A guide on section 3 – notice of a change of landlord

Home $ What documents do I need to rent a flat in the UK? $ Landlord and Tenant Act 1954 $ A guide on section 3 – notice of a change of landlord

The Landlord and Tenant Act 1985 is a key piece of legislation in the UK that includes section 3. The Act covers the right of tenants in their rented property. Section 3 of the act is important because it ensures that tenants know who their landlord is at all times without having to request this information themself.

This article will provide an overview of how to issue a notice of section 3 for landlords and explain why it is an important part of the legal framework that makes sure landlords and tenants are both respected and feel like they can communicate with each other if they want to.

This part of the law is interesting because unlike the parts of the law such as section 8, section 21, section 11 and section 13, section 3 doesn’t require any action from a tenant or them to do anything but it is still just as important that the section is served.

What is a section 3 notice?

Section 3 of the Landlord and Tenant Act 1985 specifies that a landlord must serve written notice to the tenant when they become the new landlord, typically as a result of purchasing the property from the previous landlord.

This notice is intended to inform the tenant of the change in ownership and to provide the tenant with the new landlord’s contact information. It is important for tenants to be aware of the identity of their landlords in order to maintain clear communication and to ensure that their rights as tenants are protected. 

There could be important things that tenants have to be aware of like their eligibility for the building safety fund or not being able to inform their landlord that they aren’t available for a CP12 gas safety check that is due to the failure to issue a section 3. Effective communication is not just a nice thing to have but require by law.

What is the exact quote from section 3 of the landlord and tenant act 1985?

Under Uk legislation, the act states that there has to be a section 3 notice given if the “dwelling is assigned”. And the landlord has a duty to make sure the tenant knows of the “Assignment of the landlord’s interest”.

Simply put, this means the tenant must be kept up to date whenever a new owner of the property is assigned whether that be because of the sale of a property or the transfer of an asset from one person to the next.

Typically, this information will be given at the start of a tenancy but because the tenancy is ongoing, the tenant has to be updated as they would have no other way of knowing that their landlord has changed and the tenant has the right to be able to report issues with the property to the landlord or anyone working on behalf of them.

This also helps keep tenants familiar with landlords which will prevent them from treating the property badly and potential eviction and eviction court costs from occurring.

Sign representing section 3

What should be included in a section 3 notice?

A section 3 notice template can be downloaded on the government website here. It is not mandatory you use this exact template if you include all of the relevant information but it certainly makes things easier. The form should include:

  • A plan of the building/rooms that were acquired
  • Personal details and signature of the new landlord
  • Information about the landlord’s rights to retain the property
  • A statement of the terms of the leases 
  • Any supporting information about the tenancy
  • The purchase price of the property
  • If the landlord has entered a prescribed covenant

When is it necessary to serve a section 3 notice?

Section 3 must be served whenever there is a new landlord who takes ownership of a property. For example, if the landlord buys the property from the previous landlord with a tenant in situ, they would have to then issue to the sitting tenant of the property.

The notice should be served no later than the next day after the first rental payment from the tenant is due under the new owner of the property. Or within two months of the change of ownership of the property, whichever comes sooner.

For example, if a tenant pays rent every quarter, and the next rental payment is three months after the new acquisition of the property, instead of the landlord waiting for the rent in three months, the landlord would have to issue the section 3 notice within two months.

If a landlord fails to issue a section 3 when they become the new owner of a property, a tenant would have the right to issue the landlord with N215 which would bring the landlord to court.

Do you buy a property with a sitting tenant if you issue a section 3?

A sitting tenant is someone who is actively renting the property that their landlord has decided to sell to another landlord, their rent would then be paid to a different landlord as they take over ownership of the property.

Therefore, yes you do buy a property with a sitting tenant if you issue a section 3 as section 3’s have to be given when a new landlord is assigned.

Why does a landlord have to serve a section 3 notice?

Landlords must serve a section 3 notice to keep tenants up to date with what is going on in a property much as if there is a change in the ownership of the same property.

What happens if you don’t serve a section 3 notice?

It is in the landlord’s best interest to issue the notice in a written way anyway because they could face a fine from their local authority if they are found to not have issued a section 3 and a written notice is concrete evidence that they have complied with the law by mailing the section 3 physically to the property the tenant is living in.

Mail that contains a notice for section 3

Should a section 3 notice be served with a section 48 notice?

Section 48 of the Landlord and Tenant Act 1987 says a landlord must provide the tenant with a physical address that they can mail letters to and the tenants can be sure that it is received. This makes sure that the landlord is able to communicate with tenants if they do not want to use modern technology such as email or text.

So, this means if section 3 is not served when there is a new landlord then this new landlord is also in breach of section 48. As a result, these sections of the law work together.

Do you need to give a section 3 to a leaseholder?

If a tenant is a leaseholder, this means they have bought their property from the freeholder who still owns the land the property is built on. As a result, the leaseholder only buys the property for a set period of time and the price of the property goes down as the length of the leasehold goes down as it gets closer to the time when the freeholder will regain ownership of the property.

As a result, if a new freeholder takes over, every leaseholder will need to be issued with a section 3 in the same way as a tenant would be issued a section 3 if there was a new landlord.

In summary

In conclusion, under UK legislation about section 3, there are terms designed to provide a tenant with knowledge about who their landlord is and what their personal details are at all times.

The law of section 3 only applies to residential properties so commercial properties are excluded and there are no exemptions for this to occur. It is also not possible for a landlord to issue a section 3 verbally, it must be in a written agreement.

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andreas gerazis

Andreas Gerazis

Experienced landlord

Andreas is a certified landlord with extensive knowledge about the UK property market as he has been actively investing for half a decade. Founder of the first three-in-one property management software, Lofti Proptech, Andreas has a brilliant understanding of the details surrounding what it takes to grow and run a thriving property portfolio.