Legal Update – New rules coming in for Landlords

by Property 118

9:31 AM, 5th December 2016
About 2 years ago

Legal Update – New rules coming in for Landlords

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Legal Update – New rules coming in for Landlords

Easy Law TrainingLegal Update

It is really important that landlords are up to date with all the new rules coming in.  So you may be interested in this legal update page provided by Tessa Shepperson of Easy Law Training and Landlord Law.

Tessa will also have a very special offer for Property 118 readers tomorrow so watch out for that.

2016 Legal Update Notes

On 20 October barrister Sam Madge-Wyld prepsented a one day legal update workshop for Easy Law Training. Here are some notes on the topics covered in his presentation.

1.The new Housing and Planning Act 2016.

This is not in force yet but when it is – this is what will happen:

There will be a new abandonment procedure

This sounds good, and indeed it is, but the process will take some time. You will have to serve not less than three formal notices at the property, which need to be spaced about 8 weeks apart. So although you will not have all the bother of going to court, you probably won’t save a lot of time.

Still, it is better than nothing.

Local Authorities will be able to apply for ‘banning orders’

Local Authorities will be able to apply to the First Tier Tribunal for a banning order against you if you have been convicted of a ‘banning order offence’. Most landlords won’t have a problem with this – but it does mean that you need to be extra careful about complying with all the regs. As if you are, for example, prosecuted for breaching the HMO regs, you could be liable for a banning order.

However, it will largely be aimed at the worst ‘rogue’ landlords operating the worst properties. Hopefully not you!

There will be a database of ‘rogue landlords’

You could go on this if you are subject to a banning order, and also if you have been convicted of a banning order offence. The list (at the moment) will only be available to Local Authority officers – but it will obviously be undesirable to be on it.

Rent repayment orders

These are currently used just where HMO landlords do not have a license. However, once these new regulations come into force they will also be used for:

  • Violent entry onto premises
  • Harassment or eviction contrary to the Protection from Eviction Act 1977
  • Failure to comply with an improvement or prohibition order and
  • Breach of a banning order

You really don’t want to have a rent repayment order made against you as it can be hugely expensive – considerably more than having to pay a fine.

In short

As you will see, the act (insofar as the Private Rented Sector is concerned) is primarily about dealing with criminal / rogue landlords. However, this does mean that you need to be really careful from now on about complying with all the regulations – in particular, those connected with HMO properties, as it is easy to fall foul of them and get caught up in prosecutions if you are not careful.

2.Right to rent update

Sam discussed the right to rent rules in some detail and also looked at the new rules due to come in very shortly.

The details for the new rules had not been published at the time of the workshop, but these are now out and are as follows:

Criminal Offence

There is a new criminal offence of renting to someone who does not have a right to rent or, if you are an agent, failing to inform your landlord that the tenant does not have a right to rent.

There is a defence to this if you have taken steps to evict the tenant/s within a reasonable period of time from finding out that the tenants do not have a right to rent – a ‘reasonable’ period of time being three months.

Eviction procedures

Landlords can now serve a notice, which should be in a prescribed form, after receiving notification from the Secretary of State that their tenant/s do not have a right to rent. It must give not less than 28 days notice and must attach the Secretary of State’s notice.

If the tenant has not vacated by the expiry of the notice period, you can treat it as an order of the High Court and get the High Court Sheriffs to evict the tenants – without having to get a Court Order first.

You can, however, only do this if ALL the tenants are without a right to rent. Otherwise, you should use the new Ground 7B which has been inserted into Schedule 2 of the Housing Act 1988. This is a mandatory ground – however, if some of the tenants do have a right to rent, the Judge will have the option to transfer the tenancy into their names alone.

The new eviction ground means that the Section 8 prescribed form is being amended again. This new form will be effective from 1 December so you need to be sure that you are using it. Otherwise, tenants will have a technical defence to claims based on an out of date notice.

3. Enforcement of possession orders

Hopefully, you will not have to bring eviction proceedings against any of your tenants, and if you do, hopefully, they will move out in good time.

But what if they don’t?

The standard procedure is to instruct the County Court bailiffs who are the people who actually go around and physically remove the tenants. However the service is under tremendous pressure and in some parts of the country, in particular in some of the London courts, there are very long waits for a bailiff’s appointment. Which can be eight, ten weeks or maybe even more.

If your tenant is in situ and not paying rent this is obviously bad news and understandably landlords look around for a quicker option.

Enter the sheriff’s – also known as High Court Enforcement Officers.

The Sheriffs’ service

The Sheriffs claim to offer a considerably quicker service. However, as they are only licensed to enforce High Court orders, before they can do anything about your possession order (which will be a County Court order) it has to be transferred to the High Court.

Sheriffs have been doing a rather quick job on this in the past, but it came to light recently that they were doing this by using an incorrect procedure. In fact, the procedure, the proper procedure, is rather cumbrous.

  • The landlord must first apply to the County Court for leave to transfer up to the High Court. Judges will not grant these applications as a matter of course and landlords will have to show that there is a real need.
  • Secondly, once the order has been transferred, an application will have to be made to the High Court Judge and also notice of this will have to be served on the tenants.

Despite this, it may still be quicker to use the Sheriffs in some cases. Although, in order to save time, you really need to make an application at the court hearing, ideally on notice.

In the majority of cases, though, this is not necessary. For example, if your tenant is waiting to be rehoused by the Local Authority they will generally ensure that this is done before any bailiffs appointment.

But the moral of this story is to beware any High Court Enforcement Officers saying that they can get you a quick eviction appointment. Under the current rules, this is impossible.

And if your tenant is evicted via an illegal procedure, your tenant will have a claim for unlawful eviction.

4. Some case law

So far we have looked at the new rules in the Housing & Planning Act 2016, new right to rent rules and changes in High Court enforcement of possession orders. But Sam did not just talk about new rules and regulations. He also told us about the new cases that had been decided over the past year.

I am going to tell you about just two of these – both of them good news for landlords.

McDonald v McDonald

This was a very sad case involving a disabled tenant who had been served a section 21 notice by her parents’ (and landlords) mortgage company who had taken over control of the property.

She put in a defence saying that a possession order would infringe her right to respect for her home guaranteed by article 8 of the European Convention on Human Rights.

Although this particular case was meritorious, all landlords will heave a huge sigh of relief in learning that the Supreme Court dismissed her appeal, saying that

“… there are legislative provisions which the democratically elected legislature has decided properly balance the competing interests of private sector landlords and residential tenants”

So hopefully landlords will be able to rely on section 21 notices (assuming they are correctly drafted of course and meet all the new rules) and need not worry that tenants with disabilities will not be able to set them aside, simply by reason of their disability.

Kumarasamy v Edwards

This was an appeal to the Supreme Court from a Court of Appeal decision which had overset two points which had previously appeared sacrosanct:

  • That landlords cannot be held liable for disrepair if they have not been notified of it, and
  • That landlords cannot be held liable for disrepair if this is not something they are able to do because if is the freeholder’s liability

In the Kumarasamy v Edwards case, Mr Kumarasamy was being sued by Mr Edwards under s11 of the Landlord & Tenant Act 1984 for compensation for injuries he sustained when he tripped and fell on the path at the back of his block of flats leading to the bins. However, his landlords, Mr Kumarasamy, was himself a leaseholder and the repair of footpaths was down to the leaseholder – it was not something he had the legal power to do. Also, he had had no notice of the disrepair from Mr Edwards.

To the relief of landlords and agents everywhere, the Supreme Court overruled the Court of Appeal’s surprise decision. They said a pathway could not form part of the ‘exterior of the building and the fact that it was in disrepair, therefore did not engage s11. Further, Mr Kumarasamy had disposed of his interest in the pathway when he granted a tenancy of the flat to Mr Edwards and therefore Mr Edwards was in possession of it and needed to give Mr Kumarasamy notice of any defect.

So good news, on these two cases anyway, for landlords.

What next?

These are just a few notes on the things Sam discussed.  However, one thing which came over loud and clear from his presentation is that landlords can no longer afford to be ignorant of legal rules and regulations.  Enforcement procedures are getting tougher and Local Authorities are doing more enforcement work and bringing more prosecutions.

Sam’s workshop has now been turned into an online course.  To find out more about this and how you can get it at 50% discount during this week only:round click here

 

Tessa Shepperson
Easy Law Training / Landlord Law



Comments

Claire Sandbrook

23:43 PM, 5th December 2016
About 2 years ago

I read Tessa's article and I would like to comment on the position of High Court Enforcement Officers which many landlords will be watching on the telly! I respect Tessa's views on the law but as the person who looked for and found the necessary way to navigate the Rules on how to use HCEOs in residential possession proceedings I am going to say I think HCEOs are quicker in most courts when it comes to enforcing a possession order. This is a good thing.

Infact the state of the courts in England and Wales on this point is frankly a disgrace and if you are a landlord left waiting for an eviction date for weeks on end then you should consider transferring to the High Court.

Landlords everywhere should include or arrange to seek permission to enforce using an HCEO in the claim stage of their proceedings. This is easily done and my team can help on how to do this - as we are lawyers as well as HCEOs.

There is a slight increase in cost - but it only takes average rents of 3-4 weeks to be lost in the county court system's delay before the Landlord is out of pocket. Instead HCEOs can move quickly once they have the necessary Order.

The change earlier this year just puts a check and balance in the system to ensure the transfer has been reviewed by a judge and notice has been served. That's a good thing.

And the bigger picture is the failure - the complete and utter failure - to get to grips with the economic fall out of delays in the county court system of enforcement. It is almost social welfare by the "back door". Some commentators have moaned about this as if HCEOs made a mistake. I disagree. They navigated the Rules and pushed the boundaries which has helped very many landlords to access justice much more quickly. It is as the enforcement system should be - balanced to meet the competing needs of both parties. We mustn't forget Landlords have rights too! You can reach me at c-sandbrook@shergroup.net if you want more information on how you can use the High Court system.


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