THE DEREGULATION ACT 2015

The Deregulation Act 2015 received Royal Assent on the 26th March 2015, and it has introduced a number of reforms relating to tenancies of properties let on assured shorthold tenancies, of which will have varying impacts on Legal Expenses and Rent Guarantee Insurance.

A summary of these reforms and potential impacts are outlined below:

Section

Summary

Date coming into force

Potential impact on Legal Expenses and Rent Guarantee Insurance

Section 30 - Agents may serve a prescribed information form

Agents are now able to include their details on the prescribed information form and sign it on behalf of the landlord.

Retrospectively from 6th April 2007

No significant impact on claims, but where the agent included their details and signed on the landlord’s behalf prior to the Act coming into place, this may have resulted in proceedings being thrown out of court.

Section 31 - Non- compliance with Tenancy Deposit Rules

If a deposit is not held in accordance with an approved scheme, a Section 21 notice may not be served.

26th March 2015

If required, a deposit must already be held in accordance with an approved scheme for cover to apply, and therefore this change will have nil impact.

Section 32 - Deemed compliance with deposit rules

When a tenancy is renewed or extended, if the landlord, tenants and property have all remained the same, the landlord is deemed to have complied with the deposit protection rules if they complied with the original tenancy, and the deposit also remains in the same scheme.

Retrospectively from 6th April 2007

A key condition of the Tenancy Eviction cover under our Legal Expenses policy is that the landlord must comply with rules, regulations and Acts of parliament relating to the deposit, and the above clarifies the position for deposits taken prior to the 6th April 2007.

Section 33 - Retaliatory Eviction

A landlord cannot serve a Section 21 notice for 6 months after a ‘relevant notice’ has been served on the landlord, and a notice is invalid if served after a complaint is made.

1st October 2015

This may result in difficulties evicting a tenant who has made an unjustified complaint. There may also be delays in local authorities inspecting a property, potentially resulting in a claim being thrown out by the court.

Section 35 - Section 21 (4)(a) notice expiry

A Section 21 (4)(a) notice is no longer required to expire on the last day of a period of tenancy, bringing it in line with Section 21 (1)(b) notices.

1st October 2015

Positive impact which may result in gaining possession of a property quicker.

Section 36 - Section 21 notice ‘life span’

A Section 21 notice may not be served in the first 4 months of a tenancy, and a landlord can’t issue a claim for possession after 6 months from the date the notice was given.

1st October 2015

Full level of impact is unknown at this stage.

Section 37 - Prescribed form of Section 21 notices

The Secretary of State will be able to prescribe the form for serving Section 21 notices.

1st July 2015

No foreseeable impact.

Section 38 - Compliance with prescribed legal requirements

A landlord may not serve a Section 21 notice if they are in breach of a prescribed requirement.

1 July 2015 – power to make provisions

1 October 2015 – compliance with provisions

No foreseeable impact.

Section 39 - Requirement for the landlord to provide prescribed information

The Secretary of State will have the power to prescribe additional information that the landlord must give to tenants relating to the rights and responsibilities of both the landlord and the tenant.

1 July 2015 – power to make provisions

1 October 2015 – compliance with provisions

As long as there is compliance with the terms of the Act, there will be no foreseeable impact.

Section 40 - Appointment of rent at the end of the tenancy

In the event that a tenant has paid an amount of rent in advance, and a Section 21 notice requires them to leave during the period paid for, the tenant is entitled to a full refund.

1st October 2015

No foreseeable impact.

Section 41 - Application of Sections 33-40

After three years from the 26th March 2015, all provisions, except Section 39, will apply to all assured shorthold tenancies.

1st October 2015

No immediate foreseeable impact other than outlined above.

 

For further information about the reforms, please contact your account manager, or email marketing@arclegal.co.uk

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