Landlord Advice UK Tenant Eviction Service For Landlords

Section 21 Notice & Repayment of Rent

Serving a valid Section 21 notice is a critical step for landlords seeking possession of their property. However, mistakes in the notice, especially around expiry dates, are common and can render the notice invalid. This guide explains the technicalities of Section 21 notices, the implications of the Deregulation Act 2015, and how to handle rent repayment if tenants vacate before the paid rental period ends.

Common Issues with Section 21 Notices

One of the most frequent mistakes landlords and agents make when drafting a Section 21 notice is inserting the wrong expiry date. For periodic tenancies (tenancies without a fixed end date), the original requirement under Section 21(4)(a) of the Housing Act 1988 was that the notice must specify possession “after the last day of a period of the tenancy.” Failing to meet this technicality often invalidated the notice.

Changes Introduced by the Deregulation Act 2015

The Deregulation Act 2015 amended the requirements for serving Section 21 notices in England. Effective from 1 October 2015, Section 35 of the Act removed the requirement for notices under Section 21(4)(a) to align with the last day of a tenancy period. However, this change applies only to:

• Tenancies in England.
• New tenancies commenced on or after 1 October 2015. Replacement tenancies (where tenants continue under new agreements with the same terms) are not included.

For tenancies that began before 1 October 2015, or for those in Wales, the original rules under Section 21(4)(a) still apply.

What Happens if a Tenant Vacates Early?

A common scenario arises when a tenant vacates the property before the rent period they have already paid for ends. As most tenancy agreements require rent to be paid in advance, tenants may be entitled to a refund of rent for the days they did not occupy the property.

This situation is governed by Section 40 of the Deregulation Act 2015, which provides a clear formula to calculate the amount of rent to be refunded.

How to Calculate a Rent Refund

The Deregulation Act outlines a simple formula for calculating the repayment of rent to tenants who vacate before the end of a rental period. The formula is:

Refund = (R × D) ÷ P

Where:

• R is the rent paid for the final rental period.
• D is the number of whole days the tenant did not occupy the property in the final rental period.
• P is the total number of days in that rental period.

Example Calculation:

• Rent paid for the final period (R) = £900 (monthly rent).
• Tenant vacates 10 days before the end of the period (D) = 10 days.
• Total days in the rental period (P) = 30 days.

Refund = (£900 × 10) ÷ 30 = £300

In this example, the tenant is entitled to a refund of £300 for the 10 days they did not occupy the property.

Practical Considerations for Landlords

1. Serve the Notice Correctly:
   Ensure the Section 21 notice is valid and complies with the relevant legal requirements. For tenancies starting after 1 October 2015 in England, the updated rules under the Deregulation Act apply, simplifying the notice process.

2. Document the Process:
   Keep clear records of when the notice was served, its contents, and any communication with the tenant. This can be crucial if disputes arise.

3. Handle Rent Refunds Transparently:
   If the tenant vacates early, calculate the refund promptly using the prescribed formula and provide the tenant with a breakdown. Doing so demonstrates professionalism and reduces the risk of disputes.

4. Understand the Legal Framework:
   For older tenancies or those in Wales, the original requirements under Section 21(4)(a) remain in force. Consult legal advice if unsure about the rules that apply to your tenancy.

Conclusion

A properly served Section 21 notice is a cornerstone of regaining possession of a rental property. The Deregulation Act 2015 simplified some of the procedural requirements, but landlords must remain diligent to avoid mistakes, particularly around notice expiry dates. Additionally, handling rent refunds fairly and accurately is essential for maintaining good landlord-tenant relations and ensuring compliance with legal obligations.

By understanding the current laws and employing best practices, landlords can navigate Section 21 notices confidently and avoid unnecessary complications.