Landlord Law Newsround #202

Our Newsround stories for you this week.

Extension of Tenants’ Protection from Eviction in Wales

This week saw the enforcement of the extended notice periods within Wales which was due to end on 30 June 2021 but which will now be in place until 30 September 2021.

However, the stay on the execution of warrants has been ended and possession proceedings can now begin.

The current Welsh law  on notice periods as of 08.07.2021 is as follows:

• There is a six month notice period on all section 21 and section 8 notices, except in the cases of domestic abuse or anti-social behaviour.
• The so-called ‘eviction ban’ whereby bailiffs could not remove people from their homes ended on 30 June 2021

The reason for the extension by the Welsh government was that the longer period will allow local authorities time to deal with the likely sudden rise of possession proceedings and potential homelessness that will occur at the end of this extended notice period.

It could be argued, however, that this is a mere delay of the predicted ‘eviction wave’ at the end of the pandemic. In addition, while this gives tenants security of tenure in properties for a few more months, it does not help landlords with tenants in significant rent arrears or other problems.

Landlords with tenants with rent arrears should take note of the recently established Welsh hardship fund which offers grants for tenants in rent arrears. Information can be found here

NRLA – the PRS sector is under-enforced rather than under-regulated

The National Residential Landlord Association (NRLA( has released a publication this week investigating the rise in legislation and regulation inside the private rented sector in the past decade and what effect that has had on the sector.

By the time the Building Safety bill is given Royal Assent, the number of statutory provisions will have risen by 40% in the past decade.

Many landlords are struggling with this and feeling the increasing legislative load difficult to manage effectively.

The legislative load brings with it added expenses for the landlord, for example, the Minimum Energy Efficiency Standard Regulations has forced many landlords to make significant changes to their property to achieve the minimum EPC rating of E – which by 2025 will likely change to a minimum rating of C.

The cost of these upgrades come straight out of landlords income, reducing their profits.

In 2018/19, the report found that 89% of local authorities reported issuing no civil penalties, while others didn’t have a civil penalty policy. However, different local authorities were more hostile with landlords who didn’t follow the regulations. This ‘post-code lottery of enforcement’ between local authorities is also an issue that needs to be resolved.

The NRLA believes that these recommendations to the private rented sector will deal with the problem of both the lottery of enforcement as well as the long list of regulations that landlords must deal with.

• Improving local authority enforcement rather than the scope of enforcement. Local authorities already have powers to enforce regulations but are just not using them effectively.
• Updating older legislation with more modern approaches. The Housing Act 1988 is still one of the driving pieces of legislation for the private rented sector and it is over thirty years old. Wales has implemented two housing acts (albeit one is not yet in force) in the past eight years which will revolutionise their housing system, something that England should consider.

The full report can be found here

Increased tax and regulation blamed for rent increases

The letting agent advisory company Homelet & Let Alliance CEO has argued that increased taxation and over-regulation is the reason that the average rent has now reached £1,000 in the UK.

The CEO of the company, Andy Halstead,  has argued that landlords have been ‘penalised with higher taxes and increasing complexity in obtaining possession of their property’ which has caused a knock-on effect of the increased rent price in the UK. The fact that there is an over-regulation of the industry, such as the increasing prices of licensing has caused a trickledown effect increasing the rent on tenants, going on to say

The sector works best when there’s a mutual balance between tenants, landlords and letting agents. The government can’t treat the rental market as an afterthought. Policies that solely focuses on homeownership will only deepen the issues in the UK’s housing market.

“Some people might be shocked to see the average UK rental price tip over the £1000 mark, yet supply and demand dynamics will only continue to drive rental prices upwards for the rest of the year, and we’ll see more records broken in 2021.

Homelet’s figures show that the average rent within the UK at around £1,007 per calendar month, which is up 5.9% from the figure last year. London has seen it’s first increase since the start of the pandemic, although the figure is stiller lower than pre covid times at £1,607 per month.

Full article can be found here

Northwood Solihull Ltd v Fearn to be appealed

The court case of Northwood Solihull ltd v Fearn has now been given leave to appeal. This is a case from 2019 which has potentially a significant effect on landlords and letting agents who trade through a limited company.

While the facts of the case can be found here, the importance of the case is this: prescribed information before the enacting of the Deregulation Act 2015 came into effect, must comply with section 44 of the Companies Act 2006.

Section 44 provides that signing documents must be done by two company directors, or a director and a secretary, or a director and witness.

If prescribed information hasn’t been done correctly, then this may leave landlords and letting agents open to fines and penalties There may also be wider effects of the case, but the court has been unclear on this.

Landlord law, with solicitor David Smith, has created a purchasable clause that should protect you from this problem going forward (under the law as it stands at the moment). While this does not guarantee protection, we see no reason why this would not be accepted by the court. The sales page for this clause can be found here

Snippets:

• Article on Police bill risks criminalising homeless people
• People in receipt of Universal Credit renting in properties via ‘rent-to-rent’ arrangements face being asked to repay back-dated housing payments due to a change in DWP policy.
• Welsh Government to clamp down on second home & holiday let properties
• John Lewis plans to build 10,000 rental homes on its land
• Tribunal backs landlords over contested Rent Repayment Order claim