour any time soon, this challenge is only set to increase.