The Private Rented Sector in 2022 – whatever next?

From a legal perspective in many ways 2021 has been a year of ‘more of the same’ for the private rented sector: more delays to abolition of section 21 notices, an extension for most of the year to the restrictions on possession claims which began in 2020, and the same enforcement trends continuing: further growth in rent repayment orders and civil penalties, while some laws are barely enforced at all.

It is impossible to rule out another year of further covid-related legislative delays, but 2022 will definitely see some major legal developments for the private rented sector in England and Wales.

Renters Reform Bill and the forthcoming “White Paper”

The promised abolition of section 21 notices has been delayed several times now. The Government has promised details proposals in a White Paper which was due to be published in Autumn 2021, but is now expected in 2022.

As well as set setting out reforms to the grounds for possession, the White Paper is expected to outline plans for ‘lifetime deposits’, a new requirement for landlords to join a ‘redress scheme’ (agents already must join a Property Redress Scheme or The Property Ombudsman), and proposals to reform the court processes for eviction cases. There have been persistent rumours of the introduction of mandatory registration for private landlords and this might emerge as part of these proposals. The Government may also use this as an opportunity to publish its long-awaited proposals for the regulation of property agents.

Reforms to the ‘grounds for possession’ will very likely include new grounds for possessions, and that is something landlords will welcome. Rather than abolish ‘no fault eviction’, it is more likely the proposals will end eviction by private sector landlords without giving a reason. That is not the same outcome at all.

Northwood (Solihull) Limited v Fearn

In December 2020 the High Court gave judgment in this appeal, which considered how a corporate landlord can properly sign notices and deposit ‘prescribed information’. Mr Justice Saini ruled that the landlord, a limited company, was not required to formally ‘execute’ a section 8 notice for it to be valid, but it was necessary to carry out the full formalities to validly sign deposit ‘prescribed information’. That is, the company had to comply with the requirements for ‘execution’ of a document by a company set out in section 44 of the Companies Act 2006, which means signature by one director alone or an employee is not sufficient.

The result sent ripples through the letting sector, as well as disappointing the tenant, so it was not a surprise when both sides indicated they would appeal.

The case will be heard by the Court of Appeal on either 18 or 19 of January 2022, and the result will likely be published a few weeks after that. This is a hugely significant appeal, and landlords and agents across the country will be watching nervously.

Minimum Energy Efficiency Standards

The current minimum energy efficiency rating for residential property is an E rating, but the Government has committed to raising this to C by 2028. The increase from E to C is very significant – only a small proportion of homes are F and G rated, and those which were tended to be in need of refurbishment anyway. Enforcement has been light touch, and compliance pretty poor. Landlords are supposed to register an exemption if they are letting a property below the minimum standard, and an implausibly low number of registrations are recorded on the public register.

There may not be any changes to the MEES regulations taking effect next year, but the Government is likely to at least publish proposals. A consultation on MEES in residential property closed in early 2021 but the Government has not yet set out its final plans.

It’s also likely that we will see more enforcement action. Funding for enforcement activity was made available to local authorities to bid for this year, and this may lead to the MEES rules being enforced more rigorously.

New smoke and carbon monoxide alarms

In November this year the Government launched a consultation on extending the scope of the Smoke and Carbon Monoxide Alarm (England) Regulations 2015 and amending the statutory guidance “Approved Document J” which supports Part J of the Building Regulations.

The Government propose to extend the scope of the regulations to social landlords and to require that at a smoke alarm is installed on each storey of the premises on which there is a room used for living accommodation. In all rented accommodation, it is proposed that a carbon monoxide alarm shall be required in any room used as living accommodation where a ‘fixed combustion appliance’ other than a gas cooker is used. The amendment to Approved Document J would require that carbon monoxide alarms to be fitted alongside the installation of fixed combustion appliances of any fuel type (excluding gas cookers).

The consultation ends in January 2022

Implementation of the Renting Homes (Wales) Act 2016

It is very likely, almost certain, that 2022 will finally see the implantation of the long-delayed reforms to Welsh landlord and tenant law contained in the Renting Homes (Wales) Act 2016. This Act o the Senedd radically reforms the fundamentals of residential tenancy law, replacing the existing forms of tenancies with new form, and an entirely new framework.

We will cover these developments in detail on the Anthon Gold blog in Spring 2022, but landlords and agents will want to start planning for this soon.