A section 21 notice is one of the most common ways for a tenant to be evicted from an assured shorthold tenancy in the UK. This one passage of housing law has had a huge impact on millions of landlords and tenants, but it has a troubled legal history. Here to take us through it is legal expert Tessa Shepperson.
What Is Section 21?
Section 21 is the single most influential clause in the Housing Act 1988. It could be said that it changed the face of private renting forever.
Before 15 January 1989, when the Rent Act 1977 applied, renting property was very different. Once you let a tenant into your property, not only were you unable to charge a proper market rent, it also was very difficult to get the tenants out again.
I advised a young man in the early 1990s who had bought a property in 1986 but was not ready to live in it for the time being. He rented it out to a family – only to find that when he wanted to claim it back to live in – he couldn’t. (And still can’t – properties let under the Rent Act 1977 stay under the Rent Act 1977).
But after the Housing Act 1988 came into force, magically landlords renting properties as Assured Shorthold Tenancies (ASTs) could get their properties back! Section 21 and the new buy-to-let mortgage kickstarted the private rented sector which has grown from about 8% of households in the 1980’s to 20% or more today.
A Total Nightmare
Section 21 has also been a nightmare for landlords.
Up until a few years ago, countless possession claims were thrown out of Court by Judges because the landlord’s section 21 notice did not give ‘the last day of a period of the tenancy’.
Thankfully that requirement is no longer with us, but it has been replaced by many other legal rules, meaning that landlords are still routinely getting their section 21 notices wrong.
Let’s take a look at the rules in force now and see what landlords need to do.
Section 21 Rules
Some of the rules have been with us for a while. Others came in under the inappropriately named ‘Deregulation Act 2015’ and apply to all ASTs which started or were renewed on or after 1 October 2015. After 1 October 2018, they will apply to ALL ASTs no matter when they started.
The rules which have caused most problems to landlords have been around tenancy deposits. If you don’t protect your tenants’ deposit in a government authorised scheme and serve prescribed information on your tenants both within 30 days of payment of the money to you, then you cannot serve a valid section 21 notice until you have complied with the rules.
In most cases this will mean refunding the deposit money to the tenant. To find out more about this situation, see my Deposit Error Repair Kit where I discuss this in detail.
Less well-known is the rule which says that no valid section 21 notice can be served if the property is an HMO which should have been licensed but isn’t.
This is going to become much more important in future as the government is planning to widen the scope of HMO licensing. But if you let to three or more people sharing – you may be at risk now if your Local Authority has introduced any additional licensing schemes. Have a word with them.
Compliance with Prescribed Legal Requirements
The government is increasingly making a landlord’s right to use section 21 conditional upon them complying with their legal obligations.
Regulations now provide that you can’t serve a section 21 notice unless you have first served on your tenants
- The annual gas safety certificate, and
- A current EPC certificate
Further requirements can be added later if the Secretary of State wishes, so watch out for this list growing.
This is different from the Prescribed Information required for tenancy deposits. In this context the prescribed information means the governments ‘How to Rent’ booklet.
This is only available in electronic format and it is updated from time to time, so make sure you are serving the correct version.
In the past, you could serve a section 21 notice whenever you wanted and the notices lasted as long as the tenancy did. It was common practice to serve it at the start of the tenancy.
When I did eviction work, I regularly based proceedings on section 21 notices which had been served many months, or sometimes years ago.
But no longer. The Deregulation Act provides that you can’t serve the notice during the first four months of the initial tenancy, and has introduced ‘use it or lose it’ rules. So now in most cases, if you have not issued proceedings within six months, you will have to serve another notice.
A New Form
One of the problems with the old system was that there was no official form. We all had to make them up and inevitably people made mistakes.
Thankfully we now have a proper ‘prescribed form’ for landlords to use. So hopefully this will reduce the number of mistakes.
Assured shorthold tenancies have been great for landlords. In many ways, they have been great for tenants too, as it has meant that the private rented sector has grown, giving more choice to tenants.
Some landlords, however, have taken advantage of this to pressure tenants into accepting sub-standard properties by threatening to evict them if they claim their rights. This has been a scandal for many years and tenants organisations have been calling for something to be done about it.
The Deregulation Act finally gave some protection to tenants, providing for section 21 notices to be invalid if a tenant’s complaints are ignored and the Local Authority serves an improvement notice on the landlord for substantially the same issue.
With some exceptions, landlords also cannot now serve a valid section 21 notice within six months of any Local Authority improvement notice served on their tenants.
Claiming Possession under Section 21
Say you are a landlord and you have navigated you way through the regulatory minefield and have managed to serve a valid section 21 notice on your tenants. If they then fail to move out – what next?
You can’t go in and change the locks! That would be illegal eviction which is a criminal offence. You need to get a court order for possession, and then (if the tenants still don’t move out) instruct the Court Bailiffs.
I always advise landlords to use the section 21 ground for possession if they can, even if there are other grounds available (such as the rent arrears ground). The procedure (assuming your notice is valid) is so much more straightforward and there is less that tenants can do to derail you claim.
You can (and should) use the special (but inappropriately named) ‘accelerated procedure’. This is not particularly quick (on average it takes about 6-8 weeks to get a court order) but the decision to make the order is made by the Judge on the paperwork – meaning that there is no Court Hearing.
An Alternative to Using Section 21
If you are renting out your own home – either somewhere you have lived in the past, or somewhere you intend to live in the future (e.g. as a retirement home) – you may want to consider using ‘ground one’.
This is a mandatory ground for possession under the Housing Act, but you need to have served a notice on the tenant at the start of the tenancy warning your tenants that you may be using it.
Provided you have done that, you don’t need to worry too much about the myriad complexities of section 21.
Keep Yourself up to Date
We have had numerous changes to the section 21 regime over the years and I suspect this is not going to change. Just another reason why landlords must take care to keep themselves informed and up to date.
Reading this blog regularly will help, plus you can also sign up to my Critical Information Mailings free of charge.