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01/06/2020

Flaming June

A couple of notes for the first of June. (It looks lovely out there, but if 6 socially distanced people from separate households turn up in my block’s communal gardens I will Not Be Happy).

The Tenant Fees Act 2019 as of 1 June 2020 applies to all tenancies and statutory periodic tenancies entered into before 1 June 2019. This means that any term in a tenancy agreement which requires what is now a prohibited payment is of no effect, and any landlord or agent who demands and receives such a payment will be in breach. If the payment is made by the tenant by mistake, it must be returned within 28 days. If the landlord is on breach (even via their agent), then no section 21 notice can be served. There is also the prospect of a fine of £5000 (or up to £30,000 on repeat offences), having to repay the payment and banning orders.

There is a question over fees that have been taken ‘in advance’, before 1 June 2020, but where the reason for the fee occurs after 1 June 2020 (eg for a checkout fee). As my colleague Sarah Cummins explains here, that is likely to be a prohibited payment.

And yes, I need to update the section 21 validity flowchart again.

Also in force from 1 June, but not actually applying to new (or any) tenancies until 1 July 2020 are The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020. So, any private landlords with a current void should ensure that the property complies, because for any tenancy starting on or after 1 July 2020, there is a penalty of up to £30,000 for non-compliance. (Our note on the draft regulations is here.) MHCLG has issued Guidance for landlords, tenants and local authorities on 1 June 2020.

[Update – as noted by Eva in the comments, the Regs apply to all ‘new specified tenancies’ from 1 July 2020. But a ‘new specified tenancy’ is defined as a tenancy that starts on or after the date the Regs are in force. The Regs are in force on 1 June 2020. So what I think this means in effect is that from 1 July 2020, the Regs will apply to any relevant tenancy commencing on or after 1 June 2020.]

 

 

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.

18 Comments

  1. T Dawson

    As it stands, for a S21 possession order a landlord is required to prove that there is a valid gas certificate, EPC certificate etc. Will the ESS be added to that list?

    Has there been any news regarding the MEES regulations surrounding the EPC and S21? From 1 April 2020 all EPCs for rented properties have to be an E, but what if it’s an F or a G when a landlord applies for a S21 possession order on or after 25 June? Will the judge ignore that the landlord is in breach of the MEES regulations simply because the requirement is only that there is a “valid” EPC? What does “valid” mean – that there is a 10 year certificate or it’s the required minimum of E?

    Reply
    • Giles Peaker

      ESS won’t be added to the ‘required for s.21’ list. I presume in view of the impending removal of s.21.

      The MEES requirement is distinct from the EPC requirement for s.21, I think. An EPC is valid if properly obtained. Whether the property is capable of still being let or not wouldn’t affect the validity of the s.21 notice (which I suppose makes sense – if the property can no longer be lawfully let, then it wold be odd to prevent the landlord from gaining possession.)

      Reply
      • T Dawson

        Thanks for the info, much appreciated, but landlords have had up to 2 years to either upgrade their property to an E or issue a S21 before 1 April 2020. Although it would be odd to prevent a landlord from gaining repossession (of their illegally rented out sub-standard property) I don’t see why a tenant couldn’t counter claim disrepair and offset that against the landlord’s court costs, particularly if the landlord was asked to upgrade and they refused to do so, instead issuing a S21. (This is a hypothetical case, not a real one.)

        Reply
        • Giles Peaker

          It isn’t disrepair unless there is disrepair. If the property is impossible to heat adequately, there may be a housing conditions (counter)claim under s.9A and 10 Landlord and Tenant Act 1985, how long for depends on when the tenancy started. But while an F grade EPC might be evidence in such a claim it is not in itself sufficient.

  2. Ben Reeve-Lewis

    I have 3 electricians in my circle of friends. Every one of them has said the same 3 things independently:-
    There aren’t enough electricians to do the job if every landlord wanted them.
    It’s not particularly well paid or popular work
    Most properties that would normally pass muster won’t pass this test.

    Will this be another Well intentioned but impractical law? Also taking into account local authority staffing levels and appeal processes with perhaps not so strident tribunal judges.

    Reply
    • David Heal

      Ben, have your friends given any indication of why most properties will not pass the test under the new regime?

      Reply
      • Ben Reeve-Lewis

        I didnt ask to be honest David. I’, not tech minded but the last fella to say this was shortly before lockdown, when I was having a new consumer unit fitted. I told him about the new regs and he pointed out that whilst our family home was perfectly safe and acceptable, it wouldnt pass as a rented property.

        Reply
  3. Tom

    28 days to return payments taken by mistake not 21?

    Reply
  4. Tom

    As Ben suggests, local authorities will need to employ extra staff to receive, check, file and archive/purge EICRs, EICs and MEIWCs and pursue any follow-on actions. For every document I send to the LA (and there will be lots) I will be demanding acknowledgement they have received it as proof. Busy times ahead for LAs and sparks.

    Reply
  5. Eva

    Thank you for this post. I may be wrong but I’m afraid there might be a slight problem with the wording of the electrical safety standards regulations in terms of which tenancies they apply to… Reg 1 states they come into force on 1 June 2020 and apply from 1 July 2020 to all ‘new specified tenancies’. But if you check the definition of a new specified tenancy in reg 2, it says that a ‘new specified tenancy’ is a tenancy that starts on or after the day the regulations come into force (1 June as per reg 1(2)). So, the regs apply from 1 July 2020 to tenancies that started on/after 1 June 2020… ?

    Reply
    • Giles Peaker

      Ah yes, so it does. Well, I suppose that is functional, if messy. I’ll add a comment on that.

      Reply
    • Michael Barnes

      I cannot find regulations that sy this.

      Could you provide a link to them, pleae?

      Reply
      • Michael Barnes

        Forget it.

        From the position of the note in the OP I thought it was TFA regulations, but I now see it is Electrical Safety regulations.

        Reply
  6. Ryan

    You say that a landlord or agent who demands and receives a payment will be in breach; what’s your opinion on a scenario where a tenancy ends on 31st May 2020 with the tenant liable to pay a check out fee at that time but fails to do so, the landlord then brings an action at court or with the deposit scheme for payment – would that be prohibited because any payment would be received after 1st June 2020, or permissible because the cause of action accrued before the term itself became banned and/or because the person making the payment would not be ‘the relevant person’ per s.30 (6).

    Reply
    • Giles Peaker

      If the fee was due on 31 May 2020, then it was due and not prohibited.

      Reply
  7. Peter

    Hi Giles, I wonder if you can clarify a legal point?

    Specifically where you say above “If the landlord is on breach (even via their agent), then no section 21 notice can be served” (for Tenancies that started after June 1 2019)

    My query is to confirm whether the reason that even if their agent charges a prohibited fee that has not been repaid (or deducted with the consent of the tenant as specified in the Act) at the date the Section 21 is issued, is because of the UK Law of Agency or Commercial Agency.

    Basically that it is common law that a Landlord is liable for the actions of their agents, especially if the fee relates to something that is a requirement or expectation of the Landlord such as Tenant Referencing fees. I cannot find any case law on this on bailii to suggest otherwise, it seems clear to me that the intention of the legislation was to prevent prohibited fees so they would not have wanted a loophole to be created.

    I remember that it was the same with Deposit Protection and that they added the option for the Tenant to claim against the agent, but I am interested in the preventing section 21 aspect.

    I would be grateful for your thoughts on this or any case law you are aware of that I might have missed.

    Many thanks and Happy New Year

    Reply
    • Giles Peaker

      Hi Peter

      You are right that the restriction on a section 21 only applies where a landlord breaches section 1(1) or Schedule 2 (holding deposit) Tenant Fees Act 2019. (Section 17). So arguably not applying to charges by a letting agent where these are not direct (or possibly indirect) payments to the landlord or demanded on behalf of the lndlord. My statement was ‘landlord in breach, even via their letting agent’. If it is wholly and only the agent’s breach (eg, charging tenant for a renewal tenancy agreement beyond the 50%/reasonable amount limit), then the s.21 restriction probably won’t apply.

      Reply

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