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Landlords face Section 21 confusion over new AST agreements

A number of landlords are unwittingly issuing incorrect Section 21 notices, resulting in thousands of pounds being wasted on aborted possession claims and extensive delays in recovering property, according to Kirwans.

The legal firm claim that the confusion has arisen as a consequence of legislation changes applying to residential Assured Shorthold Tenancy (AST) agreements which started on, or have been renewed since, October 1, 2015.

According to Danielle Hughes from Kirwans, old Section 21 notices, which can still be used in relation to AST agreements made up to September 30, 2015, require a minimum standard of proof from landlords that there is a written AST in place, that the deposit is protected and prescribed information relating to the deposit was served on tenants. Licences are also required for HMOs or in Selective Licensing areas.

But the new Section 21 notices, which are currently intended for AST agreements made from October 1, 2015, onwards and will not apply to older AST’s until late 2018, impose several additional obligations on landlords which must be complied with before the eviction notice can be served.

Hughes now fears that landlords and agents are serving new Section 21 notices on old AST agreements, putting them at greater risk of having their case thrown out of court.

She said: “There are multiple reasons why it is beneficial to serve the old Section 21 forms on AST agreements made prior to October 1, 2015.

“Section 21 has until recent years been known as the non-fault notice, with the landlord required to provide only basic information for the older form to be valid, while tenants have limited grounds on which to dispute a possession claim.

“However, the new form sets out strict requirements with which the landlord must comply prior to serving the notice, including providing the tenant with an Energy Performance Certificate (EPC), a Gas Safety Certificate, and the government’s ‘How to Rent: The Checklist for Renting in England’ booklet.”

Hughes also highlighted the fact that the new notice has a shorter validity period compared to the older forms, and can only be relied upon for a limited time after service, meaning that the landlord either has to issue a possession claim within four months or serve a new notice.

“A failure to adhere to any of these requirements renders a notice invalid, which could see the case being struck out of court, a minimum 12-week delay to the landlord, loss of the court fee of £355, and a possible order to pay the tenant’s legal costs,” she added. 

The new notice also provides tenants with grounds for defending the claim on the basis that the eviction was retaliatory and came about only because they had raised concerns over repairs that needed undertaking on the property.

She continued: “If a tenant has reported a repair that needs undertaking to the local authority and an improvement notice has been served, the landlord may be prevented from recovering possession of the property using Section 21 for over six months under the new regulations,” said Danielle.

“Service of the new notice where it is not needed, therefore, puts the landlord at unnecessary risk of this defence being successfully raised by the tenant in court.”

Hughes is now urging all landlords and agents to take advantage of this crossover period to use the old Section 21 notice where circumstances permit before the regulations come into force across the board.

“I would urge landlords and agents to seek advice and to carefully consider how they approach Section 21 Notices if their AST pre-dates October 2015,” Hughes added.

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    There always seems to be confusion whenever there’s a transition period between old and new legislation. This article highlights some of the potential problems and illustrates that landlords and agents really do need to be up to speed with all the rules and regulations if they are to protect their interests and income.
    This subject appears to be very relevant right now – at LegalforLandlords, we’re getting a lot of calls asking for clarification of the changes. In response, we’ve held a short webinar on the subject and anyone with an interest in the subject can catch up here.

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