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Unsure if you will be affected by the newly passed (UK) deregulation act? A confirmation for Landlords in Wales

Unsure if you will be affected by the newly passed (UK) deregulation act? A confirmation for Landlords in Wales

Martine Harris, our head of lettings, provides Welsh Landlords with advice about the newly passed (UK) Deregulation Act

The newly passed (UK) Deregulation Act 2015 closed a legal loophole that was opened by Superstrike, and also brought about changes to AST’s and Section 21 notices. We are seeing a lot of confusion over how this will affect landlords with rental properties in Wales, and we confirm that these changes relate to England only at this point in time.

Superstrike and Re-serving Notices S21 Notices

The tenancy deposit scheme came into force in April 2007. Since then, landlords of most AST’s have been required to register deposits with independent protection schemes, and to provide tenants with prescribed information as to where the deposit is held.

In the case of Superstrike [2013] it was held that a pre-April 2007 tenancy was caught by the rules when the fixed-term tenancy expired and was then replaced by a periodic statutory tenancy. Accordingly, at that stage, a landlord was required to place any deposit within the scheme, and provide prescribed information. Needless to say, a failure to do so meant that no Section 21 Notice for possession could be served (and the landlord was at risk of paying a penalty of up to three times the value of the deposit). This ‘trap’ for the unwary has, however, been removed by the DRA 2015, which gave such landlord’s until 23 rd June 2015 to comply.

It is important to note that the new period of grace to protect previously unprotected deposits and to serve the tenants with the relevant prescribed information only applies to pre-April 2007 tenancies.

A similar problem scenario that arose amongst landlords was whether to ‘re-serve’ the prescribed information when a fixed term AST became periodic upon expiry of the fixed term. The issue in this situation was that, when the fixed term expired, there was an argument that the new statutory protected tenancy triggers the need for the landlord to repeat the process.

Such an argument was (surprisingly) upheld by Birmingham County Court in the case of Gardner [2014] and has now been addressed by the DRA 2015. The act says that if the landlord has complied with the tenancy deposit obligations at the commencement of the original AST, there will be no need to repeat the required steps for a replacement, or periodic, tenancy.

If you are a landlord with a property on the other side of the border, please pay special attention to the information outlined below.

ENGLAND ONLY

S21 Notices and ‘Retaliatory Eviction’

The DRA 2015 makes changes to the rules regarding service by a landlord of a Section 21 Notice requiring possession of an AST:

– From 1st October 2015, there will be no need for the date specified in the notice to be the last day of the period of the tenancy. Thus, notices will become simpler. It is, however, important to note that landlords will not be able to serve a Section 21 Notice within the first four months of the tenancy. This will, therefore, affect the common practice of landlords serving a Section 21 Notice of the start of an AST.

– From 1 July 2015, landlords were no longer able to serve a Section 21 Notice if the landlord is in breach of a ‘prescribed requirement’. In particular, a landlord will not be able to serve a Section 21 Notice if the tenant has recently made an application in respect of housing disrepair to the local authority. A landlord will also be prevented from serving a Section 21 Notice for a period of six months after issue of a housing disrepair notice (such as a hazard awareness notice). In essence, these provisions protect tenants from retaliatory eviction in cases of housing disrepair.

 

Martine

Martine Harris FARLA

Head of Lettings