Is the section 21 notice now a risk?

Is the section 21 notice now a risk?

10:39 AM, 19th August 2013, About 11 years ago 42

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Under Section 21 of the Housing Act 1988, once an Assured Shorthold Tenancy (AST) agreement has come to an end, a landlord has the legal right to recover possession of their property should they wish. Is the section 21 notice now a risk?

A landlord wishing to re-gain possession of a property is required to serve a Section 21 Notice to tenants. They do not have to give any reason for ending the tenancy.

There are strict rules for landlords to follow when evicting tenants. Under an AST, they must ensure that the tenancy has run for at least six months and that the initial contract term has finished. Landlords have a duty to protect deposits in a suitable holding scheme and to serve the correct notices using Section 21. There are two types of Section 21 Notice and it is important the right one is issued. If the tenancy is still within the contracted fixed term, the S.21 (1)(b) Notice should be served. Where the fixed term has ended and the tenancy has become a periodic agreement, the S.21 (4)(a) Notice is used. Landlords must give at least two months notice before evicting tenants. If the tenant does not vacate within the timescale, a court possession order can be obtained. Following this, if occupants still won’t leave, the landlord can apply again to the court for bailiffs to assist in tenant eviction.

Before going to court it is imperative that protocols have been followed properly. The appropriate notices need to have been served correctly and in a timely manner. According to the Chairman of the London Association of District Judges, a high percentage of eviction notices are being dismissed out of court due to mistakes made in their issue.

Previously, properly served Section 21 Notices have usually proved effective. Wishing to avoid the issue of going to court, tenants nearly always left within the requisite two months. However, it has recently become popular for councils to refuse a Section 21 notice as evidence of tenant eviction. They prefer to wait until the case has been brought to court and a possession order granted before re-homing individuals. As this process can take several weeks or months, it gives councils additional time to relocate tenants. However, it can be financially devastating for landlords, especially if the tenant is not paying rent.

The new Universal Credit system is also causing concern for both landlords and tenants. Previously, benefits were paid to claimants in separate instalments and rent paid directly to landlords, but tenants will now receive one payment, including housing benefit, from which they will need to pay their rent. Only a small percentage of tenants fail to pass rent on to their landlords. However, the new system could potentially see more individuals struggling to manage their finances effectively and the risk of rent arrears will increase. In addition, there is apprehension over proposals to recover arrears by reducing payments to the claimant and paying a percentage directly to the landlord. This could place tenants in an even more vulnerable position and the landlords will only recoup lost rent over very long periods of time and risk further arrears in the future.

It seems inevitable that the long-term result will be more landlords withdrawing from the social-housing sector, with the gap between supply and demand only increasing.


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Mary Latham

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14:43 PM, 20th August 2013, About 11 years ago

Reply to the comment left by "Tony McVey" at "20/08/2013 - 14:20":

As you will see from the post from Landlordzone the tenancy period has nothing to do with the rent payment date it goes from the start of the tenancy date.

"under which the periods of the tenancy are the same as those for which rent was last payable under the fixed term tenancy; and"

This is saying that the periods are the same as the rent payment periods it is saying that the periods are the same as the last tenancy where rent was payable.

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14:55 PM, 20th August 2013, About 11 years ago

Reply to the comment left by "Tony McVey" at "20/08/2013 - 14:20":

5(3)(d) states that the relevant tenancy period length is the duration that rent was last payable for.

Where a fixed term tenancy is for any length of time other than an exact multiple of rent payment periods then caution is advised. If we follow an example based on the frequent 6 months and a day tenancy period running from 24/4/13 to 24/10/13. There are 6 straightforward rent periods of one month each from the 24th to the 23rd of the month. However, the last rent payment period is for one day. It can not be more than that because the tenancy ends on the 24th and if the tenant stays in the property, the subsequent periodic tenancy does not yet exist - so rent is not payable on it. Therefore the period that rent was last payable for was 1 day. Meaning each subsequent tenancy period is 1 day long! If you follow my logic, there is no guarantee that a lower court judge will.

I have not used the RLA s21 date checker but I know that other automated s21 facilities would struggle with that. My advice - for anything other than a regular multiple, don't put an expiry date at all - section 21(1)(b) doesn't need it and case law gives us appropriate wording to let the tenant calculate their own expiry dat

Antony Richards

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15:45 PM, 20th August 2013, About 11 years ago

Mary, you are wrong. The S21 notice must be served on or before the day before the next rent is due to take effect the day before the rent is due in two months time. The start date of the tenancy is immaterial.
The rent is due on all of our tenancies on the first day of each month even if they do not start on the first of the month. The period is the calendar month. The only time the rent day is not the effective date is at the end of the fixed term. We make sure all our fixed terms end at the end of the month so there is no confusion

Mary Latham

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16:39 PM, 20th August 2013, About 11 years ago

I am sorry I made an error on this part of my last post
"This is saying that the periods are the same as the rent payment periods it is saying that the periods are the same as the last tenancy where rent was payable."

It should have read

"This is NOT saying that the periods are the same as the rent payment periods it is saying that the periods are the same as the last tenancy where rent was payable.

I have just spoken to the NLA Advice Line Manager and he has confirmed that I am right. He said this

"The start date of the contract is the important date, the rent can be paid whenever it is agreed and that is irrelevant to the contract periods. Where rent is due weekly the rent may be due on a Monday. The tenancy end date may be a Thursday and that is the important date and the one which should be used for the Section 21"

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Mark Alexander - Founder of Property118

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16:51 PM, 20th August 2013, About 11 years ago

I bet Paula is wishing she hadn't asked the question now! Clear as mud? LOL

I am so glad that I serve a section 21 (1) b early into the tenancy. Serving a section 21 (4) a notice once the tenancy has gone statutory periodic is clearly a minefield only to be crossed by the very naive, very brave or very stupid - depending on which way you look at it!
.

Mary Latham

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17:04 PM, 20th August 2013, About 11 years ago

Reply to the comment left by "Mark Alexander" at "20/08/2013 - 16:51":

Or those who know the law Mark. It is an important discussion especially for those of us who are planning to use Contractual Periodic Tenancies in future to avoid deposit protection issues.

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Tony McVey

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17:15 PM, 20th August 2013, About 11 years ago

I would agree with your interpretation of S.5(3)(d) were it not for the phrase " for which rent
was last payable". If you omit this, then your
understanding is clearly correct. The presence
of these words adds a qualifying value to the
language used. Is there any relevant case law
of which you are aware?

Antony Richards

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17:24 PM, 20th August 2013, About 11 years ago

As I read it the advice from NLA is wrong.

The relevant case is Laine V Cadwallader.

'Kennedy LJ: ‘The periods of the tenancy are defined by section 5(3)(d) as being those ‘for which rent was last payable under the fixed term tenancy’

The end date for a S21 (4) is the day before the rent is due. Nothing to do with the start date (although it could be)..,

Mary Latham

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17:51 PM, 20th August 2013, About 11 years ago

Reply to the comment left by "Antony Richards" at "20/08/2013 - 17:24":

This case was about the lengths of the periods of the tenancy not the dates of those periods. Ie if rent is due weekly the tenancy is a weekly tenancy when it goes SPT. If the rent is due monthly the periods for the SPT are monthly. This has nothing to do with the rent due date just the period which the rent covers. It is the contract dates that determine the start of those periods.

If a fixed term tenancy began on the 10th of a month the end of the fixed term would be on the expiry of the 9th of a month. The rent could have been paid on the 1st of each month but that would not change the end date nor the date at which it became SPT if the tenancy continued without another fixed term AST being put in place.

In the case of a Contractual Periodic Tenancy. If the tenancy began on the 10th of a month and the landlord tried to end the tenancy on the expiry of the last day of the 6th month, because the rent was paid on the 1st of each month after the first payment was made, he would not get Possession because the tenants right to 6 full months occupancy would have been breached. He could of course ask for Possession on the expiry of the last day of the 7th month but he could just as well ask for Possession on the expiry of the 9th of the 7th month because that would be the end of the tenancy period.

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Mary Latham

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18:36 PM, 20th August 2013, About 11 years ago

Reply to the comment left by "Tony McVey" at "20/08/2013 - 17:15":

Church Commissioners v Meya [2006] EWCA Civ 821,

", in Church Commissioners the Court expressly rejected the idea of a “symmetry between the statutory provision and the common law rule” when considering the length of a period."

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