The Deregulation Act 2015

The Deregulation Act 2015 was passed into Law on 26 March 2015 and covers key areas of interest for Landlords. These include provisions relating to the protection of deposits with Tenancy Deposit Schemes and the new offence of a Retaliatory Eviction. We take a look at what Landlords need to know.

Tenancy Deposit Schemes

The Tenancy Deposit Scheme (TDS) legislation came into force on 6 April 2007 and since then, the legislation has caused the Courts to place a great deal of scrutiny on the wording contained therein. The varying decisions of the Courts have encouraged landlords to take a cautious approach to compliance (regarding protection of the tenancy deposit) when serving a Section 21 Notice to end a tenancy.

The Deregulation Act enacted on the 26th March 2015 has bought some welcome clarification to these conflicting decisions – particularly Superstrike Ltd v Rodrigues [2013] EWCA Civ 669 and Charalambous and another v Maureen Rosairie Ng [2014] EWCA Civ 1604. The Deregulation Act has clarified what is required of landlords and gives a period of 90 days (from 26 March 2015) to comply with their TDS obligations where, on 26 March 2015 a periodic tenancy is in existence and the landlord is holding a deposit in relation to that tenancy steps to protect those deposits must be taken.

The Act further clarifies the position in respect the protecting of deposits where a periodic tenancy is established:

• Prior to 6 April 2007

The deposit MUST have been protected by 23rd June 2015 and the prescribed information served on the tenant in order to serve a valid Section 21 notice at any point in the future. However it should be noted that there is no financial penalty for a landlord who has chosen not to protect the deposit in such cases.

• On or after 6 April 2007

The deposit MUST have been protected by 23 June 2015 and the prescribed information served on the tenant. The financial penalty of damages up to a maximum of three times the value of the deposit will apply to any landlords who fail to comply There is however, a third situation that one needs to consider, namely that a fixed term tenancy arose after 06 April 2007 and the deposit was protected. At the end of the fixed term period a statutory periodic tenancy then arises. The Deregulation Act has brought a welcome amendment to the Housing Act 1998 in that there is no longer a requirement on a landlord to re-serve the prescribed information if the agreement moves from a fixed term to a periodic tenancy.

Retaliatory Evictions

The Deregulation Act has also introduced a new provision to protect tenants from retaliatory evictions by landlords. This comes into force on 1 October 2015. These new provisions will apply to tenancy agreements granted on or after 1 October 2015. They will not apply to a fixed term Assured Shorthold Tenancy (AST) granted prior to this date even if, after 1 October 2015, the fixed term AST becomes a statutory periodic tenancy. The position changes, after 30th September 2018 at which point the provisions will apply to any AST in existence.

The provisions restrict a landlord’s ability to serve a Section 21 notice in circumstances where the tenant has complained about the condition of the premises or the common parts of a building of which the premises form part, and the landlord either did not respond within 14 days, provided an inadequate response or responded by serving a Section 21 notice.

The tenant can then complain to his or her Housing Authority which may then serve various types of enforcement notice on the landlord. If this action is taken by the Housing Authority a landlord will not be able to serve a Section 21 Notice within six months of the date of the service of the enforcement notice from the Housing Authority.

The relevant provisions require the tenant’s complaint regarding the condition of the dwelling to be in writing. Therefore it is vital that landlords comply with their obligations to provide their tenants with a means of contacting them.

This is a substantial change as provisions relating to disrepair previously only applied when using the Section 8 Procedure for evicting a tenant. However, the Deregulation Act does not make this Defence available to all tenants. In the following circumstances a tenant will not be assisted by the new provisions:-

• Where the condition of the dwelling or common parts which gave rise to the service of the notice is due to a breach of the tenant’s duty to use the premises in a tenant like manner. This is likely to result in the validity of the notice becoming an issue for trial. The landlord is likely to have to prove to the Court that any damage to the property was as a result of the tenant’s actions rather than the landlords.

• Where, at the time of service of the Section 21 notice, the dwelling house is on the market for a genuine sale.

• Where the landlord is a private registered provider of social housing

• here a property is subject to a mortgage prior to the landlord granting a tenancy. It will be permissible to serve a Section 21 Notice to provide the property with vacant possession to the Mortgage Company or their Law of Property Act Receiver to exercise their power of sale.

Landlords and their agents should:-

• Ensure adequate responses to any written complaints about maintenance or the condition of the property from the tenant within 14 days of receipt of it.

• Keep adequate records of repairs undertaken in response to tenant’s requests.

• Record tenant damages to the property

• Ensure full and accurate inventory agreed with tenant at inception

• Before serving a Section 21 notice, consider why it is being served. It maybe that you will have to justify in Court your reasons for serving the notice over and above just wishing to remove difficult tenants.

For further information or advice, please call our specialist Landlord team on 02920 808 666