Laura Bushaway highlights a number of changes to be implemented by the Housing and Planning Act 2016 in relation to landlords/property managers of residential properties in England. The Act was approved by Parliament on 12 May 2016.
Below are some key provisions of the Act. These are not currently in force:-
Limitation of administration charges
The Act empowers Courts, the First-Tier Tribunal (Property Chamber) and the Upper Tribunal (Lands Chamber) to restrict a landlord’s ability to recover costs even if there is a provision in the lease/tenancy agreement permitting a landlord to recover all costs from the tenant. Tenants may now challenge the reasonableness of the costs which a landlord seeks to recover from the tenant under the lease in connection with legal proceedings as an administration charge.
Right for landlords to provide contact information for leaseholders to the secretary of a tenants’ association
The Act introduces a new duty for a landlord to provide the secretary of a residents’ association with information about leaseholders in order that the residents’ association can contact other or absentee leaseholders. The regulations have not yet been published but these duties are due to be effective from 12 July 2016.
Rogue landlords and letting agents
The Act enables local housing authorities to apply to the First-Tier Tribunal (Property Chamber) for banning orders against rogue landlords or letting agents which once made prevent a person from letting or managing properties in England. A banning order will be made for at least 12 months and also prevents the person who is subject to the banning order from transferring property to associated parties to be managed/let on their behalf. There are serious sanctions for non-compliance with a banning order including imprisonment and/or a fine. The Act also provides for the creation of a database of rogue landlords/property agents. The effectiveness of these provisions remains to be seen as the detail of the mechanism has not yet been drafted and the scheme is onerous upon local housing authorities in a period of austerity.
Recovering abandoned premises
Currently, if a tenant has abandoned a residential property which has been let by a landlord, it is necessary for a landlord to issue proceedings for a possession order in the County Court and for that possession order to be enforced by a bailiff. However, the Act contains a procedure for a landlord to recover possession of a property which it believes has been abandoned without the time and expense of Court proceedings. Again, the detailed regulations behind these provisions is yet to be outlined but in broad terms, if there is outstanding rent and the landlord has served a series of warning notices in accordance with the Act to which the tenant/named occupier have not responded, then the landlord can bring the tenancy to an end without a court order for possession. However, the tenant has the right to apply to the court to be reinstated within 6 months of the end of the tenancy if they had a good reason for failing to respond to the warning notices. Whilst this procedure may potentially be quicker and cheaper than possession proceedings in the county court, the right of the tenant to apply for re-instatement provides some uncertainty for landlords and court proceedings may remain the best option.
Electrical safety standards
More rigorous electrical safety standards will apply to landlords letting residential premises in England. Sanctions for failure to comply will include the payment of a financial penalty by landlords or a power for local housing authorities to arrange for a contractor to attend the property and remedy any failure to comply by the landlord at the landlord’s cost. However, the detail of these provisions has not yet been drafted.