The year 2019 has kept housing lawyers busy and entertained not only with all the political upheaval in relation to Brexit but also with legislative changes and court decisions which will have an impact on the private rented sector in the upcoming year. This blog post gives a brief overview of some of the most important legal highlights for the private rented sector in 2019.
Right to Rent – Unlawful?
1 March 2019 – The year started off with a very important decision from the High Court concerning the Right to Rent. In Joint Council for Welfare of Immigrants, R (On the Application Of) v the Secretary of State for the Home Department  EWHC 452, the High Court ruled that the right to rent scheme was incompatible with Article 8 and Article 14 of the European Convention of Human Rights. The decision did not stop the scheme from operating in England but the extension of the scheme to Scotland, Wales and/or Northern Ireland was effectively prohibited until the scheme had been assessed properly.
The Right to Rent scheme was introduced by the Government in 2016 to make it difficult for individuals who were illegally in the UK to rent a home. The scheme required landlords to carry out identity checks on individuals before a Property was let to them. The High Court found that scheme encouraged landlords to commit nationality and/or race discrimination as checks on anyone who was not British inevitable would take longer to complete. Failure to carry out checks meant that landlords were at risk of enforcement proceedings against them. Additionally, if landlords discovered that a property had been let to disqualified persons under the scheme then reasonable steps were required to be taken to regain possession.
The scheme is currently operating as normal in England. The High Court’s decision in the case is subject to appeal by the Government and the appeal is due to be heard in January 2020.
Homes (Fitness for Human Habitation Act 2018)
On the 20 March 2019, The Homes (Fitness for Human Habitation Act 2018) came into force. This Act amended the Landlord and Tenant Act by introducing an implied term into a tenancy that the dwelling is fit for human habitation at the start of the tenancy and during the term of the tenancy. The Act applies to all tenancies of less than seven years both in the social and private rented sectors.
Client Money Protection (“CMP”) Scheme
On the 1 April 2019, the CMP scheme came into force requiring all agents holding client money to be part of an approved client money protection scheme. The definition of what constitutes client money is provided under section 54 and 55 of the Housing and Planning Act 2016. There is no grace period for joining a client money protection scheme.
The currently approved schemes are: Money Shield, Propertymark, RICS, Safeagent and UKALA client money protection. Agents are required to obtain and display their certificate of membership. Furthermore, agents are also required to hold a client money in a distinct bank account, but the schemes are offering a grace period until 1 April 2020 to comply with that requirement.
Agents who hold client money and are not part of a scheme are at risk of civil penalties imposed by local authority trading standards teams.
1 June 2019 – Tenant Fees Act / New Form 6A
On 1 June 2019 the Tenant Fees Act 2010 (“the Act”) came into force. The Act prohibits charging fees to tenants except those which are specifically permitted by the Act. The ban applies to new tenancy agreements from 1 June 2019, and existing assured shorthold tenancies, student accommodation and licences to occupy in the private rented sector in England from 1 June 2020
The prescribed form of section 21 notice known as Form 6A was updated to incorporate a reference to the Tenant Fees Act 2019.
Trecarrell House Limited v Rouncefield (B5/2019/0499)
On the 5 June 2019 the Court of Appeal granted the Claimant permission to appeal in this case, meaning that the Court of Appeal will consider and determine a hotly disputed issue about the validity of section 21 notices and gas safety certificates. In the County Court the landlord’s section 21 notice was found to be invalid due to the landlord’s failure to prove that a gas safety certificate had been provided to the tenant before they occupied the property. The appeal is due to be heard in January 2020 and the Court of Appeal will give a binding decision on whether past breaches prevent a landlord from giving a ‘no-fault’ section 21 notice.
Banning Orders on rise
Banning Orders were introduced under the Housing and Planning Act 2016, giving local authorities the power to make an application to the First-tier Tribunal to ban a property agent and/or landlord if they had been convicted of a “banning order offence”.
The power to apply for banning orders came into force in April 2018 and this year orders have started to be made. In August 2019, a banning order was made against Mr Robert Davies Beattie. Mr Beattie was banned for four years from letting housing in England, engaging in English letting agency or property management work or doing two or more of these things. A copy of the full tribunal decision can be found here
In November 2019, a further Banning Order was made against a Mr Rashid Almas. The Tribunal banned Mr Rashid Almas for a period of two years and 6 months from letting housing in England, engaging in English letting agency or property management work and being involved in any company that carries out these activities. A copy of the full decision can be accessed here
It is notable that in the decisions published so far, the tribunal is displaying an appetite to make banning orders. The power was introduced to ban the most serious offenders but landlords who have been given very low fines imposed by the magistrates for their banning order offences have still been banned.
25 October 2019 – Electrical Safety
On 25 October 2019, the Housing and Planning Act 2016 (Commencement No. 11) Regulations 2019 brought into force section 122 and 123 of the Housing and Planning Act 2016.
Section 122 of the Housing and Planning Act allows the Secretary of State to impose duties on private landlords by making regulations concerning electrical safety standards in residential premises. Bringing s122 into force was an indication of the Government’s intention to soon make these long-awaited regulations but no actual regulations have been made yet.