Troubles with TLAs – HMOs and EPCs

Home Group Ltd v Henry. County Court at Newcastle. 21 May 2018

For post October 2015 assured shorthold tenancies section 21A means that no s.21 notice may be served when the landlord is in breach of a prescribed requirement. One of those prescribed requirements is – via s.2(1) The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015:

the requirements contained in—

(a) regulation 6(5) of the Energy Performance of Buildings (England and Wales) Regulations 2012(2) (requirement to provide an energy performance certificate to a tenant or buyer free of charge);

But there has for some time (in fact since 2015) been a bit of a question over how, if at all, the EPC requirement applied to tenants of HMOs. Indeed, I flagged it as a ‘grey area’ in the section 21 validity flowchart. The reasons for it being grey will become clear…

This was a county court appeal of a possession hearing which centred on the issue of whether an EPC was required for a tenant of an HMO.

(Sorry I’ve sat on this for a bit. It wasn’t wholly clear that it was OK to publish. My thanks to Peter Marcus – Zenith Chambers, and Alice Richardson – Trinity Chambers, for details of the case and notes of judgment.)

Mr H has an assured shorthold tenancy of a room in a house of multiple occupation, described as a “single bedroom with en suite together with shared use of the following communal facilities: kitchen, lounge and shower room”. Home Group were the landlord. In September 2017, Home Group served a section 21 notice and brought possession proceedings. Mr H defended on the basis that the s.21 was invalid as no EPC had been provided.

A possession order was made and Mr H appealed. The first instance finding that Mr H’s tenancy was not of a self contained property and was not of a building or building unit was not appealed.

Mr H argued that s.2(1) of the AST regulations (as above) referred only to reg 6(5) of The Energy Performance of Buildings (England and Wales) Regulations 2012, which states

The relevant person must ensure that a valid energy performance certificate has been given free of charge to the person who ultimately becomes the buyer or tenant.

There was no reference to the rest of Reg 6. There was no express incorporation of the definitions in the rest of the 2012 Regulations. Further, the notes to form 6A – the prescribed s.21 notice – make no reference to circumstances in which an EPC would not be required. There was no reason why tenants of HMOs should be treated differently, so the 2015 AST Regs should be read accordingly.

Home Group argued that:

The requirement to provide an EPC under reg 6(5) of the 2012 Energy Regs only arose when a building was let – Reg 6(1) “Subject to regulation 8, this regulation applies where a building is to be sold or rented out.”

A building (which also includes reference to a ‘building unit’), was defined at Reg 2 “building” means a roofed construction having walls, for which energy is used to condition the indoor climate;” and ““building unit” means a section, floor or apartment within a building which is designed or altered to be used separately;”

An EPC – reg 9 – is to be prepared for ‘the building’ as the basis for assessment.

A bedsit was not a building, nor was it a building unit as it was not designed or altered to be used separately.

DCLG guidance in 2011 (on the old regs) said was not required for a room. 2017 MHLCG guidance on EPCs also stated that an EPC was not required for a room.

The 2015 AST regs did not impose an obligation on the landlord that was greater than that of the 2012 Energy Regs.

HHJ Kramer dismissed the appeal, holding:

The 2015 AST Regs did not, in themselves, impose new obligations, but referred to obligations in other regulations. So, if the obligation under Reg 6(5) only arose in the situations set out in the rest of the Energy Regs, that was also the only point it was an obligation for the purposes of the AST Regs 2015.

While there was no derogation expressly made in the 2015 AST regs for tenancies of HMOs, this would have required a new definition of EPCs to be relevant to a room, not a building or building unit.

The explanatory note to the form 6A was not in itself the law, and the notes here were misleading.

Comment

This is a county court appeal to a circuit judge, so not binding. That said, these were clearly the lines of argument on each side that we’ve been waiting for quite a while to see ruled upon. Indeed, I am a little surprised not to have heard of other cases, or indeed see a higher court appeal, on the issue.

While this has to remain technically a grey area, the next challenge, surely, is whether a room in an HMO falls under ‘building unit’ as designed or altered to be used separately, whether the MHCLG guidance on EPCs is right, and whether there is really any policy reason why a prospective HMO tenant should not be informed of the energy efficiency of the building.

About Giles Peaker

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts, and still is Nearly Legal on Google +.
Posted in Assured Shorthold tenancy, Housing law - All, Possession and tagged , .

5 Comments

  1. Saw your twitter post on this the other day which had me scratching my head, so thanks for this, very interesting.

  2. So in defending against an invalid s21 on the EPC issue, it is material to ascertain whether the room being rented has been altered or specially designed or is merely a room that would normally be used as a bedroom in a family home.

    An occupier renting from a dodgy rent 2 rent scammer who has carved up a larger room into a couple of smaller ‘Building units’ with plasterboard in order to maximise income (ie, 90% of cases we deal with) would need an EPC to validate a s21, whereas the renter of an unaltered bedroom wouldnt?

    In which case I wonder what changes would have to be made for a court to consider that a room had been altered to be used separately? A lock on the room door?

    • Decision seems reasonable to me as without its own kitchen it is not “designed or altered to be used separately”.

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