Positive new measures in the Housing and Planning Act 2016

The Housing and Planning Act 2016 has now passed into law, and while it needs secondary legislation to implement its various measures, it is good to be aware of what it is likely to bring. Whilst it is not due to come into force until April next year, other measures may be added in the interim to enable legislation, so it is advisable to be aware of changes as they develop.

Below is a summary of some of the Act’s measures and my thoughts on how these will impact the industry.

Electrical safety standards

Landlords are likely to find they will have to adopt positive measures to ensure electrical safety during a tenancy, possibly by way of annual checks. New safety standards are likely to apply not only to the electrical system in the property but also to electrical fixtures and appliances supplied by the landlord.

It is expected that to satisfy the requirement, an electrician will be required to make an inspection, and while it is uncertain as to whether or not a copy of the certificate will need to be supplied to the tenant, it would seem to be good practice to do so, especially with the changes to Section 21 rules on notices for possession and the possible ability to avoid them by the tenant requesting repairs.

The law is likely to be backed up by penalties, possibly financial, and as these are safety issues local authorities could be given the power, with the tenant’s consent, to enter the premises and rectify any failures.

I am fully in favour of improvements to the electrical safety standards guidelines, as the current legislation requires a landlord to ensure the electrics are safe, but there are no physical guidelines to show how to go about this and what can be used as evidence to demonstrate this has been done.

Banning orders

Both landlords and letting agents could be made subject to banning orders under Part 2 of the Act, made by the First Tier Tribunal (FTT) on the application by a local authority. Those subject to an order would not be able to undertake letting agency or property management work or let houses, although it is unclear at present exactly what transgressions would lead to an order.

Orders will endure for at least 12 months and, if the ban is breached, there are some serious penalties enshrined in the new law. Summary conviction could bring a ban of no more than 51 weeks and / or a fine not exceeding £30,000 with a banned person not permitted to hold an HMO licence. This would clearly have serious implications for both our clients and ourselves and should at all costs be avoided.

Rent repayment

The FTT will also have the power to make rent repayment orders where a landlord has received rent from a tenant or local authority through universal credit.

It is likely the FTT will make an order if a landlord has:
1.    Failed to comply with an improvement or prohibition order or
2.    Evicted or harassed a tenant or
3.    Has control or management of an unlicensed HMO or house or
4.    Has breached a banning order.

Either tenants or local authorities can apply for an order but the making of an order can only be made if it is beyond reasonable doubt that the landlord has committed the offence. The amount to be repaid is limited and cannot exceed the rent paid by the tenant over a 12-month period during which the offence was being committed by the landlord.

Whilst this could be positive news for tenants in properties that are not being properly maintained by their landlords, I am concerned that it could be abused by some tenants who could attempt to claim back rental payments when a landlord has in fact been fair and maintained their property well.  I imagine that as a result of this new order written correspondence between landlords, tenants and agents and detailed records will become even more important for dealing with potential claims in the future.

Database of rogue landlords and property agents

The Act will establish a database of ‘rogue’ landlords and property agents, which will be operated by the Secretary of State but updated by local authorities.

The information held will include:
(a)        the person’s address or other contact details;
(b)        the period for which the entry is to be maintained;
(c)        details of properties owned, let or managed by the person;
(d)        details of any banning order offences of which the person has been convicted;
(e)        details of any banning orders made against the person, whether or not still in force;
(f)        details of financial penalties that the person has received.

This information will be disclosed on application in redacted form and local authorities will have access to the database. This is an important move for the industry in which ‘rogue’ landlords and agents can tarnish the reputation and perception of the vast majority who operate reputably. This will certainly help to crack down on repeat offenders and hopefully weed out such individuals.

Overall, the new measures proposed in the Act are welcome changes for the industry that should improve efficiency and transparency in the residential lettings process. Whilst, as with any change to legislation, there will be new risks and potential loop holes created, these measures look to further protect tenants and landlords alike and also provide further support for agents.

The full details of the Housing and Planning Act can be viewed here.

Lisa Simon, 

Partner Head of Residential Lettings

T: 020 7518 3234 

E: lisa.simon@carterjonas.co.uk