Assured Shorthold Tenancies and Accelerated Possession under s21
Most lenders require that any tenancy is an Assured Shorthold Tenancy which came into effect from 28th February 1997.
This tenancy type was created because landlords felt their predecessor, the Assured Tenancy did not go far enough in reviving the rental market which is what they were created for. Landlords were also unhappy that they didn’t get an automatic right to get their property back at the end of the tenancy agreement. So the creation of the AST is not only usually for a term of no more than 6/12 months in order to provide the landlord and lender quick and easy possession but it allows landlords to serve a s21 eviction notice of two months with no explanation given and with no breach of the tenancy agreement being committed by tenants.
A tenancy can be an assured or an assured shorthold if the following conditions are met:
- The landlord agrees to rent out accommodation with exclusive use the tenancy will almost certainly be an assured or assured shorthold;
- The landlord lives in a purpose-built block and rents out another flat in the same block they will not be a resident landlord and therefore the tenancy will be either assured or assured shorthold;
- The tenant has exclusive use of part of the accommodation but can also use other parts such as a communal living room or kitchen with someone who is not the landlord then the tenancy is likely to be an assured or assured shorthold;
- The tenant moved in between 15th January 1989 and 27th February 1997 but the landlord did not give a notice saying that the tenancy is an assured shorthold. If the tenant moved in after 27th February 1997 the tenancy can be an assured tenancy but only if a) a written notice was provided by the landlord before the tenancy started or b) if the tenant had a previous assured tenancy in the same accommodation with the same landlord. The latter is however quite rare.
A tenancy can’t be an assured or an assured shorthold if:
- It began, or it was agreed to begin, before 15 January 1989;
- The rent is more than £100,000 a year (from October 2010);
- The tenancy is rent free or for which the rent is £250 or less a year (£1,000 or less in Greater London)
- It is a business tenancy or tenancy of licensed premises (where alcohol is sold or consumed);
- It is a tenancy of a property let with more than two acres of agricultural land or a tenancy of an agricultural holding;
- It is a tenancy granted to a student by an educational body such as a university or college;
- It is a letting by a resident landlord, i.e. a landlord who lives on the premises such as a converted house. Even if the landlord rents out another part of it to a tenant, then again, the agreement is not an assured or assured shorthold, even if exclusive use is granted. The landlord doesn’t need to share any accommodation with the tenant to be held as a resident landlord – the fact that he lives on the premises is enough.
- It is a tenancy where the property is owned by the Crown or a Government Department: however, lettings by the Crown Estates Commissioners, the Duchy of Cornwall or the Duchy of Lancaster may be assured tenancies;
- It is a tenancy where the landlord is a local authority, a new town, a development corporation, a housing action trust, or a fully mutual housing association.
ACCELERATED POSSESSION UNDER S21
Under s21 of the Housing Act 1988 (recovery of possession on expiry or termination of an assured shorthold tenancy) landlords are allowed to get their properties back by serving a notice under what is known as accelerated possession. This notice can be served at the end of the fixed term and gives the tenant two months by which to leave. Under this process landlords do not have to give an explanation, nor does the tenant have to have breached the terms of the tenancy agreement but under the Deregulation Act 2015 more legislation has been introduced concerning the use of the s21 process. This is because of what has become known as ‘retaliatory’ evictions.
The Deregulation Act 2015 means that there are 2 different regimes in operation for the serving of s21 notices. Which one is actually used depends on whether the AST commenced before or after the 1st October 2015.
1: SECTION 21 (1) (b)
This notice can be served where tenancy began before the 1st October 2015 but has not been renewed after that date. It can be served whether the tenancy is a) in the fixed or periodic term if there has been a fixed term tenancy at some stage which has ended and b) any periodic tenancy has not arisen by way of a contractual provision in the tenancy. This is because of the Court of Appeal’s decision in Spencer v Taylor where in 2013 it held that a Section 21(1)(b) would apply after a fixed term tenancy ended and a statutory periodic tenancy was created. The case was to be appealed in the Supreme Court and until it was, legal practitioners were exercising caution by continuing to advise landlords to serve notice under Section 21(4) where a fixed term tenancy had turned periodic. However on 24th July 2014 the Supreme Court refused permission to appeal to Miss Taylor on the basis that no new points of law were raised. This means that the Court of Appeal decision stands and a notice under Section 21(1)(b) can continue to be served for those fixed term tenancies that have now converted to statutory periodic tenancies, providing at least 2 months notice.There is no need to use a s.21(4)(a) notice, or have a date of expiry at the end of a period of the tenancy.
2: SECTION 21 (4) (a)
This notice can also be served where the tenancy began before the 1st October 2015 but has not been renewed after that date, instead becoming a periodic tenancy. Where this notice has to be used (i.e. the fixed term tenancy has ended and the decision in Spencer v Taylor is not applicable), the notice must provide 2 months’ notice from the date the rent is payable. So, whatever date a notice is served, it is deemed served two days after that date in order to allowing 2 working days for the notice to be received by the tenant once posted). Depending on when the rent is payable, this is where the 2 month notice period begins, not when the notice was received. The relevant notice period is 4 months from the date of expiry of the notice. However, landlords and their letting agents must remain aware that the date specified in the notice must still not be earlier than the earliest date on which the tenancy could be brought to an end under the traditional common law rules (by means of a notice to quit).
Under this ‘old’ regime s21 (1)(b) and (4)(a) notices do not need to be in any prescribed form. They must however be in writing, giving not less than two calendar months’ notice. In addition, a s21(4)(a) notice must a) expire at the end of a period of the tenancy and b) give not less than one period of the tenancy’s notice, such as a quarter should rent be paid quarterly.
Again under this ‘old’ regime, a s21 can be served in the following circumstances:
- The first 4 months of the tenancy as the court cannot make a possession order in the first 6 months of the AST;
- Served under ‘retaliatory evictions’
- Served in the absence of an EPC, gas safe certificate and ‘How to Rent Guide.’
The old s21 notices are invalid if the landlord has not:
- Obtained a HMO license for a property that should have one;
- Registered the deposit and provide the prescribed information to the tenant within 30 days of the commencement of the tenancy.
3: SECTION 21 FORM 6A
A s21 form 6A is the new notice for where the tenancy commenced after 1st October 2015 and is used for notices that are reliant on the s21(1)(b) and s21(4)(a) provisions. It explicitly states on the first page that “it may nevertheless be used for all ASTs”.
Where a s21(4)(a) notice is being used on form 6A then it can expire on any day, rather than expiring a the end of a period. The notice is a prescribed form so landlords (or their agents) must only complete the relevant sections, adding nothing else. The notice must clearly state:
- The date of the creation of the notice;
- The name and address of the tenant;
- The date that possession is required which must also allow time for posting;
- The name, telephone number and address of the person completing and signing the notice, i.e. either the landlord or their agent. Note that if it is the agent signing the notice then then the address must be that of the company that they work for and not their personal address.
The new s21 notices are invalid if the landlord has not:
- Provided the tenant with the guide ‘How To Rent: The Checklist For Renting In England’ which can be given in hard copy or the tenant can notify the landlord/agent of an email address to which it can be sent;
- Provided the tenant with an EPC (Energy Performance Certificate) at the outset of the tenancy; and
- Provided the tenant with a Gas Safe Certificate.
The following provision comes under s33 of the Deregulation Act 2015 (preventing retaliatory eviction) which was introduced to prevent those landlords who were failing to meet their repair obligations from serving a s21 notice when the tenant complained.
1: If a property has not been kept adequately repaired and maintained according to the requirements of s11 of the Landlord and Tenant Act 1985 (repairing obligations under short leases), the tenant has made a written complaint about the conditions but has not receive a written response from their landlord setting out his proposed actions and a timeline within 14 days of the complaint having been raised, in default a s21 eviction notice cannot be served.
2: If the landlord (a) fails to reply or (b) replies by serving a s21 notice or (c) gives an inadequate reply that the tenant is unhappy with, the tenant may then complain to the local authority who must inspect the property. The local authority may then in turn decide to serve an improvement notice requiring works to be undertaken under the Housing Act 2004 (specifically the Housing Health and Safety Ratings System). If such notice is served then no valid section 21 eviction notice may be served for 6 months from the date of that notice. Any s21 notice already served will be rendered ineffective and no further notice can then be served for 6 months.
3: For tenancies which first begin on or after 1st October 2015 it will not be possible to give a section 21 notice in the first 4 months of the tenancy. In the case of replacement tenancies i.e. a new tenancy with same parties and the same premises as previous tenancy, the relevant period is 4 months from the day on which the original tenancy began.
Once a s21 notice has been given, possession proceedings must be commenced (where appropriate) within 6 months of it having been served. Before this, the longest time between issuing the notice and starting possession proceedings was 8 years! So once issued, landlords must be prepared to act on it otherwise they will not be able to! For notices given under section 21(4)(a) (relating to statutory periodic tenancies), the relevant period is 4 months from the date of expiry of the notice.
4: Landlords need to prove that they have issued their tenants with a Gas Safe Certificate, an Energy Performance Certificate and a copy of the government publication ‘How To Rent: The Checklist For Renting In England’ which can be given in hard copy or the tenant can notify the landlord/agent of an email address to which it can be sent. These are prescribed legal requirements for all tenancies created from October 1st 2015 and no s21 notice can be given if the tenant has not received them.
5: : There is now a relaxation of date requirement in a s21(4) notice. What this now means is that landlords don’t need to specify the last day of a period of the tenancy as the date of the tenancy comes to an end. However, landlords and their letting agents must remain aware that the date specified in the notice must still be (a) not earlier than 2 months from the date on which the notice is given and (b) not earlier than the earliest date on which the tenancy could be brought to an end under the traditional common law rules (by means of a notice to quit).5: There is no longer a separate notice to be served when the fixed term converts to a periodic tenancy. Now there is a new formal legal notice for use with fixed term or statutory periodic tenancies, with no option for a landlord to write his own. A standard section 21 makes it less complex as it means it has to be the correct notice. All earlier notices are obsolete from 30th September 2015 and should be disposed of.
This is appears to be sensible legislation but sadly many tenants in the lower end of the rental market remain too afraid to even a) ask their landlords for repairs to be carried out, or b) approach their local council, fearing they will lose their homes, (such as they are).