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Renters Reform Bill – No-fault evictions to be banned in reform of rental sector

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Being described as a once in a generation reform The Renters Reform Bill was introduced in Parliament on 17th May 2023. This sets out new proposals to radically change the way tenants rent properties from landlords.

One of the most talked about change is the proposal to abolish Section 21 No Fault Evictions and deliver a simple more secure tenancy structure.

The proposal is that all tenancies are to become periodic tenancies from the start and abolish fixed term tenancies. They will require the tenant to give two months’ notice to vacate the property rather than the current one months but the idea of being on a periodic tenancy is that the tenant will not be liable for large sums of rent should they decide to leave the property. By abolishing Section 21 evictions this will give tenants more rights in remaining in the property and more control.

Another change is to ensure that the property is suitable for a tenant to live in. Currently rented properties meeting a minimum EPC standard of E is require if the property is under E then the property cannot be rented. The proposals changes the minimum EPC rating to C by 2035.

Another change to help balance up the Section 21 Abolishment is to reform the Grounds for Possession under Section 8. One of the proposals for rent arrears is to introduce a new mandatory ground for repeated serious arrears. Eviction will be mandatory where a tenant has been in at least two months rental arrears three times within the previous three years regardless of any rent arrears balance at the possession hearing. This will stop tenants from paying off a small amount of arrears to take them or keep them below the mandatory repossession threshold or suddenly paying the arrears prior to the Court hearing.

Other changes are:

  • For anti social behavior or criminal behavior the proposal will lower the notice period for the existing mandatory eviction grounds and there will be further assistance provided in order to resolve issues at an early stage.
  • Make it illegal for landlords and agents to have blanket bans on renting to tenants in receipt of benefits or with children ensuring no family is unjustly discriminated against when looking for a place to live.
  • Tenants would be given the legal right to request to keep a pet in their home, which the landlord cannot unreasonably refused.

National Conveyancing Week 2023 and Changes to EPC Rules For Landlords.

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It is National Conveyancing Week on 20th March to 25th March 2023.

The Adams Harrison conveyancing team work hard to provide the best service not only to residential homebuyers but also for landlords purchasing buy-to-let properties.

This article below informs you of new changes coming into force on 1st April 2023 regarding Energy Performance Certificates.

It is essential that landlords comply but it is also useful for new and existing tenants to be aware of their landlords’ responsibilities.

If you have any questions about this article, or would like a quotation for the sale or purchase of a property please use our contact form.

Or call any of our offices to speak to a member of the Conveyancing team.

We also have experts in Commercial Property work so please do contact us for more information.

Incoming changes to Energy Performance Certificates on 1 April 2023 and its effects on landlords and tenants

Old Rules

An Energy Performance Certificate (EPC) is a certificate that measures a property’s energy efficiency and CO2 emissions. The latest Minimum Energy Efficiency Standards apply to all existing tenancies. Since 1st April 2018 (for new lets and renewal tenancies) and 1st April 2020 (for all existing tenancies), the rules required an EPC rating to be E or higher meaning a tenancy could not be granted to new or existing tenants if the property has an EPC rating of F or G, unless the property is exempt, after these dates.

New Rules

All landlords and tenants must be aware of the incoming changes to the EPC requirements as there are criminal offences for breaching the new rules. From 1 April 2023, it will be an offence to continue to let or rent out a property if it does not have a rating of at least E, unless a valid exemption applies. The penalty is based on the rateable value of the property and will be between £10,000 – £150,000 per breach. Details of the breach may also be made publicly available.

From 2025, all newly rented properties will be required to have an EPC rating of C or above. Currently properties only require an EPC rating of ‘E’ or above. Existing tenancies will have until 2028 to comply with the new rule changes.

What does this mean for landlords?

1 in 7 (15%) landlords surveyed have no knowledge of the upcoming changes to the Energy Performance Certificate (EPC) rules, according to new research from Shawbrook Bank. Landlords currently unaware of the level of work needed on their property could lose rental income until all necessary work is carried out. Landlords will need to prepare for these costs to bring their properties up to the required rating.

What does this mean for tenants?

As a tenant, you are entitled to a copy of your home’s EPC and must be provided with one when you move in. If your landlord undertakes an EPC assessment for your property, they must give you at least 24 hours written notice of a visit from an assessor.

If you want to find your property’s EPC rating, simply go to the Government’s Energy Performance of Buildings Register, type in your postcode and click on your address.

What can a landlord do where a former tenant’s belongings are left at the premises?

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It is question that I am often asked and can cause landlords more difficulties and time having already, on some occasions, gone through the difficult procedure in getting a tenant to leave their premises in the first place.

Landlords are often faced with the issue of how to deal with belongings left behind by their former tenants at the end of their tenancies. The risk to the landlord of disposing of items of obvious rubbish may be small, especially where a tenant has vacated voluntarily at the end of the term or surrender their tenancy. There may, however, be a greater risk in either of the following situations:

  • Where larger or more valuable items are left behind.
  • Where the landlord has forfeited a lease or enforced a possession order.

A tenant is generally obliged to remove their goods from the premises at the end of the term. A lease or tenancy agreement will often expressly oblige the tenant to remove any goods at the end of the term. Some leases will also clarify what the landlord can do with any goods that may be left on the premises at the end of the term.

If goods are left on the premises once the lease has come to an end, however it ends, the items remain the former tenant’s property. The exception to this is where the former tenant has abandoned his/her belongings. In the absence of express terms in a lease, the landlord is left with the problem of deciding what to do with these.

If the tenant has moved out and abandoned the goods, the landlord will usually be free to deal with those goods as it sees fit. If the former tenant has not abandoned the goods, however, the retention and sale or disposal of the goods by the landlord may give the tenant grounds for bringing a claim against the landlord.

A useful tool for the landlord to use is to serve a notice under the Torts (Interference with Goods) Act 1977 (“TIGA”). This imposes an obligation to collect the goods on the owner by giving notice and gives the person in possession the right to sell the goods if they are not collected.

The content of a notice would include that the goods are ready to collect, address as to where the goods are held and what amount if any are due to the landlord for storing the goods. If the tenant fails to respond or refuses to collect the goods then the Landlord can give a further notice of their intention to sell the goods under section 12(3) of the TIGA 1977. This notice would set out similar details as the first notice and include the date on or after which the landlord intends to sell the goods.

With both notices the landlord must give a reasonable opportunity to collect the goods. What is reasonable will depend on the circumstances of each case.

For more information and advice on this and how this may affect you please contact Anton Bilinski who is able to guide you through this and act for you when a landlord or tenant dispute arises.

Anton Bilinski
Chartered Legal Executive
Litigation Department

Tenant Fees Act 2019

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The Tenant Fees Act 2019 came into force on 1st June 2019.

Its provisions apply with immediate effect to all tenancies created on or after the 1st June 2019 (assured and assured shorthold tenancies including student lettings) and will apply to all other existing assured and assured shorthold tenancies from the 1st June 2020. The prohibitions apply to arrangements with a tenant, the tenant’s guarantor and a person acting on behalf of the tenant

The Act permits a landlord only to charge the tenant for the following under the terms of an assured/assured shorthold tenancy:

  • Rent;
  • A tenancy deposit which is capped to 5 weeks’ rent if the annual rent is £50,000 per annum or less and up to 6 weeks’ rent of the annual rent exceeds £50,000.
  • Holding deposit (capped at 1 week’s rent) to reserve a property before the grant of a tenancy;
  • Event of a default. Payments for loss of keys or other security devices or failure to pay rent on time or other breach of the tenancy. For failure to pay on time, the sums recoverable are limited to interest on the late payment of rent and the rent has to have been outstanding for 14 days or more for the interest to become due;
  • Payment for the variation, assignment or novation of the tenancy (but this is capped at £50 or reasonable costs);
  • Payment on early termination of the tenancy (eg surrender fee);
  • Council tax (and other utilities);
  • TV licence;
  • Telecoms.

Landlords and letting agents cannot require tenants to make any payment that is not a permitted payment. Prohibited payments include:

  • Tenancy set up fees;
  • Viewing fees;
  • Credit check fees;
  • Inventory check fees;
  • Check out fees;
  • Fees for professional cleaning services.

Trading Standards is the enforcement authority for the prohibitions applying to landlords and letting agents and repayment obligations in relation to holding deposits. An enforcement authority can impose a financial penalty and require a landlord or letting agent to repay the tenant or relevant person any outstanding prohibited payment or holding deposit plus interest. The Act also makes provision for the tenant or relevant person to recover unlawfully charged fees from the First-tier Tribunal.

It is important to note that a section 21 notice cannot be given to recover possession of the property until the landlord has repaid any unlawfully charged fees or unlawfully retained holding deposit.

If you are unsure or require further advice on these changes and how they can affect you please contact Anton Bilinski who is able to guide you through these changes and act for you when a landlord or tenant dispute arises.

Anton Bilinski
Legal Executive
Litigation Department

Lease Renewals and Other Business Renewals in the Current Market

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With most commercial leases containing upwards only rent review clauses, the renewal of the lease is often the only opportunity available to a tenant to reduce the rent.

Unlike rent review clauses which are almost inevitably drafted on up an “upwards only” basis, a tenant who has a right to claim a new lease at the end of its contractual term, has a right to claim that the lease on the same terms as the existing lease except as to rent, which is to be a market rent.

The current state of the commercial property market means that many tenants are securing renewals at significantly reduced rents. How much a reduction will depend on the date of the last review, the location of the property and of course the relative bargaining skills of the landlord’s and the tenant’s surveyors instructed on the review.

When approaching a lease renewal, landlords and tenants should seek the advice of both their solicitors and surveyors at the earliest opportunity.

The landlord should consider whether it is in his interest to trigger renewal procedures or to leave these in the hands of the tenant and similarly the tenant will need to consider whether it should trigger renewal procedures or just let the lease continue. This decision is often difficult for a landlord who may have to consider whether he wants the security of income offered by a long lease, even if renewal means he suffers a substantial reduction in income.

The tenant will need to consider whether it is in his interest to commit himself to the costly process of renewing his lease or, particularly if he only has short term requirement to allow the lease to continue, albeit at an inflated rent.

When considering these issues, a tenant can be comforted by knowing that he is not committed to taking a new lease by either the landlord instigating or the tenant instigating the renewal procedures. On the other hand a landlord needs to be aware that if the tenant, who has a right to a new lease under the Landlord and Tenant Act 1954, requires such a new lease, then as long as that tenant meets all the statutory time limits he will obtain a new lease unless the landlord can prove one of the statute grounds of opposition.
If the landlord wishes to recover possession of premises and oppose the tenant’s claim to a new lease, the landlord should seek the early advice of his solicitor about the available grounds of opposition, and have the basis of his case prepared, before he triggers the renewal procedures.

At Adams Harrison we have had a considerable experience in advising both landlords and tenants on business lease renewals, both on a contested and an un-contested basis and if you require advice or guidance you should contact Rhodri Rees at Haverhill on r.rees@adams-harrison.co.uk or Richard Booth at Saffron Walden on r.booth@adams-harrison.co.uk

 

Noise Nuisance

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A recent High Court decision in the case of Fouladi v Darout Limited {2018] EWHC 3501 has confirmed the previous legal position that a landlord (freeholder) is not liable for nuisance caused by its tenant merely because the landlord did not take steps available to him to prevent what was causing the nuisance, even when the landlord knows that its tenant is causing a nuisance.

The court held though that the Claimant had suffered noise nuisance in her flat (flat 62) from the occupiers of flat 66 above her flat and she was therefore successful with her claim against the tenants of flat 66.

There are certain circumstances in which a landlord can be liable for noise nuisance caused by its tenants. Most leases have a covenant for quiet enjoyment and this can be relied upon in some noise nuisance cases. If the landlord participates and/or authorizes the nuisance then he will be liable.

In the recent case referred to above the landlord had failed to address the fact that the occupiers of the flat above the Claimant were carrying out work that they should have obtained consent from the landlord to undertake. Even though the landlord knew the works were being carried out (without consent) he was not liable for the noise nuisance.

Noise nuisance claims are just one area of property litigation that this firm can advise, assist and represent you in relation to.

Landlord and Tenant Update; Assured Shorthold Tenancies

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Following on from my previous article Changes to Section 21 Notice which was implemented by the Deregulation Act.  These changes first came into effect on 1st October 2015 but only for tenancies which started or were renewed for new fixed terms after that date.  Therefore we have been in a transition period for tenancies which pre-dated 1st October 2015.  This transition period came to an end on 1st October 2018 and from that date the changes made by the Act will apply to all Assured Shorthold Tenancies (ASTs). However, not all the changes will apply especially to tenancies which pre-dated 1st October 2015.

Section 39 which requires the Landlord to serve the how to rent checklist at the start of the tenancy does not apply to tenancies pre 1st October 2015  according to Section 41. One area that requires clarification is whether pre 1st October 2015 tenancies require the landlord to serve the the tenant with the prescribed requirements of a Energy Performance Certificate and Gas Safety Certificate.  This is the provision that has caused landlords the most difficulty since the Deregulation Act came into force.  The Deregulation Act states that this provision will apply to any AST in existence at the time from 1st October 2018. However, the 2015 Regulations which specify the prescribed requirements expressly state that they only apply to ASTs granted on or after 1st October 2015 and not to statutory periodic tenancies that came into being on or after 1st October 2015 at the end of an AST granted before that date. It therefore seems that until new regulations are passed to clarify this position, there are no prescribed requirements in existence applicable to old tenancies.

However In a recent appeal from a county court decision, in the case of Caridon Property Ltd v Monty Shooltz, it has been held that the previous gas safety record of a property will need to be served on a new tenant before they commence the tenancy, otherwise any subsequent section 21 notice served against them will be invalid. It remains to be seen whether this case will be appealed further but the decision is likely to have significant ramification on landlords until this matter is decided further or changes are made to the current legislation.

Although changes have been made to assist Landlords in making the section 21 procedure more straightforward, as can be seen it still remains a difficult area to get right in serving a valid section 21 notice.  If you are unsure or require further advice on these changes and how they can affect you please contact Anton Bilinski who is able to guide you through these changes and act for you when a landlord or tenant dispute arises.

Changes To Section 21 Notices Coming 1 October 2018

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On 1 October 2015, big changes were made to section 21 of the Housing Act 1988 for tenancies in England.

These changes were brought in by the Deregulation Act 2015 for tenancies that came into effect or were renewed on or after the 1st October 2015. The notable provisions were as follows:

  • The introduction of a new section 21 Notice (form 6A).
  • Compliance with the Tenancy Deposit Scheme (“TDS”).
  • The Requirement to have given the tenant a gas safety certificate before the tenancy commences.
  • The requirement to have given the tenant an EPC before the tenancy commences.
  • The requirement to have given the tenant the ‘How to Rent Checklist’ before the tenancy commences.
  • Limiting the time to enforce a section 21 notice to six months after the date of service.
  • The removal of the requirement to expire a section 21 notice under a periodic assured shorthold tenancy ‘after the end of a period of the tenancy’.

From 1 October 2018 these rules will apply to ALL tenancies. This includes tenancies granted before October 2015.

The only exception is the requirement to provide the How to Rent Guide (because this did not exist before October 2015).

These requirements make it more onerous for landlord to evict tenants and make the service of a section 21 notice even more important than ever before.

If you require further advice on these changes and how they can effect you please contact Anton Bilinski who is able to guide you through these changes and act for you when a landlord or tenant dispute arises.