New Rules for Private Landlords
Published: 1 October 2015
New rules affecting every landlord of residential property are now in force. They affect the Assured Shorthold Tenancy (AST) which is the tenancy agreement used most frequently in the private rented sector. From 1 October 2015 new rules apply concerning the grant and termination of ASTs.
These rules apply to all ASTs granted on or after 1st October 2015 and stem from a further attempt by the Government at “deregulation.” However, if anything, the new rules make life more complicated for landlords.
Previously landlords could simply give the tenant two months’ notice to quit in a “section 21 notice” as long as the two months did not expire earlier than the end of the fixed term. It was common practice for landlords or their agents to serve a section 21 notice at the start of an AST as a precautionary measure.
- No section 21 notice may be served during the first four months.
- The section 21 notice must be in the prescribed form.
- The landlord must refund rent paid for any period after termination.
- Before the grant of an AST the landlord must give the tenant an Energy Performance Certificate, a copy of the current gas safety certificate and a copy of the governmental pamphlet “How to rent: the checklist for renting in England.”
- Special rules deal with the retaliatory evictions (see below).
- New legally enforceable regulations on the installation of smoke and carbon monoxide alarms are also live as from that date.
The Deregulation Act 2015 now provides some simplification over deposits. As long as any deposit is protected and the prescribed information served during the original fixed term, the landlord will be deemed to have complied with requirements in respect of subsequent fixed term or periodic tenancies, provided the landlord, tenant and premises are the same.
Only when an existing tenant is replaced by a new tenant will the landlord now need to re-protect the deposit and re-serve the prescribed information.
Landlords must still comply with the rules relating to prescribed information (if there is a deposit) within 30 days of receiving the deposit monies. Also, landlords can still be fined up to three times the value of the deposit if they fail to protect the deposit and serve the correct prescribed information. In addition, they would not be able to use the faster “accelerated possession” procedures unless they can prove that any deposit taken was protected.
New Legislation: Retaliatory Eviction
The practice of some rogue landlords who evict their tenants when they reasonably and persistently ask for expensive (or indeed essential) repair work to be done has now been tackled, although a private members bill on this subject failed last year. The Deregulation Act 2015 (section 33) has met the issue head-on.
With tenancies commenced as from 01 October, if the tenant makes a complaint, a landlord must give an 'adequate response' within 14 days. An 'adequate response' is deemed to be the landlord stating (preferably in writing) what he is going to do to resolve the problem and the time limit proposed for dealing with it.
If such an 'adequate response' is not forthcoming or the repairs are not done, the tenant can complain to the local authority which will then serve a notice on the landlord meaning a Section 21 notice cannot be served for six months. It is only the service of the local authority notice which triggers that six month prohibition. The local authority notice served on the landlord will be based on any one of the following sections in the Housing Act 2004:
- section 11 - improvement notices relating to category 1 hazards
- section 12 - improvement notices relating to category 2 hazards
- section 40(7) - emergency remedial action.
Energy Performance Certificates (EPC)
In tenancies commencing as from 01 October (including renewals) the landlord or agent must now comply with section 6(5) of the Energy Performance of Buildings (England and Wales) Regulations 2012 by ensuring that a valid energy performance certificate is included free of charge in the prescribed information given to the tenant.
Many landlords of houses in multiple occupation (HMO) do not serve an EPC on the basis that the regulations refer to a 'building' - an HMO room is not a 'building'. However you do need to have an EPC for the building as a whole so copies of this EPC (for the whole building) will need to be given to each tenant.
Gas Safety Certificates
Amended rules that apply to tenancies commenced on or after 01 October 2015 (including renewals) require compliance with regulation 36 of the Gas Safety (Installation and Use) Regulations 1998. This means a landlord or agent must carry out an inspection of gas equipment and a gas safety certificate must be made available to the tenant within 28 days of the commencement of the tenancy.
The gas regulations do not allow the landlord to enter to do the inspection work without the tenant's permission. So, for the purposes of compliance with new Section 21 regulations, if the landlord cannot gain permission for access to perform the inspection it should be sufficient to give the tenant a gas safety certificate which was produced before the tenancy started, provided it is still valid.
Contents of the Prescribed Information
A landlord, or a person acting on behalf of a landlord, is still required to give the tenant quite a lot of information about the tenancy deposit. Precisely what this information should include was set out in the Housing (Tenancy Deposits) Prescribed Information Order 2007.
Such prescribed information must be given by the agent or landlord to the tenant in the correct form within 30 days of receiving the deposit. The tenant must be given an opportunity to check and sign the Prescribed Information and the landlord or agent must be able to prove they have served it and the tenant has seen it.
For tenancies commencing on or after 01 October 2015, that Prescribed Information must now also include a copy of a document called 'How to rent: the checklist for renting in England' as published by the Department for Communities and Local Government. It must be presented in hard copy – i.e. it is not enough to send a link or email a PDF unless you have your tenant's agreement that notices and documents may be served by email.
Unless you can show that this 'How to rent' leaflet was included in the Prescribed information served to any tenant whose tenancy began on or after 01 October 2015 any Section 21 notice subsequently served will be invalid. A copy of the leaflet can be downloaded here.
New Section 21 Form
There have been problems in using Section 21 notices in the past because there was no set form to be used, meaning people frequently got them wrong because they missed out vital information or mis-stated it. That's now been rectified and like Section 8 notices, there is now a prescribed form for Section 21 notices.
There was concern about errors in the first 'officially published' version of the prescribed Section 21 notice. As a result amendments have been rushed through for a new Section 21 form in order to correct an error identified in paragraph three of the original.
The correction makes it clear that where landlords wish to use section 21 of the Housing Act 1988 to seek possession against tenants occupying properties under periodic tenancies where more than two months' notice is required, the form is valid for four months from the date after which possession could be required and not four months from the date of issue of the form as was stated in the original.
Carbon Monoxide and Smoke Alarms
In parallel with these rule changes landlords are also now required to install working smoke and carbon monoxide (CO1) alarms in their properties as from 01 October 2015. This legally enforceable requirement applies both to existing tenancies and new AST agreements entered into on or after that date.
At least one smoke alarm must be installed on each floor of a property and a carbon monoxide alarm must be located in any room containing a solid fuel burning appliance or any other identified 'high risk' locations.
Initial installation and testing will be the landlord's responsibility. There appears to be no stipulation about the kind of alarm – mains wired or battery operated – that should be fitted so long as it works effectively. Thereafter, testing the alarms regularly during the tenancy would be the tenant's responsibility.
Although the legislation refers only to 'solid fuel burning appliances', landlords are encouraged to fit working carbon monoxide alarms in rooms with gas or any other appliance that could emit fumes.
Control of Legionella
Finally landlords should also remember that they continue to have responsibilities for the control of legionella bacteria in water including hot water and cold water systems, under The Health & Safety at Work Act 1974 and the Control of Substances Hazardous to Heath 1999.
The above is a summary of the new law and regulations and is intended as a general guideline only. For more specific advice please contact Maria Guida, a partner in our Property Team.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.