This week our Landlord Advice Team looks at rent in advance and periodic tenancies in relation to Section 21 notices.
The introduction of the prescribed Section 21 notice for England in October 2015 caused a few headaches for landlords when it first came in.
Along with remembering all the old rules for service for their old tenancies, landlords had to keep evidence of service of the How to Rent booklet, EPC, and gas safety certificate (where applicable) if they wanted to serve a section 21.
Many landlords also had to get used to serving the notice properly, as it was customary to serve the Section 21 at the start of the tenancy before that practice was banned under the new rules.
It’s not surprising then, that with all these extra rules to keep track of, that many landlords missed one of the more technical issues around the Section 21 notice. Specifically, when the notice needs to be longer than two months.
This week’s call actually started many months ago. The landlord rang us to tell us that he wanted to evict his tenant. This tenant paid rent every six months and was now on a contractual periodic tenancy.
Unfortunately, where a tenancy continues as a contractual periodic tenancy, a Section 21 notice must still match up with the rental periods even though it no longer needs to end on a specific day.
What this means is that, where tenancy periods are longer than two months, the landlord needs to give a longer notice to match.
So, where the tenant pays quarterly on a contractual periodic tenancy, they must give three months’ notice.
Where the tenant pays every six months, as in this case, then the notice had to be six months long.
The landlord was understandably unhappy when we told him this news but did as we asked at the time.
The tenant surrendered the property up after the notice expired and so the landlord called us this week to make sure the same problem didn’t occur again.
We advised him, that his best solution was to take five months’ rent upfront and then take the final rent payment as a month.
By the terms of his contract (much like our new ones and by the law for statutory periodic tenancies), the payment periods of the contractual continuation were defined by the last rent payment taken in the fixed term.
This meant that rent would be due monthly from that point on, and the Section 21 notice they could serve would only need to last two months.
Happy with this the landlord set about arranging this with his tenant.
LAT manager Rupinder Aujla said “The new Section 21 rules can be very complicated and we always say that the best way to solve any problems with it, is to plan ahead.
“We’re always glad when our members phone us before they sign an agreement so we can talk them through the potential pitfalls.”