Landlord Law brings you all the latest housing news and more. Here are some highlights that have been in the news this week.

EPC ‘C’ targets could be offset by rent increases

42% of landlords intend to increase their rents to pay for the EPC costs to cover energy efficiency improvements in order to meet the EPC target of a ‘C’ rating by 2030, according to a new survey out by Foundation Home Loans.

There also appears to be alot of confusion and uncertainty of exactly how much the improvements are going to cost landlords who are not clear on how to upgrade their properties. 92% have some awareness that work will need to be done and 67% show a thorough understanding.

In order to to achieve the required EPC ratings 71% of landlords will use their savings, 42% intend to increase their rents, 28% hope to use government grants and funding and 55 are looking to increase their mortgage or loan.

Grant Hendry director are Foundation Home Loans said

 This research helps demonstrate growing awareness among landlords around this topic and highlights both the financial and planning considerations involved in meeting these requirements.

Plea to scrap 24hr notice period on inspections

The Chartered Institute of Environmental Health has written to the government asking for an amendment to the Renters Rights Bill to scrap the 24 hour notice period that councils currently have to give landlords before they can inspect their property. They claim that this is used by landlords as a loop hole to intimidate their tenants who have made the complaint about them.

Their statement states

At present environmental health officers must give 24 hours’ notice to landlords and tenants when inspecting property conditions under the Housing Health and Safety Rating System (HHSRS).

Local authorities should be able to conduct such visits without giving 24 hours’ notice, permitting private conversations with the tenant before the local authority contacts the landlord to notify them if works are required.

However Propertymark do not agree with this decision, and feel that whilst it is there to protect against rogue landlords, it is only ‘fair’ that property owners are present at inspections, even more so as they are the ones responsible for any works that may need to be done.

A spokesperson for Propertymark said

The problem we have at the moment is that legislation is being continuously written for the exception, the unusual case, not for your day-to-day landlords.

Renters ill prepared when trying to secure properties

News out this week reveals that when renters are looking to secure properties they are not organised enough and do not have all the necessary paperwork and deposit money ready, despite having to compete in a fiercely competitive market.

A tenant app called tlyfe claims that 30% of tenants were not able to move immediately, 32% did not have a deposit already saved up and 45% had no references lined up. The report claims that this is putting tenants at a severe disadvantage where rental properties are still having ten more tenants vying per property.

CEO Adam Pigott said

This failure to prepare will put you at a severe disadvantage and will often see you overlooked by lettings agents.

Renters are knowledgeable on location and budget but often seem to fall behind in the other important factors that are key to securing their next rental property.

Manchester Council brings in more enforcement officers

Greater Manchester council has trained up thirteen new housing enforcement officers to crack down on poor housing and bad landlords. They will be checking properties all over the region. This is all part of the UK’s first Good Landlord Charter.

Private renters can report any issues to them regarding bad housing and request a housing check, once that has been carried out they can call in enforcement if required.

Andy Burnham, the Mayor of Manchester said

We are taking action to drive up standards with our Good Landlord Charter, which will come into effect from May next year, and empower tenants with a right to a Property Check, followed up with enforcement action.

You can read more here.

Grenfell debate in the House of Lords

The House of Lords is due to debate a motion moved by Lord Khan of Burnley to take note of the Grenfell Tower Inquiry. Lord Khan is a parliamentary under-secretary of state at the Ministry for Housing, Communities and Local Government (MHCLG).

In preparation for this, a briefing note has been prepared which you will find on the Parliament website.

Snippets

Rent arrears soar by 22%
Gas boilers to be banned in new build homes
Councils to get more powers over landlords of empty properties
Landlord reveals nightmare cannabis factory saga
New EVEN longer eviction court delays ‘unacceptable’ says Shamplina

See also our Quick News Updates on Landlord Law

Newsround will be back again next week

The post Landlord Law Newsround #365 appeared first on The Landlord Law Blog.

As most readers will know, housing law in Wales was changed on 1 December 2022 when the Renting Homes (Wales) Act 2016 and various associated regulations came into force.

There is not a lot of case law yet on the details of the new rules, but on 8 November, a new judgement was published in the case of Coastal Housing Grup Ltd v. Mitchell & Anor.

Although there were a lot of parties in the case – Coastal Housing Group were not the only landlords involved.

The case is about the consequence of local housing associations’ failure to serve a copy of their electrical condition reports on their contract holders. Most of whom were existing tenants as at 1 December 2022.

The legislation

The problem comes with the Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022 which provide at regulation 6 that:

6 (1) The landlord must ensure that there is a valid electrical condition report in respect of the dwelling during each period of occupation.

And that a copy of this must be provided to contract holders before the occupation date, or if the report is prepared later, ‘before the end of the period of 14 days starting with the day on which the inspection was completed’.

The killer clause, though, is subsection 6, which says

(6) A dwelling is to be treated as unfit for human habitation at a time when the landlord is not in compliance with a requirement imposed by this regulation.

This is made worse by the supplementary term (“Term 2”), which many landlords will have included in their contracts (as it is part of the model contract):

2. You are not required to pay the rent in respect of any day or part day during which the dwelling is unfit for human habitation

So, for contracts which include Term 2 (and it can be removed as it is a supplementary clause, not a fundamental one) tenants don’t have to pay rent if the landlord has not given them the electrical condition report.

Note that most professionally drafted contracts will have deleted this clause, including (I am happy to say) the Landlord Law Welsh occupation contracts.

However, all of the housing associations in the Coastal Housing case had Term 2 in their contracts.

The problem: non-service of the electrical condition report

The problem faced by all the landlords in this case is that although their electrical condition reports were commissioned and obtained, they were never served on the contract holders.

So, although the properties were actually in good repair and fit for habitation, the court held that because of the legislation and Term 2:

• The properties were deemed to be unfit for human habitation, and
• The tenants were under no obligation to pay the rent.

So far as the date for service of the certificate where the contract is a converted one, the court found that because of the way the regulations are worded, the ‘occupation date’ for the purpose of serving the electrical condition reports, is the date the legislation came into force, i.e. 1 December 2022. Rather than 1 December 2023, which is the deemed occupation date in other respects.

This case is going to have a massive impact on the Welsh housing sector as (not surprisingly) those contract holders who paid their rent want to have their money back. Millions are at stake.

The contract holders have now counterclaimed to be repaid, and these counterclaims are due to be considered by the court sometime in 2025.

What about landlords whose occupation contracts exclude Term 2?

For example, landlords who use the Landlord Law contract and (I understand) the NRLA contract. And no doubt many other professionally drafted contracts.  In those cases, the rent will have been due. So, they are in a better position than the hapless landlords in the Coastal Housing case.

However, if the landlord fails to serve their Electrical Condition certificate by the proper date, then while the certificate is unserved, the property will be deemed to be unfit, and the contract holders can claim compensation.

Bearing in mind that the normal level of compensation for unfit properties is 100% of the rent, landlords whose tenants decide to bring a claim, will be no better off.

If you are a landlord of a property in Wales

If you have not served your electrical condition report on your contract holders yet – serve it now!

In fact, even if you have served it previously but did not retain proof of this, you should serve it again. Making it clear that it was served previously.

You should also take enormous care in future that your certificates are always served on your contract holders within 14 days.

Thoughts on the case

Many Welsh landlords will be outraged to learn that just by forgetting to give the tenants the certificate, their tenants will be able to live in their property rent-free until the certificate is provided.

It is a case of legislation stating that black is white. Reminiscent of Rishi Sunak’s attempt to provide through legislation that Rwanda is a safe country when the courts had previously found that it wasn’t.

Is legislation providing that dwellings are unfit for habitation in circumstances where they clearly are fit, any different? And is this really something that legislation can do?

There is also a human rights issue as the legislation is potentially unfairly interfering with a landlord’s property rights. Landlords can also claim that the legislation will ‘unjustly enrich’ the contract holders.

These issues were raised during the case but the Court decided that it was something best decided after the Counterclaims for rent have been heard.

Turning to social landlords generally, if they have to repay millions of pounds worth of rent to tenants simply because of a clerical error in failing to provide a document, this will cause them major financial problems.

It will mean that they may not be able to afford proper repair work. Some may even become insolvent.

Something the Welsh government may want to rectify, if they want to have a vibrant social housing sector.

And finally

This is yet another reason why landlords should NEVER use the Welsh government’s model contracts as drafted.  You will find another 17 reasons in this post.

The post Welsh landlords and a BIG problem with electrical condition reports appeared first on The Landlord Law Blog.