Most of you should be aware that on 20 March last year, 2019, a new act, the Homes (Fitness for Human Habitation) Act 2018 came into force. I wrote about this previously here.
At that time the new act applied to all new tenancies, with a term of fewer than seven years, which started on or after 20 March 2019, in England. The act provided that landlords must ensure that properties are ‘fit for human habitation’ both at the start and during the term of the tenancy.
In most cases this should not have been much of a problem as most private landlords (other than the ‘rogue’ and criminal element) will ensure that their properties are in good or at least reasonable condition when let.
So they will be unaffected by the new act which only applies to serious issues.
The end of the transition period
However, on 20 March 2020, the ‘transition period’ of this legislation will end and it will come into force for all existing periodic tenancies.
This means all tenancies where the fixed term has ended and where the tenancy is continuing under a ‘periodic tenancy’.
Which will include long-standing tenancies where the tenants have strong security of tenure. such as assured tenancies and protected tenancies.
What are protected tenancies?
Protected tenancies are those which started before 15 January 1989.
Tenants will usually pay a ‘fair rent’ which is set by Rent Offices. As increases in rent are limited by statute (the Rent Acts (Maximum Fair Rent) Order 1999) most rents for protected tenancies is quite low.
The only circumstances under which the rent can be increased to a market level (or at any rate closer to a market rent) is if substantial improvements are carried out to the property.
For this reason, many protected tenants will object to improvements being done. Most protected tenants are elderly retired people on fixed incomes who would not be able to afford the increased rent that would follow from improvement works.
Protected tenants also have long term security of tenure and in most cases are impossible to evict, unless they are in arrears of rent. Although even then the Court has more flexibility to allow them time to pay than they do under the eviction rules which apply to assured and assured shorthold tenancies.
Protected tenants and the Unfitness Legislation
The new legislation on fitness for habitation will, from 20 March, apply to these older tenancies. Allowing tenants to apply to Court for compensation if they are able to show that their properties are ‘unfit for human habitation’.
Which will include showing that the property falls foul of any of the 29 prescribed ‘hazards’ under the Housing Health and Safety Rating System (HHSRS).
I suspect that many of these older properties will fall foul of the standards.
However, tenants cannot have it both ways. They cannot claim compensation for unfitness if this is largely due to their refusal to allow properties to be upgraded in order to keep their rent at the lower level.
So protected tenants will need to think very carefully before bringing claims under this new legislation.
Landlords and protected tenants
As from 20 March, all protected tenants (and indeed all long-standing tenants under periodic tenancies) will be able to claim under the new legislation, landlords need to take steps to protect their position.
I would advise that all properties are inspected before 20 March. If the property has issues which could be considered a serious hazard under the HHSRS, then you should take steps to deal with it before the deadline, or shortly afterwards.
However, you should also let tenants know that doing improvement work will allow you to increase the rent to market levels (or closer to). If they don’t want this, then if they refuse to allow you access the works cannot be done and their rent levels will remain unchanged (other than the modest bi-annual increases allowed under the legislation).
In which case you will need to have something in writing from them confirming that they do not wish the improvement works to be done and that they will not allow access for it.
This will protect you from claims for compensation under the act.
If tenants will accept a higher rent as the price for improvement …
However, if the tenants are prepared for their rent to rise if their property is improved, then I am afraid you will have to arrange to get any necessary works done – and it may be expensive.
However, if the property is not brought up to a proper condition your tenants will be able to claim against you for compensation which will make your total liability considerably higher.
In the past, landlords have only been liable for disrepair. From 20 March 2020, you will become liable under the new legislation for ‘fitness for habitation’ in respect of all periodic tenancies including those which have been around for many years (as well as for new tenancies created after 19 March 2019).
You need to inspect all your properties held under periodic tenancies before that date to
- Find out if works will need to be done to bring your property up to a proper condition, and
- Whether your tenants will be willing to allow this, bearing in mind that it is likely to result in an increase in their rent
If tenants are not willing to allow access, you must get this in writing from them to protect you from any claims they may make in the future.
Otherwise, you should put in hand the necessary works to bring the property up to standard.