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Updates from our Legal & Claims department

Posted on 2018-11-30

Here, we bring you the latest news and updates which might affect you and your business. 

HOUSES OF MULTIPLE OCCUPANCY (LICENCING CHANGES AS OF 01 OCTOBER 2018)

The new HMO rules are covered by “The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018” which came into effect across England on 1 October 2018.

The main thing the Order changes is the definition of an HMO under the Housing Act 2004. The new definition of an HMO will be any property occupied by five or more people, forming two or more separate households. This is in contrast to the previous HMO definition and sees the removal of the need for the property to be comprised of three or more storeys.

ENERGY EFFICIENCY RATINGS AND PERFORMANCE CERTIFICATES

As of 1 April 2018, new tenancies AND renewals of existing tenancies can ONLY be for properties which have a minimum energy efficiency rating of E. So if your property has a rating of F or G - you will be letting the property illegally. As of 1 April 2020, this will apply also to all existing tenancies. Whether they are during the fixed term or a periodic tenancy which means that Landlord must ensure compliance for all rented accommodation by taking steps to increase the efficiency ratings.

DE-REGULATION ACT

It came into force in part on the 01 October 2015 and brought with it a number of changes to legislation which created new requirements and caused uncertainties for Landlords and Letting

Agents in respect of Section 21 (“S21”) notices. The Deregulation Act thereby introduced a number of defences to an action for possession under S21 of the housing Act 1988, such as retaliatory evictions or breaches of prescribed requirements. Whilst the provision of Gas Safety Certificates and Energy Performance Certificates (“EPC”) to Tenants have been a requirement of Landlords long before the Deregulation Act commenced, non-compliance did not previously stop a landlord from serving and relying on a valid S21 notice.

That changed from the 01 October 2015 in respect of all ASTs entered into after that date. The Act thus prevented Landlords from serving a valid S21 notice where they had not complied with prescribed legal requirements set by the Deregulation Act or where the local authority had served an improvement notice for example. That change only applied to new tenancies, or renewal tenancies entered into after a period of being periodic, granted on or after the 01 October 2015. Another of the prescribed requirements, is the provision of the “How to rent: the checklist for renting in England” (“H2R”) to Tenants. Whilst it sounds simple, there have been numerous updates to the H2R document and Landlords must ensure that they give the most up to date version of the document at the granting of any renewal, extension, or new tenancy where the checklist has been updated.

The act had a 3 year grace period for tenancies that were in place prior to the commencement of the Act. That grace period came to an end on 01 October 2018. From that point, the requirements of the Act are applicable to all tenancies regardless of when they started. You will also be required to use the prescribed form 6A for providing notice under S21 Housing Act 1988 (as amended) in all cases and you will no longer be able to rely on any older style notices.

Caridon Propert y Ltd v Monty Shooltz

This case commenced as a county court case for possession. On appeal, HHJ Luba QC (the judge) gave judgment on the basis that a Landlord may not serve a valid S21 notice, or rely on the same in possession proceedings unless they have served a valid gas safety certificate on the tenants before the tenancy commenced, or the Tenants took occupation. Given that the Deregulation Act applied to all tenancies as of 01 October 2018, it appears that this judgment will now apply to all tenancies and where a Gas Safety Certificate has not been served prior to the Tenant taking occupation, the Landlord may be prevented from relying on a S21 notice to recover possession.

At present, under this judgment, there is no remedy to this breach unless there is an appeal to a higher court which rules differently, or parliament intervenes and makes amending legislation.

So what should you do to ensure compliance?

As a general guide, you should:

  • Provide a copy of the most recent Gas Safety Certificate prior to the Tenants occupation of the property and the granting of the tenancy.
  • Within 28 days of each annual gas safety check being completed, provide the tenant with the updated certificate.
  • Provide a valid EPC to the Tenant prior to them occupying the property and you granting them a tenancy.
  • Provide the most up to date version of the H2R document to the Tenant at the point you grant the Tenancy.
  • Remember that a S21 Notice, using form 6A cannot be served in the first 4 months of a tenancy and is able to be relied upon for a limited period of 6 months from the date of the notice.

Where you have not complied with the above, or are in any doubt over the requirements, you should seek legal advice as to the remedies available to you, if any.

Top tips to avoid disputes later on:

  • Always go to the Governments website for the latest version of the H2R document to avoid providing the Tenant with an out of date version. Avoid using pre-printed stocks. 
  • On giving the Tenant the necessary documents, get them to sign a document that says what they have been given and the exact versions. This will help prevent the Tenant(s) later saying they didn’t get a copy and may prove to be the difference between a successful or unsuccessful claim in Court.

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