Reminders for Landlords: Section 21 Notices
Landlords are facing huge changes in the property sector, in particular, with the proposed abolition of s21 notices “no fault evictions”. My colleague Maggie Kerr discussed this further in an article which you can read here https://taylorwalton.co.uk/insights/residential-properties-changes-afoot-what-a-landlord-should-consider/
However, in October 2023 the Government announced that these proposals in the Renters (Reform) Bill are delayed until reforms to the justice system are in place.
I want my rented property back, what do I need to have in place?
Section 21 Notices were introduced in 1988 under the Housing Act. However, several landlords are still failing to protect deposits and serve the correct documentation on their tenants at the start of the Tenancy. If the correct procedure has not been followed, landlords are often unable to rely on a s21 Notice to regain possession of their property. In some cases, this can be rectified.
The documents required to be served at the outset of entering into a Tenancy Agreement are the ‘How to Rent Guide’, Energy Performance Certificate (EPC) and Gas Safety Certificate (GSC) and I will discuss these below.
How to Rent Guide
You are required to provide your tenant with the most up to date version of the ‘How to Rent Guide’ when a new tenancy is entered into. This includes a checklist and detailed information on each stage of the process.
The guide is regularly updated having last been updated on 2 October 2023. A copy of the guide is available at: https://www.gov.uk/government/publications/how-to-rent
If you fail to provide the most up to date ‘How to Rent Guide’, you are still able to serve a s21 notice as long as an up to date ‘How to Rent Guide’ is provided before service of the s21 notice.
Energy Performance Certificate
A valid EPC must be served on your tenant before entering into any tenancy agreement. EPC’s are valid for 10 years.
Since 1 April 2020, landlords can no longer let or continue to let properties covered by the MEES Regulations if they have an EPC rating below E, unless they have a valid exemption in place.
There were proposals that landlords of private rentals would be required to have a rating of C or above by 2025. However, in September 2023, the Prime Minister announced that this proposal would be scrapped.
Gas Safety Certificate
Under the Gas Safety Regulations, you must hold a valid Gas Safety Certificate and provide this to your tenant before entering into a Tenancy Agreement. An inspection must be carried out annually and a copy of each report must be served on your tenant each year throughout the Tenancy.
As well as the mandatory documentation to be served on tenants, there are requirements in relation to deposits.
Under the Tenants Fees Act 2019, a deposit is capped at;
– 5 weeks’ rent where the total annual rent is less than £50,000; or
– 6 weeks’ rent where the total annual rent is £50,000 or above
Within 30 days of receipt, the deposit must be protected using one of the Government approved schemes i.e. MyDeposits, Tenancy Deposit Scheme or Deposit Protection Scheme and your tenant must be provided with the prescribed information.
These requirements must be adhered to as failure to comply gives tenants the right to claim compensation of:
- the return of the deposit; and
- between 1 and 3 times the deposit.
For example, if a landlord failed to protect a deposit of £1,500, the landlord could be liable for up to £6,000. There are very few defences landlords can use to defend this claim.
It is important to note, as seen in the recent case of Sandor Szorad & Eszter Andrea Kozma v Pritpal Singh Kohli, that If the deposit has not been protected and the tenant remains in occupation following the end of the initial term resulting in a statutory periodic tenancy, a landlord may find they are liable for a higher sum due to breaches of several tenancy agreements.
It is therefore recommended that any AST has a ‘continuation clause’ to create a contractual periodic tenancy rather than risk a statutory ‘periodic tenancy’ arising and the risk of an additional claim being made if the deposit has not been protected.
Taking the example above, if at the end of the term, the tenant remains, creating a “second tenancy” the landlord could be liable for up to £10,500 (the original deposit of £1,500, 2 breaches of up to £4,500 each).
- It is good practice to have a checklist of required documentation to be served on Tenants at the outset of the Tenancy Agreement and obtain the Tenant’s signature confirming receipt.
- If anyone other than the Tenant has paid the deposit, the prescribed information must also be served on that third party.
- If you wish to serve a s21 Notice without having protected the deposit, you can still do so if the deposit is returned to the Tenant. You would, however, still be liable if a claim is brought against you.
Over the past ten months the Property Litigation Team has expanded from one to five lawyers and are here to help with your commercial and residential issues. Our experienced Property Litigation team at Taylor Walton can support you in deciding on any queries you may have in respect of Tenancy Agreements. If you would like to contact a member of the team, you can email us or call us on 01582 731 161.
Disclaimer: General Information Provided Only
Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.
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