2021 Round Up – Significant developments in the Private Rented Sector in 2021

The Year 2021 has been a year with a lot of significant developments in the Private Rented Sector (“ PRS”). The Year started off with amended guidance and rules continuing in respect of possession claims. There were also significant developments on the case law front with more cases being heard and courts resuming back to normal. This blog focuses on some of the most significant developments in 2021.

Interesting Case Developments  

Tenancy Deposits: Northwood Solihull v Fearn & Cooke [ 2020] EWHC 3538 (QB) – This case considered who can sign the deposit prescribed information certificate where the landlord is a company. The execution requirements for companies are set out in section 44 of the Companies Act 2006. It was held in this case that the prescribed information certificate given by a company landlord must comply with the requirements in section 44 of the Companies Act 2006. If the prescribed information certificate does not comply with these requirements, then a deposit penalty claim may be brought against the landlord. Furthermore, in cases of non- compliance this would also give rise to a defence in a section 21 claim unless the non-compliance had been corrected before the notice was served. It should be noted that this decision is currently under appeal and will be heard in the new year.

EPC (pre- October 2015 tenancies) – In Minister v Hathaway & Anor [ 2021] EWCA Civ 936 it was held that for any assured tenancy which started before the 1 October 2015 there was no requirement to serve an EPC for a valid section 21 notice seeking possession to be served. The requirement to serve an EPC only applies to any post 1 October 2015 tenancies. Further reading on this case and its implications can be found here.

Rent Repayment Orders (RROs) – On the RRO front there have been many interesting decisions throughout the year and too many to detail all of them here. However, focusing on two noteworthy decisions we learnt in Rakusen v Jepson & Ors, Safer Renting Intervenor (2021) EWCA Civ 1150 that superior landlords of tenants are not liable for rent repayment orders and an RRO can only be made against the immediate landlord of the tenant. This news was welcomed by many landlords in the private rented sector but also comes with its own problems. For example, in rent-to-rent agreements where the rent-to-rent company who is the landlord is only a shelf company with no asset thereby meaning that even where a RRO is made the tenant may not actually recover any monetary sums.  A more detailed summary of this case can be found here.

The second noteworthy decision is Williams v Parmar [2021] UKUT 244 (LC) where the Upper Tribunal provided some guidance on how the factors in section 44(4) of the Housing and Planning Act 2016 are to be considered when determining the amount of a RROs. More crucially, the decision highlighted that the Tribunal was not limited to those factors.  In appropriate cases the Tribunal has discretion to order less than the maximum rent repayment order depending on the scale of seriousness of the offence. However, also on the contrary The Tribunal may not make significant reductions in cases involving “professional landlords”. The term professional landlord was not defined. Therefore, it remains to be seen in the next year how the Tribunal approaches this aspect of the decision and applies this to RRO cases. However, the point to take from this decision is that the default starting point for RROs may not always be 100% rent. A more detailed article on this case can be found here.

Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020

From the 1 April 2021, the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 (“the Regulations”) have started to apply to all existing tenancies. The Regulations impose an obligation on Landlord’s to carry out electrical safety checked in their rented accommodation every 5 years and that those checks meet the standards for safety in the 18^th edition of the wiring regulations. There are further obligations in relation to providing copies of the checks to tenants, completing remedial works, and providing a copy of the check to local authorities. A detailed summary of these requirements were previously set out here.

A failure to comply with these requirements can result in the Local Authority taking enforcement action against the landlord and imposing a financial penalty of up to £30,000.00. The Local Authority can also serve a remedial notice.

Breathing Space Moratorium

The Breathing Space Moratorium came into force on the 4 May 2021. The purpose of the Breathing Space Moratorium is to give someone in debt a breathing space for a certain amount of time and protect them from their creditors. The breathing space moratorium can only be granted by a debt advisor and prevents a landlord from contacting a tenant who owes rent arrears if a breathing space is in place. The landlord is also prevented from serving a section 8 notice due to the debt and there are restrictions imposed on enforcement of the debt including obtaining a warrant in respect of the debt, applying for a judgement in relation to the debt, enforcing an existing money judgement for the debt and taking control of the tenant’s belongings due to the debt. Further information including a Q&A on the Breathing Space Moratorium can be found here.

The section 8 notices were updated to reflect the introduction of the Breathing Space and a copy of the updated notice can be found here.

Section 21 Notices and Possession Claims

The extended periods for bringing a possession claim continued throughout most of 2021. For the purposes of bringing a section 21 claim, a 6-month notice period applied for any notices served between August 2020 – 31 May 2021. The notice periods for section 21 notices were then shortened to 4 months for any notices served from the 1 June 2021 – 30 September 2021. From the 1 October 2021, the notice periods for section 21 claims have reverted to 2 months’ notice.  The previously modified notice periods for any possession claims brought under the mandatory or discretionary grounds set out in Schedule 2 of the Housing Act 1988 and Section 8 of the Housing Act 1988 have also returned to their original pre–Coronavirus Act 2020 periods from the 1 October 2021.  A summary of all the notice periods can be found here.

It should also be noted that in light of the changes to the notice periods there were also changes made to the prescribed forms. A copy of the most recent prescribed forms can be found here.

Reactivation Notices and Practice Direction 55C

Any possession claims that were issued at Court prior to 26 March 2020 and were stayed due to the stay on possession claims between 26 March 2020 – 20 September 2020 required the landlord to file a reactivation notice in accordance with Practice Direction 55C. It was possible for landlords to file a reactivation notice to re-start their claim up until the 30 April 2021. The time period for filing a reactivation notice ended on the 1 May 2021. Any claims that are still stayed and were not reactivated by way of a reactivation notice can still be reactivated but are likely to require a N244 application to be re-started at Court.

In terms of Practice Direction 55C, most of the rules set out in Practice Direction 55C came to an end on the 30 November 2021 save for the requirements under paragraphs 6.1 and 6.2 which require the person bringing a possession claim to set out their knowledge of the effect of the pandemic on the defendant and their dependants. Paragraphs 6.1 and 6.2 continue to apply for any new possession claims issued after the 1 December 2021 until 30 June 2022.

Overall Arrangements

The guidance on the “Overall arrangements for possession proceedings in England and Wales” ended on the 1 November 2021. The guidance provided a list of possession claims which may be prioritised by judges and also introduced review appointments prior to substantive possession hearings at Court. However, as the guidance has now ended there is no longer a case prioritization list or review appointments at Courts.

Enforcement

Bailiff evictions for residential premises were banned for most of 2021 but this came to an end on the 1 June 2021. Since this date, bailiff evictions have resumed, and courts have started to process warrant applications. There had been some rumours that there would be another truce between the 13 December 2021 and 10 January 2022 with bailiffs not enforcing evictions during this period. No formal announcements were made in relation to this, and it appears that each Court’s bailiff department is adopting its own approach on this.

Look Ahead to 2022

The Year 2022 appears to be a very exciting year again for the PRS sector with many exciting changes and hopefully the White Paper on the Renters Reform Bill to be finally released. A summary of the things to keep an eye out for in 2022 will be released shortly by my colleague Robin Stewart.