The main point of this Act is that it gives tenants the right to sue their landlords if their property is in such poor condition, that it is ‘not fit for human habitation’.
In the past, tenants have only had the right to sue if the property was in ‘disrepair’ (under s.11 of the Landlord & Tenant Act 1985). However, if the property was not in ‘disrepair’ (ie if nothing was actually broken or damaged) but just in a very poor condition, then tenants had no right to do anything.
They were dependent on Local Authorities to take action, maybe after the Council had carried out a Housing Health and Safety Rating System (HHSRS) inspection to assess whether any of the 29 possible “hazards” (including many things, from Damp and Cold, to poor Security, Asbestos and Trip hazards) were present at the property.
However with the staffing shortages brought about by austerity, and for various other reasons, many Local Authorities were not in a position to do much, if anything.
Hence this new Act.
This seems a good time to reflect and consider the new Act and what it means for landlords, tenants and the rest of us.
Let’s take a look at private landlords first. We are assured that the Act cannot be used for trivial matters, so for most private landlords it should not be a problem.
Most decent landlords take care to ensure that their properties are in good condition. So, save for those with persistent damp and mould issues which are not down to disrepair, they should be unaffected.
Rogue or criminal landlords will also be unaffected as they don’t take any notice of the law anyway. They take care to operate under the radar with tenants who are not in a position to complain – as has been described by Ben in his series on the business models of criminal landlords.
Tenants will generally feel worried about taking hostile action against private landlords (any private landlords really) – at least while there is a housing shortage, as they risk eviction claims under section 21. Even if the Council pitches in and serves an improvement notice, this will only delay a section 21 notice by six months.
So most private tenants whose landlords are dragging their feet over repairs will be unwilling to risk it.
There is also the question of funding for any court proceedings. Few solicitors seem willing to offer no win no fee agreements to private tenants. No doubt due to the possibility that the tenants will be evicted under section 21 before the case comes to trial, or that if a judgment is obtained the landlord will have insufficient funds to satisfy it.
The one area where landlords may have cause to worry is where their tenants have long- term security of tenure. Such as assured (non-shorthold) tenants and protected tenants (Rent Act 1977).
If you are, say, a protected tenant and your landlord has refused to deal with (say) your persistent damp problem – now might be a good time to take legal advice.
The situation is different with social landlords, and this is probably where the main action is going to be.
Already there are many no win/ no fee claims being made against social landlords, driven often by claims companies sourcing suitable prospects (having discovered that personal injury no longer pays as well as it used to). Such disrepair litigation is particularly prevalent in much of the North of England, and elsewhere in the country.
However, there are many situations where tenants have not, in the past, been able to claim. If a property is dripping with damp and covered by mould but there is no actual ‘disrepair’ – then this has, in the past, not been actionable (save maybe through the trickier and less familiar Magistrates’ Court claims under the Environmental Protection Act 1990 – as in this case).
The Councils cannot undertake HHSRS inspections or enforcement on their own property, and rarely if ever do so on housing association property either. So tenants frequently had no remedy.
After tomorrow however it will be different. Unlike private landlords, solicitors are normally only too happy to act on a no win/ no fee basis against social landlords.
So this legislation is seriously bad news for social housing landlords.
Of course, nothing can excuse failing to keep properties in proper repair. However, I predict that there will now be a large number of claims which could put some social landlords in financial difficulties.
About solicitors and claims companies
No win/No fee (Conditional Fee Agreement, or CFA) solicitors are no doubt rubbing their hands with glee at the prospect of a new area of litigation opening up. It must be an exciting time to be a property litigator.
Solicitors are necessary, as these claims can be tricky and hard for tenants to deal with on their own.
However, the CFA solicitors currently driving disrepair claims against social landlords are not always friends of tenants. Often, their first instruction to the tenant is not to let the landlord in to do repairs, in an effort to drive up any damages claimed. Also, the No Win/No Fee does not always extend to protect a tenant who loses a case, and – even though they will not have to pay their own solicitors – they may well find themselves at the wrong end of a four- or 5-figure costs bill to cover their social landlord’s legal costs. Then even when a tenant wins such a case, solicitors sometimes claw back at least 50% of any damages won from the landlord.
So if you are a tenant and are contacted by a company offering you the chance of a No win/No fee agreement to claim compensation from your landlord – don’t sign up immediately. Do a bit of investigation and get some independent advice first. For example, speak to your local CAB as they may be able to recommend other firms who will offer you a better deal.
It is undoubtedly a good thing that rented properties must be “fit for human habitation”. This is entirely right and proper, although the definition of what actually “fit for human habitation” means to a court will take some time to emerge – not a lot of help is given in the Government’s guidance.
At least some tenants, principally those in social housing and in the more secure types of tenancies with private landlords, will now be able to take action to force their landlords to improve their shoddy homes.
This legislation is going to be tough for social landlords who will undoubtedly see the already epidemic-level of disrepair claims in the courts increasing still further. Hopefully, those tenants who are ‘trying it on’ with trivial issues will have their cases chucked out. But social landlords will still have to finance at least some (and in many cases all) of their defence costs which will result in less money available for repair work and building new much-needed homes.
As always the most serious offenders, the criminal landlords, will carry on regardless. Their tenants will be too scared to do anything. What is needed with criminal landlords is more enforcement not more legislation. Preferably by the Police who are (or should be) better equipped to deal with ‘proper’ criminals than Council housing officers.
So the new act has both plus points and minus points. On the whole, I think it should be a force for good. There is no justification for renting out property unfit for habitation.
Hopefully, this new act will send out a message and change attitudes in the industry. From now on ‘fit for human habitation’ should be the starting point for assessing the condition of all rented properties.
Thanks to Peter Marcus of Zenith Chambers for his help with this post.
Postscript – some of the comments in this article have been challenged in the comments so please read these also. You will find them below.