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08/10/2021

Private sector assortment

Some bits for private sector tenancies (in England, mainly), including s.21 notice periods, Tenant Fees Act and tenancy ‘churn’, an updated electrical safety guide for tenants, and the distant prospects of a Renters Reform Bill.

I’ve belatedly updated the section 21 notice validity flow chart to incorporate the post 30 September 2021 notice period changes. Thankfully it only took a small tweak. I’ve also added clarity that the ‘not within the first first months’ rule only applies to the initial fixed term, so not to any replacement or subsequent fixed terms with the same landlord, property and tenant. The flow chart, and the notice period calculator on the same page, still perforce address the variety of covid rules notice periods.

My colleague at Anthony Gold, Robin Stewart, has written an interesting post on a First Tier Tribunal decision in 3 Leighfield House, Hackney, London N4 2TR : NS/LON/00AM/HTC/2021/0010 concerning a letting agent’s fee of £393.54 charged to a tenant who wished to be replaced in a shared house. The fee was broken down as

Referencing the new tenant: £23.94

Inspection £58.80

Creating new tenancy agreement £274.80

Re-registration of deposits £36

The tenant brought a Tribunal application that the fee was unreasonable, while the agent, unsurprisingly, argued it was reasonable compensation for the work done.

Robin’s note is well worth a read, but the upshot is that the Tribunal decided that as the Tenant Fees Act 2019 expressly allows for a charge being the higher of £50 or “reasonable costs”, weight should be given to the “determinate sum” of £50 specified by Parliament, and that this sum should ordinarily be the most that is charged to tenants.

“The better approach, then, is that, to escape the £50 upper limit, a landlord or letting agent must show that there is some proper particular consideration or reason for the Tribunal to conclude that £50 should not be considered a reasonable limit. This need not be something truly exceptional, but the landlord or letting agent must be able to point to something that makes the charge at least somewhat out of the ordinary run of similar transactions.”

The FTT found this was supported by the Govt Guidance, but guidance is, in the end just that. This is also, of course, a non-binding FTT decision, but an approach that others may well follow, or until there is an Upper Tribunal decision on the issue.

And then, as Robin notes, there was a further unexamined issue of whether this was a ‘novation’ – a new tenancy for all parties – as the Tribunal and the parties took the situation to be – or an ‘early termination’ of the tenancy, taking effect as surrender and regrant. The Tenant Fees Act makes no mention of £50 in the context of ‘early termination’.

The Department formerly known as MHLCG and now, poetically, as the Department for Levelling Up, Housing and Communities (DLUHC) has updated the “Guide for tenants: electrical safety standards in the private rented sector“, explaining the requirements of the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 on landlords.

And finally, given the reported comments of Eddie Hughes – a housing and homelessness minister at DLUHC – at a fringe meeting at the Conservative conference, it appears that the Renters Reform Bill, and with it the promised end of section 21, may still be some considerable distance in the future. He is reported to have said they are:

still “in roundtables” and virtual events speaking with stakeholders.

and

“We’re reaching out to all elements of the sector to try to make sure there are no unintended consequences”

Roundtables and ‘reaching out’ for a proposed Bill announced in 2019 suggests a lack of urgency, Let us hope it is not a lame DLUHC.

 

 

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.

3 Comments

  1. Timothy

    Thank you, Giles. Lame DLUHC is excellent. I hope it sticks. Although I suspect DLUHC won’t even be around long enough for them to come up with a consistent definition of levelling up.

    Reply
  2. Tom

    My knowledge is limited so apologies for raising what may seem like a silly point/question…in 3 Leighfield House, Hackney, London N4 2TR : NS/LON/00AM/HTC/2021/0010 there was no third party to which the tenancy/contract was transferred so there could not have been a novation?

    Reply

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