Note that we are only talking about assured shorthold tenancies here as only assured shorthold tenancies are subject to section 21.
All statute references are to the Housing Act 1988 – although many of the sections referred to are new ones inserted into the act by the Deregulation Act or new statutory instruments, and so at the time of writing not appear yet in the legislation.gov.uk website.
These new rules only apply in England.
Tenancy Memorandum are what I have always referred to as renewal forms.
They are used by agents to give a tenant a new fixed term, and sometimes a new rent, without the need to issue a complete new tenancy agreement.
They are in effect saying that the tenant is entitled to another six months (or whatever) in the property under the same terms and conditions as the previous tenancy.
How do Memoranda work under the new rules?
In most cases when a fixed term ends, the tenancy itself ends by what lawyers call ‘effluxion of time’. Any tenancy which follows will be a new tenancy – either a periodic tenancy arising because of section 5 of the Housing Act 1988 or because of a new tenancy agreement or memoranda.
We saw this in the Superstrike case and its effect on deposits – in particular the need to re-serve the prescribed information – which need has now been taken away by the Deregulation Act 2015.
However, Memoranda are what the act describes as ‘replacement tenancies’.
These are described by the Housing Act in section 21(7) which reads:
For the purposes of this section, a replacement tenancy is a tenancy—
(a) which comes into being on the coming to an end of an assured shorthold tenancy, and
(b) under which, on its coming into being—
(i) the landlord and tenant are the same as under the earlier tenancy as at its coming to an end, and
(ii) the premises let are the same or substantially the same as those let under the earlier tenancy as at that time.
The effect of the new rules is governed by section 41 of the Deregulation Act.
This says that the new rules will only apply to ASTs in England granted on or after 1 October 2015 (which is the day the provisions came into force). They will not apply to statutory periodic tenancies which start after that date.
So this means that they must apply also to renewals created by memoranda – as they will be a new tenancy.
However, section 4(B) which prohibits serving a section 21 during the first four months of a new tenancy specifically excludes replacement tenancies (and also excludes periodic tenancies arising under s5).
In replacement tenancies, the first four months where you cannot serve a section 21 notice, are to be taken as the first four months of the original tenancy.
As they are not specifically excluded (like they are for the 1st four months rule), the other new rules must therefore apply to renewals. These will be:
- The need to have served a gas safety certificate, energy performance certificate and the How to Rent booklet
- The anti retaliatory eviction measures
- The need to use the new prescribed form
What about contractual periodic tenancies?
This is where the periodic tenancy which follows a fixed term arises because the tenancy agreement says it will rather than because of section 5.
As this will be a continuation of the original tenancy and not a ‘new’ tenancy (in the way that a memorandum / renewal form is), it will not be affected by the new rules.
It should also follow that if a fixed term is granted as a result of an option given in the original tenancy agreement – this will also not be a new tenancy and so will not be affected by the new rules. This is less common, however.
All change on 1 October 2018
Section 41(3) provides that after three years from the date the provisions come into force (ie on 1 October 2018), the new rules will apply to ALL assured shorthold tenancies.
So that will mean
- New tenancies
- Replacement tenancies and
- Periodic tenancies (however they came into being).
Until that time however things will be a bit complicated as we will have to check what set of rules apply to a particular property.