MRC Estate & Letting Agents Ltd
Driving out ‘rogue’ landlords
The slew of new legislation either in force or in the pipeline appears to be geared to driving from themarket both rogue landlords an rogue agents the consequences of which is aimed at driving up living standards and improve conditions for tenants
Tenant Fees Act 2019
The Chancellor of the Exchequerannounced the Government’sintention to ban fees to tenants in theAutumn Budget 2017. It shouldtherefore come as no surprise thatRoyal Assent has been granted andthe Act is highly likely to come intoforce on 1st June 2019.
Section 1 deals with prohibitions onlandlords. Section 2 introduces theban for agents. The separation isdeliberate as some of the rules aredifferent e.g. that landlord may stillserve a section 21 even if the agenttakes a prohibited payment.
All fees and payments required by thelandlord or Agent are prohibitedunless they are identified in Schedule
1. There are 10 permitted paymentswhich mercifully includes rent,utilities and council tax. A 5 weekdeposit in the main is permitted aswell as a 1 week holding depositwhich is subject to strict treatmentrules found in Schedule
2. Paymentsrelated to changes to the tenancy orearly termination of the tenancy isalso permitted subject to theregulations in Schedule 2
Default payments are limited to theloss of keys or other security deviceand to interest on late payment of rentalthough. A payment for damages isalso a permitted payment subject tothere being a breach of the tenancyagreement or other agreement.
After the coming in to force of the Actit will be an offence even to require aprohibited payment for instanceputting it into a tenancy agreement.Taking a prohibited payment will ofcourse be an offence although thereare transitional provisions fortenancies granted before the Actcomes into force.
Rules around the repayment ofprohibited payments and enforcementare set out in various sections throughthe Act. The penalty for a first offencein section 8 and is up to £5000 peroffence. A second offence in section12 is either a financial penalty up to£30,000 or a criminal conviction andan unlimited fine which may lead to abanning order. The consequences ofgetting it wrong are, as you can see,extremely serious.
The Act applies to all assuredtenancies including assured shortholdtenancy agreements and licences i.e.resident landlords looking for lodgersexcluding long leases and by defaultcontractual tenancies e.g. a companylet.
Homes (Fitness for HumanHabitation) Act 2018 (the Act)
The vast majority of landlords arekeen to ensure that their tenants arelooked after and that the property iswell maintained. When it goes wrong,however, the tenant has a limited andprotracted route to get disrepairremedied.
This new Act which came into forceon 20th March 2019 updates theLandlord and Tenant Act 1985 (L & TAct 1985) and gives the tenant theright to take a landlord to courtdirectly for disrepair where they mayseek specific performance i.e. to getthe work carried out andcompensation. As action will be takenthrough the courts and compensationis available we can expect to see ‘nowin, no fee’ lawyers chasing a shareof any compensation awarded.
There is an implied covenant withineach tenancy agreement, to which theAct applies, that the property is fit forhuman habitation at the start andthroughout the tenancy. There is afurther implied covenant in eachapplicable lease by the tenant that thelandlord, or someone authorised inwriting by the landlord, may inspectthe property to inspect its conditionand state of repair. This covenant issubject to the tenant being given 24hours written notice with the visit at areasonable time of the day.
We expect that landlords will becomeresponsible for disrepair uponnotification although in the case ofcommon areas, for instance in anHMO, the landlord will be responsibleimmediately the disrepair occurs.
The property will be considered to bein disrepair and if not reasonablysuitable for occupation if it isdefective in any of the 9 matterswithin section 10 of the L & T Act1985 and section 10 is amended toinclude the 29 hazards from thehousing Act 2004.
As the Act is amending the L & T Act1985 it applies to all tenancies wherethere are landlords and tenants and soexcludes licences. The Act will applyto all new tenancies granted after 20March including statutory periodictenancies arising. A transition periodof 12 months applies to existingstatutory periodic tenancies unless anew tenancy arises.
Some exemptions are listed in section9A(2) of L & T Act 1985, however,the importance of maintaining aregular and documented inspectionroutine and responding promptlycannot be overstated.
Comments