Common mistakes which prevent use of section 21 procedure
Section 21 of the Housing Act 1988 provided landlords who have rented property to tenants under an Assured Shorthold Tenancy (AST) with a ‘no fault’ means of obtaining possession.
The section 21 procedure is popular amongst landlords as a reason does not need to be provided upon which possession is being sought.
Whilst on the face of it one would presume that a ‘no fault’ procedure is straightforward to follow, there remain strict legal guidelines with which a landlord must comply. The majority of such guidelines, perhaps surprisingly, commence from the very outset of the renting out of a property.
We outline some of the most common seen problems faced by landlord clients below:
Failure to protect the deposit
It is stipulated by section 215(1) Housing Act 2004 that a landlord cannot serve a notice to recover possession of the property via the section 21 procedure if the deposit is not held in accordance with an authorised Tenancy Deposit Scheme.
There are three government-approved Tenancy Deposit Schemes with whom a tenant’s deposit can be registered:
- Tenancy Deposit Scheme
- Deposit Protection Service
A landlord or letting agent must place a tenant’s deposit within one of the above-named schemes within 30 days of its receipt. Upon registering the deposit, the landlord will receive a Tenancy Deposit Certificate as proof of the deposit’s registration. A copy of the Certificate is then required to be produced when seeking to evict a tenant via the section 21 procedure.
Many landlords are unaware of the requirement to register a deposit with an approved Tenancy Deposit Scheme. Ultimately, an unprotected deposit will prevent a landlord from recovering possession via the section 21 procedure. Furthermore, a tenant may seek to advance a counterclaim against the landlord under s214 Housing Act 2004 for their failure to protect the deposit. In some circumstances, the court can order the Landlord to pay the tenant/s up to three times the sum of the deposit in compensation.
A Gas Safety Certificate, How to Rent Guide and Energy Performance Certificate is not served
Pursuant to Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015, for any tenancy that commenced on or after 1 October 2015, the landlord must provide a tenant with:
- An Energy Performance Certificate, often referred to as an EPC, and
- A Gas Safety Certificate (GSC), and
- The current version of ‘How to Rent: The Checklist for Renting in England’ (How to Rent Guide).
An EPC is a certificate evidencing the energy efficiency of a property. Landlords can check if their property holds a valid EPC via the GOV.UK website. An EPC must be renewed every five years.
A GSC confirms that each gas appliance in the property has been inspected and approved as safe. It is a requirement for a new GSC to be completed each year. Many landlords face difficulties during the section 21 process in the event that they are unable to produce to the court a GSC for each year of the tenancy.
Somewhat different to the above, the How to Rent Guide is a booklet that provides a checklist for tenants to assist in their understanding of their rights under the tenancy. It is a requirement for the most up to date version of the guide to be served upon a tenant prior to the commencement of a tenancy. It is important to note that a tenant must be provided with a hard copy of the Guide, unless the tenant has previously confirmed to the landlord that they will accept service of the Guide electronically.
Unlike the previously outlined problems, both the EPC and GSC can be served upon a tenant at any time prior to the service of the section 21 notice. However, as outlined above, importantly, the How to Rent Guide must have been served at the outset of a tenancy.
The name of the landlord is incorrectly entered on the AST
A landlord, or if instructed, a letting agent, must take particular care in the drafting of the Assured Shorthold Tenancy (AST). It is a requirement of the court that the names of the landlord and tenant/s inserted within a section 21 notice match with those stated within the AST.
Landlords may face issues in issuing a section 21 notice in this regard, particularly if the landlord is a limited company but the AST names the landlord as the directors of said company. In this event, a section 21 notice would fail to be valid if indeed it contained the names of the directors, as opposed to the name of the limited company.
Alternatively, if the landlord of the property has changed following the commencement of the AST, a section 21 notice would be required to match the name of the previous landlord, as listed within the AST.
Failure to provide a tenant with the prescribed information
The Housing Act 2004 sets further requirements as to the provision of the Prescribed Information. The Prescribed Information is a list of details provided to the tenant, the contents of which differs between the previously referred approved Tenancy Deposit Schemes. Typically, however, the Prescribed Information will enclose the following:
- The sum of the deposit
- The property address
- The details of the administrator of the Tenancy Deposit Scheme holding the deposit.
- The details of the landlord, tenants and any third parties who have made contributions to the deposit.
- The procedure by which a tenant can dispute the amount of the deposit to be returned at the end of the tenancy.
The Prescribed Information must be served upon the tenant/s and any further individuals who have contributed to the deposit, within 30 days of the deposit’s receipt.
Again, if the Prescribed Information is not served upon the appropriate persons within the timeframe, a section 21 notice cannot be validly served upon a tenant.
Similar to a failure to protect the deposit, a tenant can extend a claim for up to three times the sum of the deposit in the event that the prescribed information is not served/is incorrectly served.
“As detailed above, there exist many intricacies in the use of the section 21 notice, particularly with regard to the timing and service of the correct documentation. Often, a landlord will remain unaware of their failure to comply with their obligations until such time as they wish to evict a tenant, leading to delays and sometimes substantial complications in evicting tenants. Conversely, a tenant may face an unlawful eviction from a landlord in circumstances whereby compliance with the above requirements has not been met.
We act for both landlords and tenants in both the service of the section 21 notice and any subsequent court proceedings. We can also advise on alternative options available to a landlord in the event that they are precluded from making use of the section 21 procedure.”