Helen Thomas, from our property litigation team, considers the year ahead in private residential tenancies.
S21
In housing circles, the most anxiously awaited legislation is the proposed removal of the S21 “no-fault” notice. The simplified system of obtaining possession has been the mainstay of many landlords’ business model, not necessarily because there is a wish to evict tenants for no reason but due to the complexities of the court system if a fault ground such as rent arrears or anti-social behaviour is used.
The full text of the December 2019 Queen’s speech (page 46) confirmed this Government has followed the May Government in intending to remove S21 notices. It forms part of a Renters’ Reform Bill which describes its purpose as introducing reforms to deliver a fairer and more effective rental market. The Bill also promises to give landlords more rights to recover possession where there is a legitimate need and reforming the court system to make the process quicker and easier. It is possible the reforms will be along the lines of those which featured in the consultation document.
As is invariably the case we must await the detail of the proposals to be able to assess the impact any change is likely to have on landlords and tenants and what steps may be taken in advance to prepare for implementation.
Implementation of earlier legislation
2020 sees some existing legislation apply to older tenancies.
The Homes (Fitness for Human Habitation) Act applies to existing tenancies from 20 March 2020. This imposes a minimum standard on all let dwellings. Landlords should particularly note that it will not be a defence under the Act that a lower rent has been charged due to the condition of the property.
Minimum energy efficiency standards were introduced for new tenancies in April 2018. As of 1 April 2020, they will apply to tenancies that pre-date 1 April 2018 unless the property qualifies for an exemption. If a landlord is letting a property which is not rated at least “E”, or are not sure of the rating, then the regulations should be carefully checked.
The Tenant Fees Act will apply to all assured shorthold tenancies, whenever entered into, from 1 June 2020. This means that any clauses in existing (pre 1 June 2019) agreements that charged fees to tenants will not be enforceable unless it falls into one of the exceptions. One area for landlords to be particularly aware of is that of “check out fees”.
Since 1 October 2018 HMOs (Houses in Multiple Occupation) have been required to have minimum room sizes, this is enforced by way of a licence condition. Any landlord seeking a renewal of a licence during 2020 will need to ensure the minimum size requirement is complied with, this may impact upon the number of rooms that can be let.
We have been waiting for a decision on the implementation of regulations concerning electrical safety. There is still no date for this but S122 of the Housing and Planning Act 2016 is (as of 25 October 2019) in force, so we are one step nearer the introduction of regulations.
Matters currently before the courts.
The impact of the provision of gas safety certificates, and in the author’s view EPCs, on a landlord’s ability to serve an S21 notice has been an issue since the implementation of the Deregulation Act. With perhaps a degree of irony, the Court of Appeal will consider this point towards the end of January. Their decision is likely to have some impact for landlords despite the Renters’ Reform Bill unless the removal of S21 is applied to existing tenancies. We will report on the outcome of this case when the judgement is available.
In March 2019 the High Court declared that the Right to Rent scheme was incompatible with the European Convention of Human rights. The scheme has continued to operate since with the Government’s appeal against the ruling due to be heard in January 2020.