2020 Vision – An update for residential landlords
Clare Castillo, 19th March, 2020
There can now be no doubting that the single biggest impact on the private rented sector (PRS) in 2020 will be the coronavirus
There can now be no doubting that the single biggest impact on the private rented sector (PRS) in 2020 will be the coronavirus.
The Government announced yesterday, on 18th March, that it will be introducing emergency legislation (a) to ban landlords (both social and private) from issuing possession proceedings ‘during the crisis’ and ‘for at least the next three months’ and (b) introduce a new pre-action protocol for possession claims which will apply after the three months (or however long the emergency legislation is in place for) to support engagement between landlord and tenant. What we have is a headline, and the details still unclear. We do not know, for example, when the emergency legislation will take effect from, whether it will cover section 21 proceedings (it seems likely that it will) and what the effect will be on proceedings which are already underway.
As for any possession matters that are already making their way through the courts, the approach of HM Courts and Tribunals is presently to carry on business as usual. But regardless of whether or not existing proceedings will be affected by the new legislation, it is highly likely that disruption will seep its way into the Court system before too long.
We will provide further updates once the legislation is published in the coming days and once further details become clear.
The best advice available in the meantime is simply to try to work with tenants over the coming months by trying to agree payment plans and/or temporary rent reductions and advising and assisting tenants where possible to reach out for any support, such as Universal Credit, that they can. Landlords should also check the terms of any rent protection insurance cover they may have.
Other legislative updates
Even before upcoming ban on evictions was announced, it was already clear that 2020 (just like many before it) was going to be a busy one for housing law and the PRS in general. With a number of further measures coming into force with the aim of providing greater protection for tenants and some key judgments in the pipeline, there will be a lot of other developments for landlords to keep on top of in the coming months.
The following is a selection of the ‘highlights’ for the year to come:
- The Renter’s Reform Bill
We will start with the big one that we often get asked about. The PRS has been waiting with bated breath for more details of the Government’s intended ‘generational change’ to the assured shorthold tenancy regime by effectively abolishing ‘no-fault’ evictions under section 21 of the Housing Act 1988 and, thus, the assured shorthold tenancy regime as a whole. The intention to introduce a Renter’s Reform Bill was announced in the Queen’s Speech of December 2019 but we are still blissfully unaware of the details of what that might entail. Until such time as the bill begins (likely in 2020), broad headline announcements are all we really have to go on. The Government’s intention is:
- To remove section 21, and assured shorthold tenancies as a whole, from the Housing Act 1988.
- To strengthen the grounds for possession currently set out in Schedule 2 of the Housing Act 1988.
- To improve the court process to make it quicker and easier for landlords to use.
- To introduce a new lifetime deposit for tenants.
Watch this space for more details of what will prove to be a complicated time for the PRS.
- Gas Safety Certificates– can you serve this only once?!
Unreported County Court judgments (in particular, Caridon Property Limited v Monty Shooltz and Trecarrel House Limited v Rouncefield) uphold the ‘general wisdom’ that a landlord will be prevented from using the section 21 procedure (for as long as such a procedure exists!) where they had failed to prove the tenant with a gas safety certificate at the outset of the tenancy. The Landlord in the latter case was given leave to appeal to the Court of Appeal, which will provide, in due course, a much-needed legally binding decision on this point of law. We are still awaiting the judgment, though the hearing had reportedly been set for January 2020. Again, watch this space.
- Tenant Fees Act 2019 (“TFA 2019”)
From 1 June 2020, any term in a pre-existing tenancy or relevant statutory periodic tenancy requiring a ‘prohibited payment’ will no longer be binding. Under the TFA 2019, landlords (or agents) cannot require a tenant to make certain ‘prohibited payments’ in connection with their tenancy. Prohibited payments include, for example, a tenancy deposit of more than 5 weeks’ rent, a refundable holding deposit of more than one weeks’ rent and payments to change a tenancy of more than £50 (or reasonable costs if higher). The section 21 eviction procedure (again, for as long as it exists) cannot be used by any landlord who has not repaid any ‘prohibited payments’ to the tenant.
- Homes (Fitness for Human Habitation) Act 2018 (“HFHHA 2018”)
The HFHHA 2018 implies a covenant into tenancies in the private and social rented sectors that a property is provided and kept in a state of fitness for human habitation. Whilst the Act took effect for new tenancies entered into from 20 March 2019, landlords had a one-year transition period in which to ensure compliance for pre-existing tenancies. From 20 March 2020, the rules apply to all pre-existing periodic tenancies, including statutory periodic tenancies that have arisen following the end of a fixed term assured shorthold tenancy that was granted before 20 March 2019.
- Accelerated Possession Procedure
An amendment to CPR 55.11 and 55.12 will take effect on 6 April 2020, removing pre-1997 tenancies and oral tenancies from the accelerated possession procedure. The Civil Procedure Rules Committee also approved a revised N5B claim form which will reflect changes under the Tenant Fees Act 2019.
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