The below Bill failed in Parliament on 28 November 2014 and we thought that was going to be the end of it for a while (as reported by Shelter). However, parts have today (4 December 2014) been added to the Deregulation Bill which is the same Bill where amendments relating to Superstrike are being made. Not all of the proposals have been added to the Deregulation Bill – please see our more recent article which explains which parts have moved across.
As our subscribers and regular readers are aware, we don’t like to get too involved in speculation or writing extensive articles on Bills at a very early stage because without exception, they end up totally different by the end. We cover the Bill here but please note that nothing contained below is likely to be how it ends up (frankly, not wishing to go all RLA, if it stays as is, I for one am selling up!)
The provisions proposed in the Bill outlined below would only apply to England.
Section 1 of the proposed Bill provides that a section 21 notice would be invalid if before the notice was given the tenant had made a complaint about repairs to a local authority and a notice has been served by the local authority on the landlord in relation to that complaint requiring works to be completed. What is worrying about this is that it includes a hazard awareness notice which it’s contents can never require a landlord to carry out the works contained in the notice under the Housing Act 2004 yet, it would be an absolute defence to a section 21.
The other worrying part is that it would be a defence even if the local authority hadn’t got round to serving notice and they were still deciding whether to inspect, decided to inspect but not got round to it, conducted an inspection but not yet decided on action or had decided to serve notice but not got round to serving notice.
It is bizarre that throughout this whole process there is no requirement to contact the landlord first? If a landlord has not been told about the defect (or could not reasonably have known) then there is no breach of the obligation to repair. Even then, there is still no breach if the works are carried out with reasonable expedition. 1 It seems a strange situation to me that despite a landlord not even being in any breach of any law or contract, the landlord is potentially nonetheless restricted from serving a section 21. Have in mind that even if an improvement notice is served, there has not necessarily been any breach of contract or law at that time until the improvement notice has expired without the works being carried out.
In our view, a better way would be to first require the tenant to request whatever work from a landlord in writing. If there is no reply, a reply is unsatisfactory, or works have not been carried out, within 14 days, a request to the local authority must be made. Only after an actual physical improvement notice has been then served after this full process should a section 21 notice be held to be invalid if served within 6 months after the notice from the local authority. If there is some emergency in the property for example a dangerous power socket which has imminent death, there are still ample provisions under the Housing Health and Safety Rating System (HHSRS) to deal with this as an emergency and within the 14 day period we suggest. After all, the landlord might just carry out the works upon notice being given!
We fully appreciate there is no correlation between section 11 repairs and the inability to serve a section 21 notice in the Bill because it all relates to the HHSRS which is different. Still, it must surely be only right and fair that a tenant has at least asked a landlord in writing to do the work and only after a refusal restrict the ability to serve a section 21 for 6 months in retaliation for asking?
The Bill proposes that a section 21 notice would nonetheless be valid if the works required to be completed in the notice served by the local authority were as a result of the tenant not acting in a tenant-like manner or a breach of some express term in the tenancy. The section 21 would also be valid if the complaint is “totally without merit”. As too if the property was genuinely on the market for sale.
The crucial problem with all of these almost impossible questions to answer about whether something has merit or not is that it turns a section 21 into a potentially discretionary notice rather than mandatory. The whole reason we are not back in the Rent Act 1977 days of poor quality property and low rental supply is because of the ability to serve a section 21 notice without restriction. If that is lost as this Bill essentially proposes, we WILL go back to those days.
Removal of “last day of a period of the tenancy”
It is proposed in the Bill that the provision contained in section 21(4)(a) Housing Act 1988 requiring a periodic tenancy notice to expire on the last day of a period be removed which would have the effect that just a straight two months would be required. This would make things much simpler but is no longer necessary for a statutory periodic tenancy after Spencer v Taylor.
A six month “use it or loose it” provision is suggested in the Bill whereby a notice would not be allowed to be served within four months of the first tenancy or within four months of a replacement tenancy (presumably to stop the practice of serving notices at commencement) and then possession proceedings must be commenced within 6 months from when the notice was given. As this nearlylegal article which must shurely be right points out, this must be an error because it potentially produces a rare scenario where possession based on a section 21 would be impossible. Further, it must be an error because on the current wording if a notice was served on a 12 month tenancy in month 5, possession could never be sought based on that notice because the notice would have been 7 or 8 months long yet according to the provision proceedings must be commenced within 6 months from when the notice was given.
We (like nearlylegal) assume the provision is meant to say that proceedings must be commenced within 6 months of expiry of the notice although quite why this couldn’t match the current section 8 notice restriction of one year I don’t know. 6 months is too short in our view but we don’t object to the principle that the notice should die at some point and not simply last forever as currently.
We fail to understand why a section 21 notice should not be allowed to be served within the first 4 months? If the tenancy is a six month term as most are, any section 21 cannot expire before then. There is no restriction on any minimum fixed term to be granted so a landlord can grant any length for example a 3 month tenancy. This is often a good thing for a tenant in particular if they are in-between property purchases so only want short term. However, a landlord may well be relying on this short term and the tenant changes their mind yet a landlord couldn’t serve notice until month 4. That seems entirely unfair when the tenant has agreed to a 3 month term and yet refuses to leave, the landlord cannot even serve notice for another month?
The tenant is secure for the first six months because of the strange restriction on a court ordering possession within the first six months from occupation. At least the current system allows possession proceedings to be started during the first six months. This is something Wales are considering removing quite rightly in our view.
Prescribed legal requirements
There are suggested provisions within the Bill which would allow regulations to be made to restrict the ability to serve a section 21 where prescribed requirements relate to:
- the condition of dwelling-houses or their common parts,
- the health and safety of occupiers of dwelling-houses, or
- the energy performance of dwelling-houses.
The Bill proposes the production of a prescribed form for section 21.
Apportionment of rent
The Bill proposes that if a possession order requires a tenant to leave part way into a period of a tenancy and has already paid the rent covering that period and has vacated, the landlord would have to repay an apportioned amount up to the end of that period calculated on a daily basis. As the majority of cases including section 21 are due to non-payment of rent, I doubt this will concern landlords to any great extent. We don’t think this should be ordered at the possession order stage as proposed. Instead, the proposed apportionment should be imposed at the warrant stage. After all, it is only at that point the tenancy ends. 2 The current position is that if a tenancy ends mid period and is payable in advance, there is no requirement to apportion rent for the remainder of that period as rent is payable for the period not daily. 3
Condition of allowing Bill
In it’s current form we fail to see how this bill meets the condition set by Ministers that:
the Bill only targets bad landlords and cannot be used by tenants to frustrate legitimate evictions.
- O’Brien v Robinson  A.C. 912 – “The landlord’s obligation in relation to property in the possession of the tenant is not an undertaking to prevent them ever getting out of repair during the continuance of the tenancy; it is an undertaking to do work of repair on the premises from time to time as and when they have become out of repair. Thus the landlord is not liable for breach of covenant as soon as the premises are in fact out of repair. Until the landlord has notice of the disrepair no breach arises; nor does any breach arise thereafter if the landlord then carries out the necessary work of repair with reasonable expedition.” ↩
- See section 5(1A) Housing Act 1988 ↩
- Ellis v Rowbotham 1900 1 Q.B. 740 ↩