Right to Rent
Posted: January 15, 2016 Filed under: Bury & Walkers, Landlords, Letting Agents, Managing Agents, Property Law, Residential Property | Tags: assured shorthold tenancy, government changes, Immigration, residential landlords Leave a commentFrom 1st February 2016 all landlords who let a property in England will be required to carry out a check on the status of their prospective tenants, and other authorised occupiers, to ascertain whether they have the right to rent property in the UK.
As the checks can be carried out 28 days before the start of the tenancy, those checks can be carried out now.
Landlords don’t have to check the rights to rent of existing occupiers who moved in before the 1st February 2016 or where the agreement is renewed between the same parties for the same property.
A letting agent can be appointed by the landlord to carry out the right to rent checks. If an agent is responsible, they will be the one that is potentially liable to a penalty. If a landlord or agent fails to undertake the required checks and lets a property to someone who has no right to stay in the UK, they could face a financial penalty of £1,000 for the first offence and £3,000 thereafter. This penalty is per tenant and so could, therefore, be substantial if there are several occupiers in a property.
I recently saw someone that was offering a five hour training course to landlords on this matter. Both landlords and agents need to be fully aware of all of the issues and training will need to be undertaken. Landlords and agents need to know their responsibilities regarding who they should be checking, what I.D. they should be viewing, how the I.D. will be securely kept and what enquiries they should be making to the tenants. They will also need to consider issues relating to discrimination.
As it stands, if the requirements are breached then the penalty is a civil one. However, the Immigration Bill 2015-16 is currently going through Parliament and will provide a new criminal offence targeted at landlords and agents who repeatedly fail to conduct the right to rent checks. The criminal sanction will be a maximum penalty of five years imprisonment and/or an unlimited fine.
Landlords and agents also need to be aware that amendments will be made to the prescribed requirements for identity checks and, therefore, need to be aware of potential alterations in the list of documentation that they should obtain when carrying out the checks.
New prescribed Section 21 Notice
Posted: September 11, 2015 Filed under: Houses in Multiple Occupation, Landlords, Letting Agents, Possession | Tags: assured shorthold tenancy, Deregulation Act, energy performance certificates, eviction, gas safety certificates, prescribed information, Section 21 Notice 2 CommentsI have previously summarised the new rules under the Deregulation Act 2015 which apply to Assured Shorthold Tenancies.
A new prescribed Section 21 notice has now been issued under The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015. These will come into force on the 1st October 2015.
The new Section 21 notice applies to assured shorthold tenancies granted on or after 1st October 2015. The new rules will not apply to a fixed term assured shorthold tenancy granted before 1st October 2015 even if the tenancy continues as a statutory periodic tenancy after that date (although this will change from 1st October 2018).
The new Section 21 notice cannot be used where:-
• The tenant has resided in the property for less than four months.
• The landlord is prevented from retaliatory eviction under Section 33 of the Deregulation Act 2015.
• The landlord has not complied with the requirements below.
• The landlord has not protected the deposit.
• The property requires a licence but one has not been obtained.
Whilst, undoubtedly, the Section 21 notice is now easier to complete, the new requirements that apply have scope for tripping up landlords and agents. Currently, it is common that landlords and/or agents incorrectly complete a Section 21 notice where, for example, a statutory periodic tenancy is running. The need to identify correct dates on which the notice expires caused landlords and agents problems. Whilst that requirement is now to be dispensed with under the new regulations, there are three new requirements that must be met before a landlord can serve a Section 21 Notice. These are:-
• The tenant must be provided with an Energy Performance Certificate.
• The tenant must be provided with a copy of a Gas Safety Certificate.
• The tenant must be provided with a copy of the booklet entitled “DCLG: How to rent: The checklist for renting in England”.
A Section 21 Notice cannot be served by a landlord at any time when the above requirements have not been complied with. I anticipate that a large number of landlords will not meet the requirements and expensive delays in obtaining possession of their property will follow.
The Deregulation Act explained for landlords – Part 2 – Tenancy Deposits
Posted: April 2, 2015 Filed under: Landlords, Letting Agents, Managing Agents, Possession, Property Law, Residential Property, Tenancy Agreements, Tenancy Deposits, Tenants | Tags: assured shorthold tenancy, deposit penalty, Deposit protection, Deregulation Bill, government changes, periodic tenancy, residential landlords, Superstrike, tenancy deposit claims Leave a commentSections 30 – 32 of the Deregulation Act 2015 aim to rectify flaws in tenancy deposit protection legislation contained within the Housing Act 2004. Several cases, including Superstrike, have caused difficulty for landlords regarding non-compliance. The new provisions set out the position in cases where the deposit was received either before or after 6 April 2007 (the date when the deposit protection legislation was originally introduced).
Firstly, where a deposit was received before 6 April 2007 in connection with a fixed term which rolled over into a statutory periodic tenancy on or after that date and the deposit is still held by a landlord in connection with the periodic tenancy, the landlord has now until 23 June 2015 to ensure that the deposit is protected and the prescribed information served. If a landlord takes these steps (subject to any court proceedings as below), they will not be liable for a penalty claimed by the tenant.
It is worth noting that the date of 23 June 2015 may be brought forward if matters are before the Court for determination of an application for a penalty before 23 June 2015. In that case, the landlord should comply before the date of the Court hearing.
In cases where a deposit was taken by a landlord on or after 6 April 2007 which was placed in a deposit scheme and the prescribed information served, if that tenancy subsequently became or becomes a statutory periodic tenancy then the landlord’s original compliance in protecting the deposit and serving the prescribed information will suffice for the purposes of the statutory periodic tenancy. Therefore, if the landlord originally registered the deposit during the fixed term and complied with the prescribed information requirements, there is no need to re-protect or re-serve.
However, the amendments do not offer protection to landlords who did not originally protect the deposit.
Further, the new legislation confirms that where a tenancy became periodic before 6 April 2007 and an unprotected deposit continues to be held, whilst there is no financial penalty payable, the deposit should be protected if the landlord wishes to serve a Section 21 notice.
The above provisions are in force now and have retrospective effect back to 6 April 2007. There are some transitional provisions within the Act which would need to be considered on a case by case basis as they affect matters subject to Court proceedings and issues relating to costs. I am happy to consider any queries that landlords have in this respect.
The Act has also confirmed that it is acceptable to provide the details of the agent, on behalf of the landlord, who protected the deposit within the prescribed information rather than the landlord’s details.
Clarification has, at least, been provided to address issues that have arisen within cases over the last few years. Nonetheless, this is the third attempt in settling deposit legislation and we must wait and see how matters pan out.
The Deregulation Act explained for landlords – Part 1- Retaliatory Eviction
Posted: April 1, 2015 Filed under: Landlords, Letting Agents, Possession, Property Law, Residential Property, Tenants | Tags: assured shorthold tenancy, breach of tenancy, Deregulation Bill, Housing Act 2004, possession notice, Section 21 Notice Leave a commentThe Deregulation Bill received Royal Assent on 26 March 2015. In Part 1 of this article I will summarise the new provisions to offer protection for tenants against the practice (albeit perhaps not very common) of retaliatory eviction where landlords serve a possession notice in response to a complaint (usually repair) from a tenant.
Section 33 of the Act provides a three part test which, if met, restricts the landlord’s ability to serve a valid Section 21 notice. The landlord will not be able to serve a valid notice if:
- The tenant has made a written complaint to the landlord regarding the condition of the property before service of a Section 21 notice; and
- The landlord has not provided an adequate written response within 14 days of complaint; and
- The tenant has complained to the Local Authority which then serves an Improvement Notice or an Emergency Remedial Notice.
If the Local Authority has served a notice as above, the landlord is unable to serve a valid Section 21 notice for 6 months from the date of the Local Authority notice being served or suspended.
There are some exceptions which include where the Local Authority notice is revoked, the property is genuinely on the market for sale, mortgage repossessions and where the tenant has caused the disrepair. The latter, certainly, will open up a debate as to who is responsible for the disrepair and may cause delay to possession proceedings.
There are various knock on effects to possession proceedings which will need to be considered on a case by case basis but, essentially, it is going to be a question of who gets in first in terms of either a complaint from the tenant or a Section 21 notice being served by a landlord.
However, further provisions of the Act provide a restriction on the timing of service of a Section 21 Notice. Some landlords serve a Section 21 notice at the start of the tenancy as a matter of course. A landlord will not be able to serve a Section 21 notice within the first 4 months of a fixed term under the new provisions. As such, no Section 21 notice can end on the last day of a 6 month term but a new prescribed Section 21 notice is to be introduced which will avoid the need for a landlord to specify, within the notice, the last day of the period of the tenancy for when the tenancy comes to an end. This will simplify the possession notice process and cut down errors in drafting Section 21 notices for landlords.
The new provisions relating to retaliatory eviction come in to force on 1 October 2015. They will initially only apply to new fixed term tenancies entered into from that date. Eventually, the provisions will apply to all tenancies but this will not be for another 3 years.
Landlords can expect additional provisions restricting their right to serve a Section 21 notice where they fail to comply with various obligations. Whilst these will be subject to further Regulations, it is anticipated that they will relate to health and safety issues, Energy Performance Certificates and Gas Safety Certificates.
Landlord TAP – Liability for Water Bills
Posted: March 6, 2015 Filed under: Landlords, Property Law, Residential Property, Tenants | Tags: assured shorthold tenancy, bills, Dee Valley Water areas, Dwr Cymru Welsh Water, landlords, problem tenants, residential landlords, tenanted properties, water, water companies Leave a commentAs from 1st January 2015 there is a legal obligation on landlords of properties located in the Dwr Cymru Welsh Water (DCWW) and Dee Valley Water areas to inform their water company of their tenant’s details. The requirement to provide details allows the Welsh Government to collate a database of tenanted properties. This will, it is hoped, make it easier for the water companies to locate tenants who fail to pay their bills and, thus, reduce the bad debt.
It is worth noting that a website is now available, the Landlord Tenant Address Portal (“Landlord TAP”) which provides a voluntary scheme to cover England and Wales for landlords to provide tenants’ contact details to water companies. Completion of forms on the website will provide the water companies with the details of those responsible (the tenants) for the payment of water and/or sewerage charges. It also allows landlords to notify the water companies as to when a property becomes empty or is sold.
(Not) Dealing with rogue landlords
Posted: February 25, 2015 Filed under: Landlords, Property Law | Tags: Beds in sheds, DCLG, Rogue landlords Leave a commentI wrote in October 2012 a post entitled “Dealing with Rogue Landlords” and the Government scheme to tackle “beds in sheds”.
In 2013 the Department of Communities and Local Government announced plans for an expanded cross-government team to help deal with problem landlords. However, I read at the weekend that a government minister, Brandon Lewis, has admitted that the new taskforce has not met once. Mr Lewis further admitted that the predecessor group had only met three times following establishment in 2012.
These revelations have led to the political parties firing shots at each other as to the Government’s commitment to tackling problems in the private rented sector with the Department of Communities and Local Government stating that there had been no need for further meetings as tasks had been originally set and were being met. Of course, all could change come May 2015 with a possible change of government.
Tenancy Deposits – Strike 2
Posted: August 18, 2014 Filed under: Landlords, Letting Agents, Managing Agents, Possession, Property Law, Residential Property, Tenancy Agreements, Tenancy Deposits, Tenants | Tags: Gardiner, McCusker, periodic tenancy, Superstrike Leave a commentA number of my previous articles have referred to the case of Superstrike Limited –v- Rodrigues. I would refer you to my article which provides a summary of the case and the guidance that has previously been offered by me as to how Superstrike effects all tenancy deposits.
Briefly, the Superstrike decision was unique on its own facts insofar as it related to an assured shorthold tenancy which was granted before 6th April 2007 (the date when the requirement to register a tenancy deposit and provide prescribed information came into force). Within Superstrike, it was held that where there was a subsequent statutory periodic tenancy that arose after the 6th April 2007, the landlord was required, within 30 days of the start of that periodic tenancy, to comply with the tenancy deposit regulations.
This established the “Superstrike principle”, as I call it. If that principle is extended and applied to all statutory periodic tenancies commencing after 6th April 2007, on the basis that a statutory periodic tenancy is a new tenancy, a landlord would need to ensure that the deposit is registered with a tenancy deposit scheme and the prescribed information served once a statutory periodic tenancy arises. The recent case of Gardiner –v- McCusker has confirmed this principle.
Briefly, the case involved a six month tenancy being entered into after the deposit legislation was in place. Whilst there were issues as to service of the prescribed information, for the purpose of this article, the important fact is that no prescribed information was served within 30 days of the statutory periodic tenancy arising. As such, the Court found that the subsequent Section 21 Notice served by the landlord was invalid and the landlord was ordered to pay a penalty to the tenancy to the tenants to the value of 2x the deposit.
From a lawyer’s point of view, the decision is not a surprise. Indeed, it was always likely to be a matter of time before the Court extended the Superstrike principle.
The case highlights the importance of ensuring that the deposit is re-registered (if the deposit scheme rules require) and a new set of prescribed information is served within 30 days of a statutory periodic tenancy arising.
Whilst a Bill is being processed through Parliament to amend the tenancy deposit legislation with a view to removing the requirement to re-register and address new prescribed information in these circumstances, this is still someway off becoming amended law (into next year at the earliest) and, indeed, there is no guarantee that it will see its way through all the stages to be passed as new law. In the meantime, all landlords should ensure that a diary management system is in place so that they do not allow for a 30 day period to pass from the start of a statutory periodic tenancy before taking action.
Illegal Immigration- Landlords Responsibilities
Posted: May 30, 2014 Filed under: Landlords, Letting Agents, Property Law | Tags: Immigration, Immigration Act Leave a commentI wrote in July 2013 on the Government consultation on tackling illegal immigration. My previous article outlined the intentions behind proposed new legislation whereby landlords will be responsible for undertaking checks on prospective tenants to see if they have permission to be residing in the UK.
The proposals have now become legislation and the Immigration Act 2004 received Royal Assent on the 14th May 2014.
It is anticipated that the Immigration Act will come into force in October 2014 with there to be a pilot scheme initially in one area before a national roll-out.
Under the Act, a landlord must not authorise an adult to occupy premises under a residential tenant agreement if the adult is disqualified as a result of their immigration status (Section 22 (1)). A person is disqualified if they are not a “relevant national” or do not have a “right to rent” i.e. that they require leave to enter or remain in the UK but did not have such permission. The details are set out in Section 21 of the Act where a “relevant national” means a British citizen, national of an EEA state or a national of Switzerland.
The Act makes provision for a code of practice to be issued and checking facilities are anticipated in order to assist landlords in making suitable enquiries. As previously outlined, if those enquiries are not made and acted upon, a landlord can be penalised and the Act makes provision for a penalty of up to £3,000.00.
We must wait and see what assistance will be given to landlords and for the outcome of the pilot scheme but more paperwork ensues I’m afraid.
SPENCER V TAYLOR: Christmas Cheer for Landlords Part 2 – The Hangover?
Posted: January 27, 2014 Filed under: Housing Act, Landlords, Letting Agents, Managing Agents, Possession, Property Law, Rent arrears, Residential Property, Tenancy Agreements, Tenancy Deposits, Tenants | Tags: assured shorthold tenancy, periodic tenancy, possession, possession notice, residential landlords, Section 21, Section 21 Notice, Section 21(1), Section 21(4), Section 8 Notice, Spencer, statutory periodic tenancy, Superstrike, Taylor, tenancy deposit claims Leave a comment
Further to my first article on this case (see here) I have now received a copy of the case report. In discussing the case report with my colleagues, we have concluded that this decision lends itself to a re-write of Section 21 Notices. I will set out below a brief explanation why this is the case together with further background of the case itself.
As you may already appreciate, there are two forms of Section 21 Notices. Prior to Spencer –v- Taylor, it was established practice that a Section 21(1) Notice could be served at any time during the fixed term tenancy. The Section 21(1) Notice did not have to expire on a particular date, provided at least two clear months notice was given and that the notice did not expire before the last day of the fixed term.
In contrast, a Section 21(4) Notice could be given (and still can be) in two situations. Firstly, where the fixed term tenancy has expired and there is a periodic tenancy continuing. Secondly, it can be given where the tenancy was periodic from the outset.
In both situations, the Section 21(4) Notice has to expire on a particular date as it must expire on the last day of a tenancy period so that possession is required after that specific day.
The decision
The decision of Spencer –v- Taylor alters the position and provides new situations in which a Section 21(1) Notice can be relied upon.
The case itself concerned a six month tenancy which expired and continued as a weekly statutory periodic tenancy. The landlord served the Notice and relied on Section 21 (4) in order to seek possession.
The weekly periodic tenancy ran from a Saturday to the following Sunday. In order to comply with Section 21 (4) therefore, the Notice should have expired on a Sunday ie. the last day of tenancy period. However, the Notice in this case ended on a Saturday and was, therefore, not the last day of the period of the tenancy.
The Notice itself provided:-
“(a) After 1 January 2012 or (b) the end of your period of tenancy which will end next after the expiration of two months from the service upon you of this notice”.
The 1st January 2012 was a Saturday, two months after service of the Notice (18th October 2011). As set out above, this is an ineffective date. However, the Notice provided for a saving provision (under (b)) as an alternative which led to a further date of 23rd December 2011.
The tenant argued that Section 21 (2) of the Housing Act prohibited the landlord from serving Notice under Section 21 (1) once the fixed term had expired. However, this is not what Section 21 (2) says. In short, it read “A [Section 21 (1)] Notice ….may be given before or on the last day on which the tenancy came to an end”. It does not say “may only” so nothing is said about the use of such a notice being given after the last day of the fixed term.
The effect
This therefore opened up the ability for a landlord to rely on a Section 21(1) Notice even after the expiry of the fixed term and, under the provisions of Section 21(1) that notice did not need to expire on a particular date and nor did it require any date to be specified in the notice at all.
Therefore, on the facts of the case itself, the landlord had given notice on the 18th October 2011 and the dates provided for within that notice (of which there were two), both gave at least two months notice. Importantly, in Spencer –v- Taylor the possession proceedings were not issued until both of these dates had passed. There was no issue for the Court to decide that the first date was wrong (ie. the specified date as 1st January, which was not the last day of the tenancy period) as the Court had decided that the notice was valid under Section 21(1) (where no specified date was required).
The Court did address the issue of two different dates and stated that the reasonable recipient of a notice (with two different dates) would have looked at the back of the notice itself and the explanatory notes therein and seen from that that the 1st January 2012, being a Saturday, was ineffective, and should then be able to work out the correct date relied on the saving provision. This issue has always been one of confusion for landlords in relying on a Section 21 (4) Notice. It was of little effect within Spencer –v- Taylor and whilst the notice was effective for both the purposes of Section 21(1) and Section 21(4), the Court decided that Section 21(1) prevails.
The caution
However, whilst Spencer –v- Taylor now provides that a Section 21(1) Notice may be served even after the fixed term of the tenancy has run out, this can only be relied upon where the tenancy started out as a fixed term tenancy.
There is an important point to raise in this respect. Whilst the Court have not specified as such, it is arguable that the decision only applies to cases where not only the tenancy started out as a fixed term tenancy but then continued as a statutory periodic tenancy. This is due to the provisions of Section 21(3). It is a technical argument which I will not cover here but it provides a provision whereby a Court could limit the application of Spencer –v- Taylor so that it applies only to tenancies that are now a statutory periodic tenancy following the expiry of a fixed term. Therefore, where there is a contractual periodic tenancy, landlords should still rely on a Section 21(4) Notice. This is also the case where the tenancy was a periodic tenancy from the outset.
The current application of Spencer –v- Taylor is such that Section 21(1) Notice can be used following the expiry of a fixed term (subject to the above provisions). Provided that all possible valid dates that arise out of that notice have gone by before pursuing a claim for possession, the notice should be valid.
The decision, as a Court of Appeal decision, can therefore be relied on although there remains the possibility that it will be overturned by the Supreme Court. Whilst there are the provisos as mentioned above, however, landlords may wish to continue with the “original” way of drafting Section 21 Notices so as to avoid any issues being raised by tenants. Landlords may still, therefore, wish to rely on Section 21(4) Notice albeit caution must be applied in drafting such notices so that the use of two conflicting compliant dates (where a saving provision is used) does not invalidate the notice. Clear notes would need to be included within the Section 21(4) Notice in order to make it clear which date would prevail as the effective date. Even if the Section 21(4) Notice is invalid, it may be valid for the purposes of Section 21(1).
The position is, as ever, not entirely simple. Notices should not confuse tenants and hence the consideration for a re-writing of a Section 21 Notice.
Gareth Archer 