Deregulation Act 2015 – 1 October 2018 (England)

deregulation act 2015

The Deregulation Act 2015 came into force on 1 October 2015 affecting both landlords and tenants regarding deposits, retaliatory evictions and section 21 notices. Three years on and 1 October 2018 is an important date in the implementation of the full changes brought in by the Deregulation Act 2015.

Files with legislation on Deregulation Act 2015
It has been 3 years since the introduction of the Deregulation Act 2015 and the 1 October 2018 is an important date in the implementation of the full changes.

Deregulation Act 2015 – The legislation

The wording of section 41 of the Deregulation Act 2015 that has an effect on pre-October 2015 tenancies is as follows:

41 Application of sections 33 to 40

(1) Subject to subsections (2) and (3), a provision of sections 33 to 40 applies only to an assured shorthold tenancy of a dwelling-house in England granted on or after the day on which the provision comes into force.

(2) Subject to subsection (3), a provision of sections 33 to 40 does not apply to an assured shorthold tenancy that came into being under section 5(2) of the Housing Act 1988 after the commencement of that provision and on the coming to an end of an assured shorthold tenancy that was granted before the commencement of that provision.

(3) At the end of the period of three years beginning with the coming into force of a provision of sections 33 to 38 or section 40, that provision also applies to any assured shorthold tenancy of a dwelling-house in England—

(a) which is in existence at that time, and

(b) to which that provision does not otherwise apply by virtue of subsection (1) or (2).

Reading the legislation you would conclude that section 33 to 38 and 40 apply to pre-October 2015 tenancies from 1 October 2018.

This is what we were expecting but it is not as simple as this.

Sections of the Deregulation Act 2015 explained

Sections 33 and 34 of the Deregulation Act 2015 refer to retaliatory evictions and these do not require further regulation, therefore they will come into force on 1 October 2018 for all assured shorthold tenancies created before 1 October 2015. It is not quite clear how any transitional situation might work, for example if an improvement notice was served in September will that bar the use of the section 21 for 6 months from September (or from October)?  There were no specific rules about this transition, however it will not apply to many situations so should not be of too much consequence.

Section 35 of the Deregulation Act 2015 removes the need (in a periodic tenancy) for a landlord’s section 21 notice to expire at the end of a period of the tenancy.

It is important to understand that this now supersedes the decision in the case of Spencer v Taylor [2013] EWCA and it applies to all periodic tenancies, not just statutory periodic. From 1 October 2018, section 35 will apply to all periodic section 21 notice, even if the original tenancy was an assured shorthold tenancy from before 1 October 2015. This provision will not prevent serving to a certain date being a contractual requirement.

Section 36 of the Deregulation Act 2015 states the landlord may not serve notice within the first four months of the first tenancy.

Although technically section 36 will apply to all tenancies that started before 1 October 2015, this will have no effect in practice as we are well past them being in their first four months. The second rule under section 36 is that the section 21 notice will only be valid for six months from the date of service.

In the event that the six month window is missed a new Section 21 notice will need to be served.

This rule will have an effect if you have already served a Section 21 notice on a pre-October 2015 tenancy that notice will cease to be valid on the 1 October 2018 (or six months after service if later). This is because the wording prevents starting court proceedings more than six months after a section 21 notice is served, without limiting it to notices served after a certain date.

Prescribed Form

Section 37 refers to the section 21 Form 6A.

Section 37 states that regulations need to be written in order to bring in the prescribed section 21 Form 6A.

The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 provided us with the prescribed Form 6A. Section 41 above implies that the prescribed form (section 37) should apply to all assured shorthold tenancy agreements from 1 October 2018.

The regulations prescribing the Form 6A specifically exclude any assured shorthold tenancy granted prior to 1 October 2015. There is no prescribed form for any tenancy created before 1 October 2015, without having a set of regulations that do prescribe for pre October 2015 tenancies it is not a legal requirement to comply with section 37.

In conclusion, the section 21 Form 6A specifically states

This form must be used for all ASTs created on or after 1 October 2015 except for statutory periodic tenancies which have come into being on or after 1 October 2015 at the end of fixed term ASTs created before 1 October 2015. There is no obligation to use this form in relation to ASTs created prior to 1 October 2015, however it may nevertheless be used for all ASTs.’

Prescribed legal requirements

Section 38 requires that “prescribed legal requirements” are fulfilled before a section 21 notice can be served. Regulations define the gas safety record and the energy performance certificate (EPC) as the prescribed legal requirements. As with the section 21 Form 6A, the regulations state that the regulations prescribed (in the current regulations) only apply to post October 2015 tenancies.

Prescribed information

You may have noticed that section 39 is not included within section 41(3) above.

Section 39 refers to the prescribed information. This is prescribed in the regulations as the How to Rent guide.

This is specifically excluded from tenancies that commenced pre 1 October 2015 as the first how to rent guide was first published on 1 October 2015 therefore there would not have been a relevant guide available for tenancies that began pre October 2015.

Section 40 of the Deregulation Act 2015 refers to the requirement for a pro-rata rent refund to the tenant in the event that a section 21 notice expires part the way through a rent period. This will apply to all pre 1 October 2015 from 1 October 2018 and operates in conjunction with section 35 above. It is important to note that this is only applicable when the tenancy ends part the way through a rent period due to the landlord’s section 21 notice and not in the event of the tenant surrendering the tenancy.

Many landlords and agents are expecting the changes to apply to pre-October 2015 tenancies from 1 October 2018 and we would expect this to be the case for many solicitors and probably judges too.

It will be important for landlords and agents to be able to explain why the prescribed items do not apply if they are questioned in court or by the local authority.

The answer being ‘because the regulations say they do not apply’.

Affects of the Deregulation Act 2015 at a glance

To help you understand the application of sections 33 to 40 at a glance we have broken them down, you can see how each section will be affected after 1 October 2018.

DO apply to tenancies pre 1 October 2015

Sections 33 and 34     Retaliatory evictions

Section 35                   End date of the periodic section 21 notice not being to be at the end of a period

Section 36                   Not serving a section 21 notice within the first 4 months of the first agreement

Section 40                   Pro-rata refund when tenancy is ended part the way through a rental period

 DO NOT apply to tenancies pre 1 October 2015 due to lack of new regulations

Section 37                   Prescribed form of section 21 (form 6a)

Section 38                   Prescribed requirements (GSR and EPC)

DO NOT apply to tenancies pre 1 October 2015 as section 41 says they do not apply

Section 39                   How to rent guide

If landlords or agents choose to use the old notice or have not served a How to Rent guide or don’t have evidence of the EPC or gas safety record for a pre October 2015 tenancy, it will be important to understand the points above to be able to justify to the local authority or judge what the law actually says.

For the remaining changes to apply to all assured shorthold tenancies would require a new set of regulations to be made.

Understanding changes to legislation that affect landlords can be a minefield.  We have a team of expert letting executives on standby to help our landlords navigate through the potential pitfalls and common mistakes landlords make. Interesting in getting some support? Browse our lettings packages today.

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