Rent arrears - served with Section 21

[gkmotorsport]

Hi all - sorry in advance for the essay, but I'd be grateful for any advice.

 

We forgot to pay the rent at the beginning of this month - my wife handles the bills as I have a mental health problem which affects my memory, and we had worked out the stress of bills makes it worse, but as she now handles most of the household I really can't blame her for a solitary mistake. I have been in quite poor health recently, and she has been particularly badly treated by our employer, so it's been quite stressful for some time.

 

She hadn't realised that she had forgotten, but today we received an S21 notice from the landlord, dated the 22nd Jan and stating they require possession from the 29th March. It was only after seeing this that she checked back through our accounts and realised the mistake.

 

I am assuming that the S21 is as a result of this, but I'm not 100% sure - we've had no other contact from them for months, other than the occasional pre-paid envelope to send any errant mail to them, nor have we had any problems. The only rent-related issue was a couple of months' over-payment when I was in charge of it, which they righted without quibble.

 

The complication is that the house is currently for sale, and we are additionally planning to emigrate around the middle of the year. If we were to leave at the end of March, that would really affect our planning as we're only likely to get a minimum 6-month tenancy anywhere else. If we cut our losses and leave ASAP, giving one month's notice, we would obviously still owe the arrears.

 

I'm just looking for some advice on how to approach this. I plan to write to the LL and offer extra on top of our normal rent each month to catch up, but I'm not sure whether to also give them notice to quit. In order to keep up with our plans, we would need to find somewhere else within the next 5 weeks, assuming a 6-month tenancy. To further complicate things, the wording of the cover letter for the S21 seems to imply that the tenancy could still continue!

[mariner51]

When did T commence and for what fixed term?

Any deposit taken and duly protected?

 

 

s21is a 'no fault' Notice meaning no reason is required. Yes the rent oversight may have been the trigger and used as a 'reminder' or pre-emptive if house is up for sale and LL wants vacant possession before completion.

It is not a Notice to Quit as it only allows LL to seek repo after expiry date, This Court process could take 1-2 months after expiry of s21.

If you intend to move on/by expiry to avoid possiblility that LL may apply for Court costs (£175) aqainst you, you are still required to serve due NTQ.

The tenancy will continue it's normal course, until so ordered by Court or you vacate voluntarily, so SPT will ensue at end of fixed term if not already periodic. The SPT Notice will stay 'live' for duration of current AST.

 

 

I suggest you pay rent owing to date and apologise to LL for 'screw up'. Most LLs want T's to stay until close to sale contracts exchanged

and you are hoping to stay until mid 14. The shorter the delay between dates, the easier to justify temp accom &B, rather than another Let.

 

 

Explain position and negotiate with LL, we can be human.

[gkmotorsport]

Thanks for the quick reply!

 

The tenancy began on 29th March 2012, as an AST. It was renewed last year, but I'm not sure if it was another AST or if it became a SPT - we didn't get a new agreement. The deposit is protected properly in one of the major schemes - after trouble with our last letting agent, we made sure of this! We were given an S21 when we moved in, dated a year from the start date, but a new one was not issued in 2013.

 

Because of the timing, I fear that we may have to move early, but I'm just curious about the wording of the 'cover letter' for the S21. Copied below:

 

Dear Mr and Mrs gkmotorsport,

 

Re: The house

 

Please find enclosed the Section 21 (1) (b) notice.

 

This replaces any previous Section 21 (1)(b) notice issued.

 

The Section 21 states that from 29th March 2014 your landlord is entitled to take back possession of the above property. However, should your tenancy be renewed again a new Section 21 (1) (b) notice will be issued.

 

Yours sincerely

 

 

Mr and Mrs Landlord

 

I know that this may be a form cover letter, but it does read to me that they might be open to extending past the date given. I'm going to write to them with an explanation and apology, but should I query this? Obviously, it would be much better for both of us (I assume) if we stay!

[gkmotorsport]

Hi all,

 

Sorry to bump, but does anyone have any thoughts on the above? I'm going to write the LL a letter apologising profusely for the missed payment, offering to pay it back on top of our normal payments, and also asking - based on the wording of the letter - under which circumstances they would renew the tenancy. Is that about all I can do at this point?

[mariner51]

The covering letter is misleading and can be ignored. The LL is not entitled to take back possession after 29th March, only that he may seek Court repo order after expiry date.

s21 is not a Notice to Quit, nor are you obliged to vacate by expiry date of s21. If indeed it is a s21 b served during fixed term, the only effect it has is to create a SPT (monthly rolling tenancy) on expiry.

 

 

No need to apologise profusely, just apologise for confusion of bank holiday date over the Xmas holiday (assuming an isolated rent oversight) and say you wish to stay after Mar on a periodic contract (SPT) to save possible renewal fees (if that is what you wish).

Thus you can give min one month Notice when required and s21 remains in effect.

Deal with LL by letter (cc to LA)

[gkmotorsport]

Thanks for getting back to me, and for making things quite a bit clearer. I had a letter ready to go, but I think I'll edit it based on your points.

 

So, am I right in thinking that we can make efforts to pay back the arrears ASAP, request to stay beyond the end of March on a SPT, and they would need to take further action to actually take back possession of the house? I'm just a little concerned that any action they take after March might affect our ability to get a new place through bad references, etc.

[Beatrice Bee]

Some landlords serve a Section 21 right after the beginning of the tenancy to make sure that they will be able to file a possession case when the fix term expires, in case there are rent arrears. The fix term is 6 months in many cases. Your LL seem to want to mean that he will let you stay as long as the property is not sold: the Section 21 was served to ensure that he can commence court proceedings when necessary in case you do not move out when needed.

 

In case of AST, there is no sitting tenants, are there?

[mariner51]

Of course there are sitting Ts until the AST is legally ended.

A sitting T does not prevent sale, only the price.

[gkmotorsport]

Thanks for the replies, guys - this has been really helpful. Unfortunately, the landlord called this morning about the rent arrears - he seemed ok with the fact we will be paying it back, but also made the purpose of the S21 clear - in his words, "just make sure [letting agent] has the keys back on the 29th.

 

Obviously, that request goes against what I've learned from your replies, but it does mean we now need to be out by the end of February to ensure our own plans aren't made more complicated! I am going to write our notice letter today and send it by special delivery - do I need to say anything other than we intend to vacate the property, and this is our notice? I'm not sure if undercutting his own notice matters?

[gkmotorsport]

Ok, more confusion - sorry about the repeated questions!

 

I have read that the notice to quit needs to be 1 month if it is a monthly SPT. Our rent is payable on the first of the month. If I serve notice to quit on the 1st March, and send it by special delivery to ensure it gets to them tomorrow, what are the implications if it is delayed? I have read in one place that we would be liable for the number of days into the new rental period that it takes us, but then read elsewhere that we would need to stay for an entire month extra. If anyone has a quick answer to this, I'd be very grateful!

[mariner51]

Not that simple, a SPT Notice can only expire at end of a T period, which may not be a rent due date.

 

 

Assuming T commenced 29th March 12 for 12 month fixed term, expired 28th March 13. Rent payable in advance per cal month, SPT commenced 29th March 13 so T period is 29th - 28th of month.

LLs s21 should state that possession is required "after 28th March" (wording is important).

If you post NTQ tomorrow it will be deemed served by 28th Feb (last day of T period) and will expire on 28th Mar (your move out day).

You have missed the deadline to vacate at end of Feb. Of course you can move out on Mar 1st but will remain liable for rent & property to Mar 28th and most ASTs state 'property must not be left empty for more than 21 days'.

You could always negotiate an early surrender with LL.

As previously stated, the s21 is not a Notice to Quit & you are not obliged to vacate on expiry date of s21, but if you do not than LL may ask to have costs of repo hearing (£175) applied against you. So send your NTQ (not rescindable) before the 28 Feb, allowing 2 wotking days for service (delivery) by First Class post and get a free Cert of Posting from PO counter.

Move out on 28 Mar otherwise you may be liable for another months rent and/or Court repo fee

[gkmotorsport]

Ok, I think I have succeeded in confusing myself!

 

Not that simple, a SPT Notice can only expire at end of a T period, which may not be a rent due date.

 

Assuming T commenced 29th March 12 for 12 month fixed term, expired 28th March 13. Rent payable in advance per cal month, SPT commenced 29th March 13 so T period is 29th - 28th of month.

 

I have dug out the original documents - the tenancy commenced on the 31st March 2012, for a fixed term of 12 months. The wording isn't particularly clear, but in the section on renewal it does say that it can be continued on a period basis after the 12 months is complete, for which we would pay £100 and be issued with a new agreement. We agreed to continue verbally; no money was exchanged and no new agreement was issued.

 

LLs s21 should state that possession is required "after 28th March" (wording is important).

If you post NTQ tomorrow it will be deemed served by 28th Feb (last day of T period) and will expire on 28th Mar (your move out day).

 

The notice says "Expiry date. The Date this notice expires on is: DATE 29th March 2014"

 

...this seems incorrect to me. Shouldn't it 'expire' on the 31st, based on what you have said? It also mentions in more than one place that the notice concerns an AST, which our tenancy agreement suggests we are no longer on.

 

You have missed the deadline to vacate at end of Feb. Of course you can move out on Mar 1st but will remain liable for rent & property to Mar 28th and most ASTs state 'property must not be left empty for more than 21 days'.

You could always negotiate an early surrender with LL.

 

Well, this could be the painful bit. If the notice should actually expire today, we're still too late, aren't we?

[Irksome]

Were you re-served the prescribed information at the expiry of your AST? At that point your tenancy became a SPT, and you should have been given the prescribed information. if you were not, then your Section 21 is not valid. Also is your deposit held with MyDeposits or one of the other services? If its MyDeposits then have you checked to see that your deposit is still protected - they automatically unprotect deposits when a tenancy rolls into a SPT and the LL doesn't inform them.

[gkmotorsport]

I'm being dim here, but I'm not sure what you mean by prescribed information, even though I feel like I should know! I can tell you that we received no new documents when it was renewed - it was a case of them visiting, telling us that the house would be going on the market, but that they were happy for us to stay until it sold.

 

I don't have the deposit info to hand, but I'm pretty sure it is not with MyDeposits as I do not recognise the name at all.

[Irksome]

If you were not served the prescribed information then the S.21 notice you've been issued is potentially invalid. Google Prescribed Information for futher details.

 

This is all to do with the Superstrike case, and AFAIK has not yet been tested in court, however it appears that when a tenancy rolls over from a Fixed Term to a SPT, the law considers that a new tenancy and as such the deposit must be re-protected (or protection renewed) and the prescribed information ( the certificate and accompanying notes) must be re-served. If they are not re-served within 30 days then a breach of the legislation occurs and the tenant is able to claim between 1 and 3 times the deposit (+ the original deposit) as a penalty and a Section 21 notice may not legally be served until such time as the prescribed information is served or the deposit is returned (in full - and that doesn't preclude your right to the penalty award!).

 

For your circumstances this may give you the breathing space you require, at least as a delaying tactic without getting all legal on them.

[mariner51]

Going on OPs revised dates for T, it started on 31 Mar 12 and unless a diff expiry date was stated, it ended on 30 Mar 13 and SPT commenced 31 Mar 13, T period 31 - 30th of each subs month.

I think 30 Mar 13 pre-dates the 'superstrike' ruling, which is therefore not applicable.

The OP seems to have some deposit info, whether it is reqd PI is unknown. s21 validity will be decided by Court at s21 repo hearing. NTQ to vacate before end of March.

 

 

OP Yes you are too late to serve NTQ to vacate T before end of March as cal dates refer to first (1st) of month and last day of month (which can be 28, 30 or 31st).

[Irksome]

Sorry to disagree with you, but I think you missed the point about the Superstrike ruling (which is why its thrown the lettings industry into chaos).

 

The key point of the Superstrike ruling is that when the Tenancy changes from a Fixed AST to a SPT AST then a new T is created.

 

The implication is that therefore the deposit may need to be re-protected or renewed (depending on the scheme rules) and the prescribed info must be reserved in order to follow the legislation about protecting deposits.

 

Just because the ruling was made in June 2013 isn't relevant, its clearly retrospective as it applied to a T that became an SPT AST in January 2008. Unless its subsequently challenged and changed by the Supreme Court or Statute (which I don't believe happened in the Localism Act of 2012 that the deposit relates to a new T and therefore must be treated as such.

 

I am both LL, and a T with affected Tenancies and also work for several estate agencies and have been watching as they scramble to sort this mess out, SPT's all being turned into new fixed term tenancies and deposits being re-protected en mass.

[gkmotorsport]

Hi again - thanks again for the extra information; I've read up a bit more on Superstrike and also reminded myself what prescribed information is!

 

I have dug into my documents some more and noted the following:

 

- The tenancy did indeed start on the 31st March, to end on the 30th.

- The deposit was originally protected with DPS.

- It has not been submitted correctly, according to DPS' terms. The tenancy is a joint one between me and my wife, but the deposit only has me listed as a tenant. This could have been awkward, as it is her money! Oddly, the tenancy agreement has a section marked 'prescribed terms', which simply lists both of our names, our previous address, and the name and address of LL.

- Not sure how much it matters, but the 'deposit ID' for logging into the DPS site is missing.

 

If one of the prescribed terms is the name and address of each tenant, where a joint tenancy exists, does that mean they have failed to serve the prescribed information? If so, that applied from day one.

 

Secondly, is the current S21 invalid if it expires on the 29th?

[Irksome]

It appears that you have ample grounds (too many perhaps) to argue that the S.21 notice you've been served is invalid. What you do next is a matter for you to weigh up, but it appears clear to me that if you want to stay in this property, at the moment (and don't go more than 1 month in arrears or breach any of the terms of your tenancy) the LL has no chance of getting you out by legal means.

 

Just remember, you may need to prove your evidence / arguement. I would suggest its unwise to inform your LL of any of the evidence you may be relying on as it wouldn't take much to come up with a counter defence.

[gkmotorsport]

Ok, thanks for the quick reply. On the theme of too much evidence, I have also just spotted that the LL has entered the letting agent's name and address in the 'Landlord' field in the prescribed information - I'm sure this is wrong, as the LA aren't even managing it for them.

 

We would like to stay, as it then makes our longer-term plans much more simple. Everything I've mentioned is there on the paperwork, so I guess it's just a case of keeping it safe, right? The situation as a whole has caused us both quite a lot of stress, especially as the house could still sell in the meantime. We're also a little alarmed at the idea of the LL becoming a problem if we clearly have no intention of moving out after the 29th. We have two young children and don't really want to end up having the sort of doorstep arguments you often read about!

[Irksome]

Its a tricky situation you find yourself in ... but you're empowered by having the information available to you.

 

I too have too very young children, and can empathise with your situation, and to a certain extent I can understand the position of your LL - but I think you have to put yourself and your family first.

 

If you fight undoubtedly it will be stressful - how stressful is really up to you and how much you believe in your position and how certain you feel your legal position is, we can only advise you but you should get some independent advice.

 

The idea of your LL (or a 'representative' turning up at the doorstep is uncomfortable, but if you prepare for that eventuality then you can be sure to say the right things - ie please go away and put this in writing.

 

I wouldn't be particularly bothered if the house 'sells', they aren't likely to complete if your tenants, and even if they do, the whole process resets with the new LL.

 

If you show your hand now it could weaken your position, however you could decide to talk to your LL and explain (maybe not too precisely) that you think your position is quite strong and that you'd like to negotiate an extension to the tenancy to end on a set date - ie you agree to vacate on X date rather than resorting to the courts decision which would be expensive (for the LL).

[mariner51]

Irksome, so you think Superstrike ruling applies retrospectively, contrary to common sense?

I refer you to the My Deposits website Q&A page that opines it only applies to SPT that were created after 14 June 13 (the date of the ruling)

 

 

Otherwise, every LL since Apr 2007, that did protect the deposit as required at the time, could be sued for deposit non-protection, by all Ts with a SPT from after Apr 2007 thnks to a 2013 ruling.

[gkmotorsport]

Ok, well I feel a bit better knowing that the prescribed information may well be wrong. We're going to speak to Shelter today to see what they suggest.

 

From my (IANAL) understanding, if a precedent was set by the Superstrike case, the law would have to be interpreted the same way in all cases containing the same material facts (i.e. switch from AST to SPT, deposit not re-protected), which would explain why there does appear to be concern in the industry. However, that's just my opinion amongst many others!

[Irksome]

The Superstrike rules does apply retrospectively, because its the first time the law has been clarified on the point of whether a tenancy 'renews' when going from Fixed Term to SPT, or whether the tenancy is a new T.

 

If you look at the actual case, the high court ruled that when the T rolled from fixed term to SPT a new T was created and at that point it was necessary for the LL to protect the deposit and serve the prescribed information. This applies to all tenancies where they roll into a SPT, whether the deposit was originally required to be protected or not.

[Irksome]

With respect to the My Deposits site, the latest opinion on it is available in the joint guidance issued by all the schemes.

 

Where a deposit is already protected and the tenancy has

been renewed (either a statutory periodic tenancy or with

a new fixed term)

There is significant speculation about the impact of the Superstrike decision on:

• deposits relating to statutory periodic tenancies which were created when an assured shorthold

tenancy with a protected deposit expired; and

• deposits relating to a renewal of an assured shorthold tenancy with a protected deposit.

The decision in Superstrike confirms that a statutory periodic tenancy is a new tenancy.

This begs the question whether the deposit that has already been protected, needs to be re-protected,

and PI re-served. It should be stressed that these issues were not directly addressed in Superstrike but we

would suggest that this could be an argument made for a tenant in any future case.

In these circumstances, if a Court was persuaded by these arguments then a landlord who had either not

re-protected the deposit or with a protected deposit who had not served the Prescribed Information on the

renewal of the tenancy or the creation of a statutory periodic tenancy, might be unable to serve a section 21

notice. They might also be subject to a financial penalty of between one and three times the deposit (plus the

return of the deposit itself).

Our Position

Confirm that the deposit is protected by an authorised scheme

Where a deposit was protected in relation to a tenancy, which has now become a statutory periodic tenancy

or been renewed for a further fixed term, you should check that it remains protected by the scheme.

Prescribed Information, including supplying a copy of the scheme leaflet

If you have not served the Prescribed Information at renewal of the tenancy or it becoming a statutory

periodic tenancy there is a risk that a Court might find that you have not complied with the legislation and

not allow you to use the section 21 procedure. In addition you may find that you are subject to a financial

penalty for not serving the Prescribed Information.

 

If the law is not retrospective, then the actual Superstrike vs Rodriguez case couldn't have been found for the plaintiff - ie if it were not retrospective then the court would not have found it applied to a T that rolled into a SPT in January 2007.

Edited February 2, 2014 by Irksome
Addendum