News

• Feb 11

  Fitness for Human Habitation

  The Homes (Fitness for Human Habitation) Act 2018 was passed on the 20 December 2018. It starts taking effect three months later from the 20 March 2019. Basically any new tenancy granted after this date, including renewals and statutory periodic tenancies arising, will have to comply with the legislation from the renewal. If the tenancy was running periodic from before 20 March 2019 then you will have to comply with the new rules from 12 months later, i.e. the 20 March 2020. If a fixed term tenancy is running before 20 March 2019 then as long as the fixed term tenancy continues it remains outside of the legislation, regardless of the fixed term (see the next point though). The rules for when this new rule applies very closely mirror the section 11 repairing obligations (and it is, of course, in the same legislation). therefore it does not apply to fixed terms of in excess of seven years, provided the landlord cannot break the fixed term before seven years. Also the landlord is not required to keep fit for human habitation any thing the tenant has damaged, fire, flood etc and things the tenant is entitled to remove from the property.
  
  As the TFP tenancy counts as a fixed term tenancy (based on Goodman v Evely [2001] EWCA Civ 104) this should mean that those on TFP tenancy agreements before 20 March 2019 will have for as long as those agreements last before having to comply.
  
  This will new law will require a landlord to let, and keep a property fit for human habitation (regardless of rent level). In addition to the old list in section 10 of issues that would make a property not fit for human habitation they have now added the 29 HHSRS hazards as reasons for not being fit for human habitation. It is this latter point that causes the most concern as there is no prescribed standard, e.g. it must not have any category one hazards. This means that a landlord will not have any certainty about committing an offence until the judge decides if it is fit or not.
  
  The rules remain unchanged in Wales, meaning effective the fitness for human habitation concept does not apply (due to the very old rent thresholds).
  We will be talking about this on our Legal Update 2019 course.

• Dec 03

  New Form 6A advice

  Law can be very complex and a superficial reading of it can be dangerous. For some months we have been working on the effect of the Deregulation Act 2015 when we get to October 2018. Section 41, dealing with the transitional provisions, states that section 33-38 and 40 come into force for pre-October 2015 tenancies from 1 October 2018. This is what we are all expecting.
  
  However, it is not as simple as this. Section 33 and 34 deal with retaliatory evictions, and these will come into force on the 1 October 2018 for tenancies created before 1 October 2015.
  
  Section 35 deals with the periodic notice not needing to expire at the end of a period of the tenancy. This will come into force for all assured shortholds from 1 October 2018. Section 36 deals with not serving in the first four months and though technically it will apply, it will have no practical effect.
  
  Section 40 deals with the requirement for a pro rata rent refund if the section 21 notice expires part way through a period for which rent has been paid. This will apply to pre-October 2015 tenancies from 1 October 2018.
  
  Section 41, the transitional provisions, specifically exclude section 39 from ever applying to the pre-October 2015 tenancies and as this is the requirement to give the How to Rent Guide, this makes sense.
  
  The tricky bit is sections 37 and 38 as both of these are "prescribed" items. 37 is the prescribed form, Form 6A, and 38 is the prescribed legal requirements (currently gas and EPC). The important thing with these is that the regulations that prescribe these two things start by saying the regulations only apply to post October 2015 tenancies, therefore excluding all the pre-October 2015 tenancies. We have been in dialogue with MHCLG about this for some months, even suggesting how to edit the Form 6A (which specifically says it doe snot apply to pre-October 2015 tenancies), and how they might edit the regulations. With Parliament in recess and little legislation being passed in September when the party conference season is on, time was running out to resolve this. We have now been told that there is no intention that the Form 6A and gas/EPC requirements will apply to pre-October 2015 tenancies come October 2018. This is something of a change in understanding and will bring its own confusion. Much as many agents are expecting the changes to apply to pre-October 2015 tenancies from October 2018, so are many solicitors and probably judges too. It will be important for agents to be able to explain why they do not apply (because the regulations say they don't apply) if it is questions in court or by the local authority.
  
  
   

• Nov 05

  Domestic Energy Efficiency

  From 19 December 2017 to 13 March 2018 a consultation was run to amend the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 was run. It received 198 responses. The Government have now release the responses to the consultation and given in indication of their thinking of how they will make changes.
  
  The consultation proposed a range of amounts of money a landlord would have to fund to get a property out of band F or G. The maximum figure they discussed was £5,000, though they were talking about £2,500. Following the consultation the amount they are suggesting seems to have been increased to £3,500 per property. There are currently around 280,000 properties in bands F or G. If each property spent £3,500 (and they won't all need this much spent on them) it would total just shy of a billion pounds of spending.
  
  Where landlords can obtain funding from things like Green Deal, they will not have to contribute their own money unless the external funding is not enough to get out of band F or G. Then the landlord would only have to spend the amount of the shortfall.
  
  84% of respondents agreed that  some sort of funding by landlords should be introduced. This probably gives a good indication of the strength of feeling on the issue.
  
  This information indicates that this policy is very likely to come into force and it is only a question of when. As it only needs regulations it will not take long but first the Government will produce their full response to the consultation (giving the details) and then the regulations have to be drafted and passed. The originally planned date for this was April 2019 and this may still be possible.
  
  
  
  

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