Important Changes To Section 21 Explained

Important Changes To Section 21 Explained
This guest blog post is from Fixflow . Fixflow is an online property management tool that that saves property managers and landlords time and money when dealing with repairs. Plus, it allows tenants to have repairs carried out more quickly. Fixflow software is being used by a number of Martin and Co offices throughout the UK. This post outlines changes to Section 21 – what the changes are, what it means to you as a landlord and what you can do now in preparation. It is originally posted on the Fixflow website here.

Download the Fixflow and ARLA flyer, which explains these changes to Section 21.

[caption id="attachment_91960" align="alignright" width="212"]Section21_infographicjpg Click to view in detail[/caption] The ChangesImagine if a failure to carry out repairs meant that a landlord could not regain possession of their property at the end of a tenancy. On 26 March 2015 the grant of Royal Assent to the Deregulation Act marked a large step in that direction. What Happens Now? At present, unless a tenant is at fault their landlord has to follow a prescribed process to regain possession of their property. This process involves serving a notice pursuant to section 21 of the Housing Act 1988 (s21 Notice). What Is Changing? In broad terms a landlord will not be able to validly serve a s21 Notice to regain possession of their property if:
  • their tenant has made a complaint about the condition of their property;
  • the landlord or their agent has not provided an adequate response within 14 days;
  • the local authority serves an improvement notice (Cat 1 or 2 Hazard) or an emergency remedial action notice.
What Does This Mean For You? First, in order to benefit from protection from retaliatory eviction a tenant must submit their complaint about the condition of their property in writing unless they do not have an effective method to communicate in writing with their landlord or their landlord’s agent. Having a complaint in writing is of benefit to both the tenant and whoever manages their property as it provides a clear record of the exact complaint and the trigger point for providing an adequate response. This means that it is in your interest as a property manager that your tenant knows how to contact you in writing. Secondly, a landlord (or their agent) must provide an adequate response to a complaint within 14 days. An adequate response is one that states the remedial action that will be taken and sets out a reasonable period for that remedial action. This means that it is crucial that the tenant's written complaint contains sufficient detail for the landlord (or their agent) to understand the issue in order be able to provide that adequate response. Without the legislation having any obligation on a tenant to provide this level of detail, it is of increased importance for landlords and professional property managers to equip their tenants with the tools they need to provide them with this information. What Are The Limitations? In order to protect landlords from vexatious complaints from a tenant a s21 notice will not be invalid if:
  • the tenant failed to use the property in a tenant like manner; OR
  • the disrepair is due to a breach of a tenant's obligation in their tenancy agreement; OR
  • a mortgagee is seeking recovery of a property under a mortgage that was in place before the tenancy commenced; OR
  • when the s21 notice is served the property is genuinely on the market for sale.
In addition by using the local authority as the arbiter for the materiality of the disrepair landlords should be protected from being unable to regain possession for minor issues of disrepair. What's The Upshot? Any failure to deal with repairs properly could become a lot more expensive. From your client’s perspective, unless a property is properly maintained they may not be able to re-let their rental property for six months from the date on which a local authority serves an improvement notice (Cat 1 or 2 Hazard) or an emergency remedial action notice. From your perspective, the liability and reputational consequences of missing repairs have become far more serious. The Fixflo 2014 Rental Repairs Survey (carried out before this amendment was proposed) highlighted that 56% of property managers knew a landlord who changed letting agency due to a repair related issue. This number looks likely to rise unless letting agencies put in place robust processes for handling written repair requests. There is also a high level of public awareness of retaliatory eviction with over 17,000 signatories in favour of a recent (but unsuccessful) Bill to prohibit retaliatory eviction and widespread press coverage. This means that letting agency staff are likely to be asked about the changes by existing clients, prospective clients and tenants. Common Parts The new law will also affect block managers and estate managers, as disrepair of common parts that a tenant can use and in which a landlord has a controlling interest can prevent a landlord from regaining possession of their property. This means that the relationship and information flow between letting agents and block managers will need to be robust in order to protect their mutual clients’ interests. What Can You Do? Don’t panic but do prepare. If you manage properties on behalf of landlords/freeholders you should review your repair management processes and we suggest the following checklist to get set for the new law:
  1. Get prepared for written repair requests to become the norm. Put a written repair reporting structure in place so your property management team does not have to wade through flowing prose to work out what has actually gone wrong.
  2. Consider how written repair requests will affect your team if your tenant base speaks a range of languages. The legislation provides for tenants to report repairs in writing but doesn’t say that reports have to be in English.
  3. Make sure that you have processes in place to ensure that no repair is ever missed. An audit trail of each repair request from start to end will help to show not only that you acted correctly but allow you to evidence that you have done so.
The section 21 changes come into force on 1st October 2015 and will apply to an AST granted on or after this date. At Martin and Co, we have a wealth of experience in working with landlords and are always here to provide advice. We also have a range of articles on the blog aimed at landlords here. To read past #FeatureFri guest blog posts, search #FeatureFri on Twitter or check out all #FeatureFri guest blog posts on Martin and Co Today You can also download our ten-step New Landlord checklist. We advise that you download and print it help you - it has been designed for first time Landlords but can also be used as a useful reminder for even the most experienced Landlords. Disclaimer: Guest blog posts on the Martin and Co blog are written by external companies. Martin and Co do not endorse the products or services of these companies.