The government has today published the regulations which were made on 26 February 2018 bringing further provisions from the Housing and Planning Act 2016 into force.

The key provisions which come into force are those relating to Client Money Protection which are commenced as from 19 March 2018.

This does not mean that all agents must have client money protection from 19 March! The provisions that are being commenced allow the secretary of state to make regulations requiring client money protection. However, in order to make those regulations the actual provision must be in force. Given that most regulations appear in April it seems likely that this commencement order is preparing the ground for CMP regulations to be made in April. They may come into force then or, more likely, they will be made then to come fully into force at some later date, probably October

We still know very little about the CMP plans. We know that they apply to letting agents, relocation agents, and property managers in England only and that the provisions will require them to join one of a number of approved CMP schemes. Failure to join will be enforced by financial penalties which will be levied by local authorities.

That’s almost all we know. We have no idea who will be running the schemes, what the penalty will be, or how the system will work.

We can make some assumptions though. It is likely that existing CMP schemes will be authorised. There may well be one or more new schemes appearing, likely run by insurance companies at some level. The penalties will probably look very like the current fixed penalty regime for HMO offences with local authorities levying a penalty of up to £30,000 and this being appealed through the First-Tier Tribunal.

However, we will need to wait for the final regulations. Agents who already have CMP will be pleased that this will level the playing field, while landlords and tenants should be happy that their money enjoys better protection, although surveys show that most of them assume that all agents are signed up to this sort of scheme already! Agents who have not got CMP should probably consider joining a professional body as they are likely to be able to offer better terms on CMP than will be available to agents who cannot demonstrate any training or expertise.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

The general principle of ‘caveat emptor’ also known as ‘buyer beware’ has changed over time in the housing sector with statute and regulations intervening to protect vulnerable tenants from their social and private landlords. It was once the case that “Fraud apart, there is no law against letting a tumble-down house”. However, now with statutory and regulatory intervention this has all changed.

However, the law isn’t straightforward and tenants are often not aware of who is responsible for what in repairing their home. There are a couple of misconceptions that we hear often from tenants about repairing responsibilities and what they can do to make the landlord carry out repairs.

Misconception 1: “My Landlord has a duty to fix all the repair problems in my Property.”

Your landlord’s duty to repair any problems in your Property do not extend beyond what is written in your tenancy agreement and what has been implied by statue. The starting point is checking your written agreement to see what repairing obligations your landlord has agreed to. If your tenancy agreement does not provide and written repairing obligations, then you can rely on the implied terms under section 11 of the Landlord and Tenant Act 1985.

Section 11 requires your landlord to:

(a)to keep in repair the structure and exterior of the dwelling-house (including drains, gutters and external pipes),

(b)to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences, but not other fixtures, fittings and appliances for making use of the supply of water, gas or electricity), and

(c)to keep in repair and proper working order the installations in the dwelling-house for space heating and heating water.

Your landlord’s repairing obligations to repair any problems in your Property only arise once your landlord has been put on notice. This means that you or someone on your behalf should have called, emailed, written and/or gone in to the housing office to report the problems to your landlord. If no notice has been given, then your landlord can only be held responsible in very limited circumstances. Once the problems, have been reported your landlord will have a reasonable period to fix the problems. What a reasonable period is will depend on the type of problem reported, so something like a flood from a water pipe should be addressed inn a very short time, but replacing the whole roof may reasonably take much longer.

Your landlord is only liable ‘to keep in repair’ and does not have an obligation to make improvements to the Property. For example, an improvement would consist of providing your Property with a damp proof course that did not previously exist in your Property to stop damp penetration leading to condensation problems.

Your landlord is also responsible for ensuring that your Property is free from any relevant defects arising from or continuing because of an act or omission by the landlord which would constitute a failure by him to carry out his obligations under section 4 of the Defective Premises Act 1972. The section provides that where premises are let as a tenancy, your landlord is under an obligation to maintain or repair the premises. Your landlord owes a duty to all persons who might reasonably be affected by defects in the premises and is required to take reasonable care in all the circumstance to ensure that the premises are safe from personal injury or damage to their property. The duty extends to any visitors, sharers and/or lodgers living with the landlord and arises when your landlord has been notified by someone or ought to have known because of duties arising in connection with other obligations that your landlord may have.

Gas Safety

Your landlord is under further obligations under Regulation 36 of the Gas Safety (Installation and Use) Regulations 1998 to ensure that any gas appliances owned by the landlord are:

1. Gas fittings or flues serving the fitting are maintained and in a safe condition as to prevent the risk of injury to any person in lawful occupation of the relevant premises.
2. Safety checks are carried on the appliance and flue out every 12 months
3. Records of checks are kept for 2 years from the date of the check being made and contains certain information specified under (3)(i) -(ix) of Regulation 36 of the Gas Safety (Installation and Use) Regulations 1998
4. Work carried out to the gas fittings and/or flues is carried out by a Health and Safety Executive approved person
5. Gas safety reports are provided to existing and new tenants within 28 days of the annual check

Electrical Safety

Your landlord is also under an obligation to ensure that the electrical wiring and any electrical goods provided are safe to use. Your landlord does not have an obligation to carry out regular electrical safety checks unless you are living in a house in multiple occupation. Licensed HMOs are required to have electrical safety checks every 5 years.

Fire Safety

From the 1^st October 2015, your landlord is also under an obligation in accordance with the Smoke and Carbon Monoxide Alarm (England) Regulations 2015 (or Housing Act 2004 for licensed HMOs) to ensure that each occupied floor of any premises is equipped with a smoke alarm and that a carbon monoxide alarm is provided in an occupied room that contains a solid fuel burning combustion appliance. Your landlord is also required to undertake checks that the alarms are in working order for any new tenancies after 1^st October 2015.

Misconception 2 – “My Landlord is not carrying out repairs so I am going to withhold my rent to force my landlord to do the work”

It is common for tenants to withhold their rent in a desperate attempt to get their landlord to carry out outstanding repair works. The problem with this is that under the terms of your tenancy agreement your landlord is entitled to bring court possession proceedings against you if you do not pay your rent. Your landlord may need to satisfy the Court on why it would be reasonable to evict you depending on the type of tenancy you hold or alternatively your landlord may get a possession order without the need to satisfy this requirement. Either way you are at risk of losing your home and potentially becoming intentionally homeless. You may possibly be able to put in a counterclaim for any disrepair issues but you would need to convince the judge on why no attempt had been made to resolve these issues previously. You are also likely to face paying your landlords costs if you are unsuccessful in any counterclaim.

Instead of withholding your rent on the assumption that the landlord will carry out works, it is usually better to pay your rent, report the issues to your landlord in writing and keeping a log. If repairs are still not carried out then seek professional advice from one of our solicitors who may be able to assist you.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

An attempt by millionaire landlord Fergus Wilson to silence Danny Hyde, a YouTube vlogger, has been dismissed by the Court.  Giles Peaker acted pro bono for Danny Hyde.

Danny Hyde had made a YouTube video about Fergus Wilson after Wilson’s letting policy was found to unlawfully racially discriminate. In the course of that video, Danny had called Fergus Wilson a couple of vulgar names. Wilson brought a claim against Danny for £10,000 damages to try to get him to take down or change the video, alleging it was in breach of the Malicious Communications Act.  Giles Peaker of Anthony Gold and counsel Gerard Clarke of Blackstone Chambers took up Danny’s defence, both acting pro bono.

At the Yeovil County Court on 31 January, with Danny represented by Gerard Clarke, Wilson’s claim was dismissed outright. The District Judge awarded £3,000 in pro bono costs against Wilson, to be paid to a pro bono legal charity.

Giles says “I’m delighted the claim was dismissed. It had no legal basis and was brought simply to threaten a young man who had said something that Fergus Wilson didn’t like. Danny Hyde was  exercising his right to free expression, nothing more. The award of pro bono costs against Fergus Wilson will hopefully make clear that threatening people with baseless claims is no way to behave.”

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

The government has now published its response to its consultation on HMOs and residential property licensing. Alongside proposals to extend mandatory licensing, the government has announced that it will proceed with introducing a national minimum room size for bedrooms in licensed HMOs. The proposals, which were detailed in the government’s earlier response paper, will prohibit landlords from letting rooms in HMOs to a single adult where the usable floor space is less than 6.51sqm and 10.22sqm for a room occupied by two adults. It will be mandatory for a HMO licence to include a condition that states the maximum number of persons who may occupy each specific room in a property as sleeping accommodation.

Room size in HMOs is frequently a hotly disputed issue between local authorities and landlords and has resulted in a number of senior court decisions in recent years. This blog looks at some of the issues surrounding room size and the potential impact of a national minimum room size.

Currently there are no mandatory HMO conditions or prescribed standards relating to room size

The Housing Act 2004 provides for certain mandatory conditions that must be included in a HMO licence. For example, a licence must contain a condition requiring the licence holder to produce a gas safety certificate (if applicable) and ensure smoke alarms are installed. While there is a power for the Secretary of State to add further mandatory conditions, since the Housing Act 2004 was enacted there have been no mandatory conditions relating to room size. Local authorities regulate room size in HMOs by relying on their discretionary powers to impose licence conditions which restrict or prohibit the use or occupation of particular parts of the property.

The Housing Act 2004 does require the local authority to be satisfied that the house is reasonably suitable for occupation by not more than the maximum number of households or persons or that it can be made so suitable by the imposition of conditions. The local authority cannot be satisfied of this if the house fails to meet prescribed standards for occupation. Again, while a number of standards have been prescribed by regulations, there has never been a prescribed standard relating to bedroom size.

The government intends to change this by both prescribing a minimum room size standard and making it mandatory for licences to include a condition stipulating which rooms in the HMO are suitable for sleeping accommodation and the maximum number of persons who can sleep in each room.

Local Authority Standards – Clark v Manchester City Council

Because there are no statutory prescribed room size standards many local authorities have developed their own guidance setting out the local authority’s view on what size standards it considers acceptable in HMOs. This is to both assist local authority officers with their decision-making and to advise landlords. The problem with this is that local authorities frequently fall into the trap of treating their guidance as if it is a statutory prescribed standard and granting or refusing to grant licences on the basis of whether bedrooms meet their own standards rather than considering the suitability of the property as a whole.

This issue was highlighted in the key Upper Tribunal case of Clark v Manchester City Council [2015] UKUT 129 (LC). In that case the Upper Tribunal concluded that the Council’s adoption of mandatory minimum size standards for bedrooms in HMOs was unlawful. While local authorities were perfectly entitled to produce guidance on room size and while their views should be given weight by the tribunal, local authorities were not able to apply their standards as if they had statutory force. Ultimately the question is whether the property as a whole is reasonably suitable for occupation by a particular number of people. Clark made it clear that it is not permissible for local authorities to automatically prohibit the use of certain bedrooms simply because they fall below the standards set out in their own guidance.

Is the type of occupant relevant to room size?

The type of occupant has also been shown to be relevant in room size cases. This was illustrated in the case of Nottingham City Council v Dominic Parr and Trevor Parr Associates Ltd [2017] EWCA Civ 188 which was heard last year in the Court of Appeal. The Council’s guidance suggested that 8sqm was an acceptable bedroom size and the licences issued prohibited the use of two attic rooms until the usable floor space had been increased. The First-Tier Tribunal had deleted the condition and imposed an alternative condition that the rooms could be used by full-time student who resided in the room for a maximum of 10 months of the year. This was upheld by the Upper Tribunal and the Court of Appeal concluded that there was nothing unlawful about a HMO licence restricting occupation of a bedroom to students only. The Supreme Court has granted permission to Nottingham City Council to appeal the decision.

How will the introduction of a minimum room size standard change things?

First, it will mean that landlords will have to stop letting rooms that fall below the nationally prescribed standard. If they do not then they will be in breach of licence condition and could be prosecuted by the local authority or alternatively receive a civil penalty under the new Housing and Planning Act 2016 provisions. Rooms below the prescribed standard that have previously been found suitable for occupation will no longer be capable of being let separately as sleeping accommodation by any person aged over 10. It is important to note that the new mandatory condition will not affect existing licences but will only apply to licences granted on or after the commencement of the new regulations. This includes renewals of existing licences. Even then there will be transitional arrangements to allow landlords affected by the new rules time to reduce the number of persons in occupation.

Second, local authorities will continue to be entitled, and are encouraged, to produce their own standards complete with figures which set out what size the local authority considers acceptable for sleeping accommodation. This can be higher than the national minimum. For example, in the case of Parr discussed above Nottingham City Council were of the view that 8sqm is an appropriate room size. As the government made clear in its response paper ‘the minimum room size is simply a standard below which a room cannot be used as sleeping accommodation. It is not intended to be the norm or the lowest common denominator.’ However, what local authorities are not able to do is apply their standards as if they have statutory force and automatically prohibit the use of rooms that fall below their own standards. To that extent, the decision of Clark will continue to be relevant in room size disputes.

Third, it will not mean that rooms that meet the new minimum size will automatically be deemed suitable for occupation. In fact, if applied correctly, the introduction of a national minimum room size should have limited impact on rooms that meet the national standard. As is the case now, the question of how many persons or households can occupy a HMO is not dependent on calculating the floor space of each bedroom in isolation. It comes down to whether a specific property, taken as a whole, is reasonably suitable for a certain maximum number of persons or households. The only difference now is that rooms below the national minimum room size will automatically be ruled out as being suitable for sleeping in. However, these rooms can still be taken into account when assessing the property as a whole. They could, for example, provide useful storage space for the occupants of a property freeing up floor space in the bedrooms.

The regulations still need to be approved by both Houses of Parliament but it seems likely that the new standard will come into force sometime later this year. While the introduction of a national minimum room size will bring some clarity to the HMO room size debate, questions surrounding suitability and how local authorities apply their own standards will not disappear. We are likely to see new challenges in the tribunals and senior courts as room size continues to be contested by landlords and local authorities.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

The Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill passed its second reading in the House of Commons today. This is a major milestone towards the Bill becoming law. Highly unusually for a Private Members Bill, let alone one brought by an opposition MP, it now has the support of the Government.

The Bill is brought by Karen Buck, MP for Westminster North. Giles Peaker, partner in the Housing and Public Law team, together with Justin Bates of Arden Chambers, has been working closely with Karen Buck on the content and progress of the Bill, ever since the first attempt to get it into law in 2015.  Giles and Justin helped Karen draft the bill as well as working closely with her as it progresses.

The Bill will at last give all tenants in England a right to a home that is fit for habitation under their tenancy agreement. Their landlord will have an obligation to them to keep the property fit for habitation throughout the tenancy, regardless of whether the problem is caused by a lack of repair or a problem with the nature of the property itself.

Condensation due to poor ventilation, mould growth, inadequate or no heating, dangerous stairs with no hand rails, these and other hazards will finally be something a tenant can take action to have put right.

While private tenants can ask their local council to take action on hazards now, the figures show that many complaints are not acted on and that there is a postcode lottery on the amount of enforcement different councils carry out. Council tenants cannot even rely on this, as a council cannot take action against itself. If the Bill becomes law, tenants can make their landlord put the property in a habitable state, even if the council doesn’t or can’t.

Giles is very proud to be working on the Bill, as it an important step in ensuring that all tenants, private or social, have a home fit to live in. It is part the work of the Anthony Gold Housing and Public Law team, who are committed to fighting for our clients to have safe and decent homes.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

The Welsh government has begun a consultation on the obligations on landlords to deal with personal items left behind by tenants when they leave a rental property.

Tenants often leave behind items when they depart a privately-rented property. In some cases those items are little more than rubbish, sometimes they are very valuable. The reasons for this are complex and run the full range from changing attitudes to possessions in a more throwaway society through to being in a rush and carelessness. For a landlord it can sometimes be very hard to tell the difference between items that have been abandoned with the intention that the landlord dispose of them and items that are of value and have been left by mistake.

The current legal position in England and Wales is set by the Torts (Interference with Goods) Act 1977. This is a fairly old and confusing piece of legislation. However, where a tenant abandons property in a landlord’s property then the landlord becomes a bailor of those goods. A landlord must look after goods abandoned into its possession and make reasonable efforts to contact the tenant to give a notice of intention to sell. If they give such a notice they must give a reasonable notice period and after that they can sell or dispose of the goods. It is common for people to cite the figure of 3 months as a reasonable notice period but that is not precisely what the Act says and a period of 28 days will be sufficient in the vast majority of cases.

In Wales, however, the government is bringing into force the Renting Homes (Wales) Act 2016. This is not expected to be in force until 2019 but Renting Homes is a complete replacement for much of the existing law in the private and social residential sector. Therefore it will also replace the existing system for dealing with abandoned property. The new system for Wales consists of a set of regulations made under Renting Homes and a guidance document to explain them better. These new regulations will only apply where a tenant has abandoned a property before the end of the tenancy, which is the most common situation where additional items are left. Where a landlord believes a tenant has abandoned the property, Renting Homes allows them to give the tenant a 28 day notice that they believe this has occurred. At the end of the 28 day notice period the tenancy ends.

The proposed regulations require a landlord to store property for one month from the end of the tenancy, that is after the end of the 28 day notice period. During that month the tenant can reclaim their property from the landlord but they are required to pay the costs that the landlord has reasonably incurred in storing the items and delivering them if that is agreed. At the end of the one month the landlord can sell or dispose of the property and retain the cost of the storage. If the items are valueless such that the storage cost would unreasonably outweigh the items value or perishable so that they cannot be stored for one month then the landlord can dispose of them immediately.

One of the great things about Renting Homes is that the Welsh government is entirely rethinking the rental system. They are trying to get rid of the confusing web of legislation and create a simpler fairer system. This will be welcome to both landlords and tenants. While such a massive overhaul is unlikely to be carried out in England the government could do more to simplify the law by reviewing older pieces of legislation and tidying up provisions that trip up unwary landlords and create traps for tenants.

 On 1 November 2017, the government moved forward one of its manifesto commitments which was outlined during June’s Queen’s Speech; to ban fees charged by landlords to tenants. The Department for Communities and Local Government published the Draft Tenant Fees Bill, but what does the Bill mean for tenants?

The Draft Bill

Firstly, it is important to note that the Bill is currently in draft form and has not yet been laid before Parliament. Once before Parliament it will undergo usual parliamentary scrutiny in the House of Commons and House of Lords, so is subject to amendments.

Prohibited and Permitted Payments

The bill seeks to prohibit landlords and their agents from requiring tenants to make any payment as a condition of granting, renewing or continuing a tenancy. All payments will be prohibited under the act with the exception of permitted payments which include:

1. Rent;
2. A refundable tenancy deposit (capped at 6 weeks of rent)
3. A refundable holding deposit (capped at 1 week of rent); and
4. Default fees (for example, fees charges for the late payment of rent).

Any other fee paid in connection with the tenancy will be considered a “prohibited payment”.

The Bill contains anti –avoidance provisions which prevent landlords (or their agent) from adding the fees into the first month’s rent and then later dropping the rent once the fees have been recovered. The Bill specifies that any additional amount payable in respect of the initial period is a “prohibited payment”.

Capped Deposits

The Bill imposes a cap on holding deposits at no more than one week’s rent. Holding deposits are payments made by a tenant to a landlord (or agents) to “reserve” the property. The Bill requires the holding deposit to be returned to the tenant within 7 days of the tenant entering into the tenancy agreement. The holding deposit can be used towards the first payment of rent. There will be restricted circumstances in which a landlord might be able to retain a holding deposit which are set out at Schedule 2 of the Bill.

A tenancy deposit is money held by the landlord (or agent) as security for the performance of any obligations of the tenant or the discharge of any liability under the tenancy. The Bill caps tenancy deposits at no more than 6 weeks rent. Any payment which exceeds 6 weeks will be a “prohibited payment”.

Effect of a Breach

Any clause under the tenancy which requires the tenant to make a “prohibited payment” will not be binding. The rest of the tenancy will not be void and tenant will continue to be bound by all other clauses of the agreement.

Enforcement

Trading standards will be responsible for enforcing the provisions. If trading standards are satisfied beyond reasonable doubt that a person received a prohibited payment then a financial penalty of up to £5,000 will be imposed. Repeat offenders can have criminal proceedings brought against them and a fine of up to £30,000 imposed.

Recovery of a Prohibited Payment or holding deposit

Where a tenant has paid a prohibited payment they can apply to the County Court to recover their money. Where a holding deposit has been unlawfully withheld by a landlord (or agent) a tenant can also apply to the county court to recover their money.

Trading standards may help a tenant recover a prohibited payment or unlawfully retained holding deposit by providing advice or conducting proceedings on their behalf.

Trading standards may require the landlord (or agent) to repay the prohibited payments. In these circumstances, the tenant cannot apply to the county court.

What does the Bill mean for tenants?

The bill appears to spell the end of (often extortionate) fees charged by landlord and their agents. The Bill would also end the practice of landlords (or agents) charging tenants for other associated tenancy fees such as check-in inventories and substantial payments of rent in advance.

Enforcement would much depend on local trading standards who would be under a duty to enforce the provisions. If a “prohibited payment” has been paid the tenant would be entitled to bring proceedings to recover their money.

The government has today (17 January 2018) updated the How to Rent guide again.

The How to Rent guide was introduced by the Deregulation Act 2015 and is required to be given to all new tenancies and all existing tenancies which are renewed. It is also necessary to update it when an existing tenancy where it has been served already becomes periodic and on any renewal. Therefore a change to the guide sets off a flurry of activity across the private rented sector. Any landlord or agent who fails to spot this important change is at risk as a section 21 notice is no valid unless the correct How to Rent guide has been provided to the tenant.

Frustratingly, for a change with such important ramifications, the guide has been updated to make the most minor of alterations. This is to remove references to the London Mayor’s London Rental Standard which was abandoned by the Mayor back in May 2017. Given that this was over six months ago it has hardly been a rush job and the change could easily have waited to bring together some material that was of value to tenants. For example, the DCLG (as it then was) had previously suggested that it would be putting information about the Homelessness Reduction Act in the guide, this does not appear to have made it in this version. Equally, if it had waited a few months the MHCLG (to give it its new name) could have added information on banning orders for landlords (expected in force in April 2018), the rogue landlord database, and Karen Buck MPs legislation on fitness for human habitation. Presumably, the guide will now be changed again at some future date to mention all of these. Frankly, the guide could also just have been improved so that it was less dull and more immediately useful to tenants! These opportunities have all been missed.

While all landlords and agents should be aware of this change there is no requirement to immediately rush out and provide copies of the updated guide to all tenants. There is only a need update the guide where a tenancy has been renewed or moves from a fixed term to a statutory periodic tenancy. Tenants who are currently within a fixed term do not need to be given a replacement version of the guide. However, any tenant who is getting a new tenancy or is having their tenancy renewed must get a copy of the guide before they are served with a section 21 notice. It is likely that this will be missed in a lot of cases and there will be a large number of defective s21 notices and possession cases that will fail as a result.