Lettings legislation

Amidst industry preoccupation with Brexit debate and ongoing uncertainty in the housing market, the government has passed new legislation to safeguard the standard of lettings properties.

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The Homes (Fitness for Human Habitation) Act, which will come into effect from this month.

A rare example of legislation drafted by the opposition to receive cross-party and government support, and a likely reaction to the Grenfell Tower disaster, the Act also responds to the 2016/17 English Housing Survey, which found that 27% of homes in the private rented sector failed to meet the Decent Home Standard in 2016.

What began as a private members’ bill by Karen Buck MP was also designed to modernise the otherwise outdated Landlord & Tenant Act 1985.

The evolution of this 34-year-old legislation will overhaul its existing ‘fitness for habitation test’, extend its obligations to most landlords, and clarify as to which leases must abide by these laws.

Such modernisation is long overdue for the lettings market.

Under the current act, a landlord is only required to keep a property ‘in repair’ and so a property in a state of disrepair at the start of the tenancy falls outside the mandate.

This leaves tenants vulnerable to the handful of rogue landlords out there and is the result of a legislative technicality that should have been addressed long before now.

Looking ahead, landlords must ensure that their properties are ‘fit for human habitation’ at the beginning and throughout a tenancy.

Regarding what technically constitutes as ‘fit’ or ‘unfit’ for human habitation, landlords should consider issues like damp, water supply, drainage, sanitary facilities, natural light and ventilation, among other possible criteria.

Both social and private landlords – or agents acting on their behalf – will also need to make sure that communal areas are fit for purpose.

As ever, extenuating circumstance apply, which might see some landlords exempt from the Act, for example if the ‘unfitness’ of a property was caused by tenants, or if the property is destroyed by an insured risk such as fire or flood.

Landlords are also not liable if requested changes break planning consents, or if – in a leasehold property – the freeholder refuses permission of such changes.

That said, it is blanket legislation, so landlords should assume that their properties are subject to its rulings.

For those who are unsure, we recommend consulting with appointed agents or seeking professional advice to confirm how the law applies to them.

From the 20th March, the act will apply to all new residential tenancies of less than seven years and all fixed terms that become periodic on or after this date.

Any tenancies that become periodic before this date, the act will apply from 20th March 2020.

It is thought that few landlords will be affected by these changes, and the industry has generally welcomed the tightening up of standards.

Regardless, a property deemed fit for human habitation is as much in the interest of the landlord as it is to the tenant.

However, tighter legislation requires greater diligence.

If tenants believe that the law has been breached, they may issue court proceedings against their landlord, potentially resulting in the landlord being forced to carry out improvement works and to pay compensation.

Therefore, as all landlords have a responsibility to ensure that a property meets the required standards, we advise that landlords consider all relevant properties prior to 20th March and make any changes necessary, and of course take into account the new stipulations when extending a property portfolio.

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