Changes to allow for more affordable housing and to improve the way in which rented properties are managed will become law by a new Act of parliament called the Housing and Planning Act 2016.
The various provisions of the Act will come into force at different dates, and the Secretary of State will need to make further regulations so that the provisions can be implemented.
The following changes affect residential properties in England only:
- Local Authorities will be able to apply for banning orders against ‘rouge’ landlords and lettings agents who have been convicted of a “banning offence“. The Secretary of State is to decide what constitutes a ‘banning offence’. Banning orders will be for a minimum period of 12 months and will prevent those landlords and agents from being able to carry out any further letting and management work. A breach of a banning order by a landlord or agent will be punishable by imprisonment or a fine of up to £30,000. Local Authorities will also have a database of persons convicted of a banning order offence.
- Local Authorities will have access to tenancy deposit information particularly when dealing with enforcement issues against a landlord or agent.
- The Secretary of State may make regulations imposing duties on private landlords to ensure that electrical safety standards are met in relation to rented properties.
- The Secretary of State may make regulations requiring property agents to be a member of a client money protection scheme. The purpose of this is to safeguard both landlord and tenant money in the event of misappropriation or theft by the agent, or where an agent goes into administration.
- Landlords will be able to recover possession of an abandoned property without the need for a Court Order provided that the relevant warning notices are served to end the assured shorthold tenancy. In order to proceed with the action there must be some rent arrears and no response by the tenant to the warning notices. In certain circumstances the tenant can apply to have the tenancy reinstated.
The Act also makes provision for:
- Starter Homes which is to be available to qualifying first-time buyers under the age of 40 years at a price of 20% less than the market value, as a minimum. There will also be a price cap and restrictions on sale in respect of qualifying properties.
- Additional tests for those who apply for a Licence for a House in Multiple Occupation, ‘HMO’ Licences.
- Financial penalties as an alternative to prosecution for certain offences e.g. in situations where there may be an unlicenced HMO.
- Tenants (including long leaseholders) to apply to the Court or tribunal for an order restricting the recovery of the landlord’s costs through an “administration” charge in the same way that Court and the tribunal already has the power to limit the landlord’s ability to recover its legal costs as a ‘service charge’.
- The Secretary of State to make regulations to change the formula applied to valuations in the context of lease extensions and enfranchisement.
If you are a landlord, tenant or agent and require any advice on the issues discussed in this article, then please contact us at firstname.lastname@example.org
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