Housing and Planning Act – What happens next? …
The Government’s Housing and Planning Bill finally received Royal Assent last month after a prolonged period of Parliamentary ping pong. So what happens next?
The Act applies to landlords in England. The sections affecting private renting survived largely unchanged, with the addition of two enabling amendments that will allow the introduction of electrical safety standards and checks, and a requirement to agents to hold client money protection.
The new Act includes six measures designed to tackle rogue landlords and property agents:
- Banning orders for most prolific offenders
- Database of rogue landlords/property agents
- Civil penalties of up to £30,000
- Extension of Rent Repayment Orders
- Tougher Fit and Proper Person test for landlords
- Tenancy Deposit Protection Scheme data sharing.
It also includes a new mechanism allowing landlords to legally recover abandoned properties without needing to go to court. So what happens next?
Banning Orders and ‘Rogues’ Database
The Government has promised an autumn consultation on what offences could result in a banning order, with draft regulations published in early 2017 and the measures coming in to force in October 2017.
The database of rogue landlords and agents will be held by DCLG and updated by local authorities. Currently, only local authorities are proposed to have access to the register.
The RLA has raised concerns that the reputation of membership bodies for landlords and agents could be undermined if they are not be able to check if new or existing members are on the register. Again, regulations are required to establish what information will be held on the register, with implementation expected in October 2017.
Civil Penalties, Rent Repayment Orders and Fit and Proper Person Test
The Government expects to publish guidance on these aspects of the Act in March 2017, with the measures taking force in April 2017.
Sharing Tenancy Deposit Scheme Data
Local authorities will be able to request data from tenancy deposit protection schemes to help identify private rented property and landlords, take action against rogue landlords and enforce housing standards.
Electrical Safety and Client Money Protection
The Secretary of State can now bring forward proposals to ensure property agents (i.e. letting and managing agents) that hold client money, such as rent or service charges, belong to a client money protection scheme; and require that rented properties in the PRS meet acceptable electric safety standards. DCLG will consult on details of these proposals before regulations are published.
The Act includes a new statutory code enabling landlord to recover property if the assured short-hold tenant has abandoned it, without the need to serve a section 21 notice or obtain a possession order.
- Tenant must owe more than two months’ consecutive rent and must, of course, have left the property.
- Landlord must give at least three warning notices on the tenant and two of those must be sent to the tenant and others too, including a deposit payer.
- The first notice can only be served if the rent is at least one month in arrears and the second notice must be served between two and four weeks after that notice, but the arrears must by then be two months.
- The third notice must be affixed to the property like the front door- at least 5 days before the landlord repossesses.
- Landlord must give at least eight weeks for the tenant to respond to the notices.
- Only if none of these notices are responded to saying the property is not abandoned and/ or no rent at all is paid can the landlord repossess the property.
Extension of Mandatory HMO Licensing
Last year the Government consulted on proposals to extend the scope of mandatory licensing of HMOs. Ministers are still considering their response, but changes to include two storey buildings, flats above shops seem likely, as well as reducing the people/households threshold. Minimum room sizes may also be stipulated. Any changes are expected to be implemented in October 2017.
The Association of Independent Inventory Clerks (AIIC) recently spoke out about the need for a rogue tenants list to be included in The Housing and Planning Bill too. Worried about the issue of problem tenants and how this can be addressed, the chair of the AIIC said:
“We’re well aware that there are criminal landlords and letting agents out there and blacklisting them and banning them from letting property really is a necessary step.”
“That said, the measures in the Housing Bill are very one-sided and suggest that it is only landlords and agents that cause problems during tenancies. We know from experience that this is not true and I personally have come across many horror stories in my time where tenants have trashed a landlord’s property or refused to pay rent for long periods of time.
“It would only be fair if troublesome tenants who repeatedly offend could be blacklisted in the same way as landlords or agents. The threat of being blacklisted or a fine would hopefully discourage a minority of tenants from misbehaving and help to improve the relationships between landlords, agents and tenants.”
At Tenant Referencing UK this is exactly what we have been doing for the past 7 years.