We thought it beneficial to the landlords of Nuneaton to keep up to date on all changes to regulations related to the lettings industry and this one is an important one for anyone who is either currently managing buy to lets or is thinking of doing so.
Until now it was generally considered only a Section 21(4) Notice (expiring on the last day of a period of the tenancy) could be used to obtain possession once the fixed term of a tenancy had run out and the tenancy was continuing as a periodic tenancy. This has been overturned by Spencer v Taylor which means that a Section 21(1) Notice can also be given in certain circumstances. A Section 21(1) notice can expire at any time so long as a minimum of two months notice is given. However it cannot expire earlier than the last day of the fixed term of the tenancy. If you take a deposit it is essential that you have protected the deposit in one of the statutory deposit protection schemes and given the prescribed information (along with the tenant’s leaflet) by the point in time when you give the Section 21 Notice. Otherwise it is invalid. Likewise, if the property requires an HMO or selective licence and there is no licence in force (and one has not been yet applied for) the Section 21 Notice is also invalid.
The position in a nutshell about which type of notice to give
The simple message is this. You can give a Section 21(1) Notice during the fixed term of the tenancy to run out no earlier than the last day of the fixed term. If you serve a Section 21 notice after the end of the fixed term you can use the more flexible Section 21(1) notice rather than the Section 21(4) notice (which to be effective has to run out on the last day of the period of the tenancy) where –
- The tenancy started life as a fixed term tenancy
- It is now running on as a statutory periodic tenancy following the end of the fixed term. If it only makes a few days difference or the tenancy is a weekly tenancy you should stick to Section 21(4). This is because some judges may be resistant to the use of Section 21(1) notices which are given once the fixed term has run out so if you are in no particular hurry or prefer a “belt and braces” approach use Section 21(4) under which the notice must run out on the last day of a period of the tenancy.
IMPORTANT : Serving a Section 21 Notice before the tenancy deposit has been protected
- If you receive a tenancy deposit then this must be protected with one of the Government approved tenancy deposit schemes within 30 days and the tenant must also be given the prescribed information within 30 days after receipt. Traditionally, many landlords have given their tenants Section 21 Notices at the outset of the tenancy as it is easier at that stage to obtain the necessary proof that the tenant has received the Notice. Where a landlord fails to protect the deposit with one of the schemes or does not give the prescribed information, a valid Section 21 Notice cannot be given (although if you fail to give the prescribed information within the 30 day period you can revive your rights to serve a Section 21 Notice – this is not possible if you fail to protect the deposit at all) without returning the deposit to the tenant.
- If the tenancy originally started as a periodic tenancy (not as a fixed term) or the tenancy is running on as a contractual continuation following the end of the fixed term then you must use Section 21(4) so that the notice has to run out on the last day of a period of the tenancy
- This could save you up to nearly an extra month in the case of a tenancy which is running on as monthly statutory periodic tenancy. This depends on when during the month it is served.
If you wish to pick our brains further with regards to the section 21 regulations or in fact any other issues, please give us a call on 02477 674545