Looking at Section 21

This is the third post in my 2017 Legal Update series.

Section 21, as you will know, is the section in the Housing Act 1988 which sets out the rules for ‘no fault’ eviction for Assured Shorthold Tenancies (ASTs).

Section 21 has been both a blessing and a curse to the private rented sector.

• It’s been a blessing as it allows landlords to recover possession of their property as of right at the end of the fixed term (previously under the Rent Act this was impossible) and therefore arguably is the reason why we have a successful private rented sector today.
• It’s been a curse for landlords as it has always been easy to get things wrong and many landlords have come out of Court angry and confused after the Judge rejected their claim due to a defective s21 notice.
• It has also been a curse for many tenants as some landlords (not a majority but a fair number) use it to intimidate tenants into accepting sub-standard property. I will be talking a bit about this later on in the series when I discuss the anti-retaliatory eviction rules.

But today I want to look at notice periods and the two types of notice.

The two types of section 21 notice

The first type of notice

This is set out in section 21(1) of the Housing Act 1988.

This is the ‘easy’ section 21 notice where you just have to give not less than two months’ notice to your tenant and ensure that the notice period does not expire before the tenancy fixed term does.

For a long time, we thought that this type of notice could only be served DURING the fixed term of a tenancy.

Meaning that if you had a periodic tenancy – you had to use the other notice, the one set out in section 21(4).

The second type of notice

This notice (the section 21(4) notice) is more difficult to draft correctly due to the requirement that you must specify in the notice a date which is “the last day of a period of the tenancy and not earlier than two months after the date the notice was given”.

Which means that, in most cases, the notice period will need to be more (sometimes quite a bit more) than two months – and it is essential that the expiry date is correct.

Many, many landlords have had their claims for possession chucked out because they served their notice during a periodic tenancy and put the wrong date in the notice.

Good news – Spencer v. Taylor

The good news now is that in a case called Spencer v. Taylor, the Court of Appeal have held that for the past 25 years we had all been interpreting section 21 the wrong way!

It does NOT, apparently, say that you can ONLY serve a s21(1) notice during the fixed term. In most cases (said the Court of Appeal Judges) you can ALSO serve it during a periodic tenancy!

So now you can (usually) serve the easier section 21(1) notice and not worry about the ‘last day of a period of the tenancy’ date. There are now only two circumstances where you still need to do this:

1. Where there has never been a fixed term. However, this is rare – almost all tenancies in the private rented sector will have a fixed term at least to start with
2. Where the tenancy agreement provides for a contractual periodic tenancy to follow the fixed term. Note that this is not 100% certain (as there is no case law on the point) but for technical reasons it is probable.

So, if you have a tenancy which provides for a contractual periodic tenancy to follow the fixed term, you still need to worry about s21(4) if you serve your s21 notice during the periodic tenancy.

UNLESS the Deregulation Act rules applies.

More good news – the Deregulation Act 2015 amendment (England only)

This says that if your tenancy started or was renewed on or after 1 October 2015 – section 21(4) is amended to remove the need to give the last day of a period of the tenancy.

So, at the moment you only need to worry about s21(4) for pre-October 2015 tenancies and for Welsh tenancies.

However, it gets better – after 1 October 2018, the new rules will apply to ALL ASTs. So, after that you will never need to worry about s21(4) and the ‘last day of a period of a tenancy’ again. Hooray!

Note though that the this only applies in England – as Wales is developing its own set of different rules for housing matters (mostly not yet in force).

In conclusion

I have gone into this in a bit of detail as I know it is something that has always bothered people. But to sum up:

• For most ASTs – just give a straight two months’ notice (provided it does not end before your fixed term does)
• For all tenancies which started or renewed on or after 1 October 2015 – the same applies – provided they are in England.
• You only need to worry about s21(4) notice periods if either there has never been a fixed term, or your periodic tenancy is a contractual one.

But even for those – s21(4) won’t be a problem after 1 October 2018 as the ‘last day of a period of the tenancy’ wording will be abolished for all ASTs (in England).

Further information:

There is a lot of information about all this on my Landlord Law Blog (do a search for section 21).

My Landlord Law membership site has a lot of guidance on section 21 including a guide which you can follow to check that you have complied with all the rules.

Members can also ask me ‘quick questions’ in the members forum area.

You can find out more about Landlord Law here

Next time I will be looking at the pre-conditions for serving a valid section 21 notice.

Tessa Shepperson is a specialist landlord & tenant lawyer and runs the popular Landlord Law online information service.

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