Section 21: Yesterday’s Vote In Parliament

Imagine if a failure to carry out repairs meant that a landlord could not regain possession of their property at the end of a tenancy.

Last night’s vote in the House of Lords marked a large step in that direction.

Whether you manage your own properties or manage properties on behalf of a landlord this could affect you…

What Is Changing?

At present, unless a tenant is at fault their landlord has to follow a prescribed process to regain possession of their property.

This process involves serving a notice pursuant to section 21 of the Housing Act 1988 (s21 Notice).

What is proposed?

Yesterday the House of Lords approved a Government amendment to the Deregulation Bill that, in broad terms, means that a landlord will not be able to validly serve a s21 Notice to regain possession of their property if:

  1. their tenant has made a complaint about the condition of their property; and
  2. the landlord or their agent has not provided an adequate response within 14 days; and
  3. the local authority serves an improvement notice (Cat 1 or 2 Hazard) or an emergency remedial action notice.
The stated aim of the Coalition is to bring these changes into effect within this Parliament which ends on 30 March 2015.

What does this mean for you?

First, in order to benefit from protection from retaliatory eviction a tenant must submit their complaint about the condition of their property in writing unless they do not have their landlord’s (or the landlord’s appointed agent’s) email address or postal address.

Having a complaint in writing is of benefit to both the tenant and whoever manages their property as it provides a clear record of the exact complaint and the trigger point for providing an adequate response.  This means that it is in your interest as a property manager that your tenant knows how to contact you in writing.

Secondly, a landlord (or their agent) must provide an adequate response to a complaint within 14 days.  An adequate response is one which states the remedial action that will be taken and sets out a reasonable period for that remedial action.

This means that is it crucial that the tenant’s written complaint contains sufficient detail for the landlord (or their agent) to understand the issue in order be able to provide that adequate response.  Without the draft legislation having any obligation on a tenant to provide this level of detail, it is of increased importance for landlords and professional property managers to equip their tenants with the tools they need to provide them with this information.

What are the limitations?

In order to protect landlords from vexatious complaints a tenant a s21 notice will not be invalid if:

  1. the tenant failed to use the property in a tenant like manner; OR
  2. the disrepair is due to a breach of a tenant’s obligation in their tenancy agreement; OR
  3. a mortgagee is seeking recovery of a property under a mortgage that was in place before the tenancy commenced; OR
  4. when the s21 notice is served the property is genuinely on the market for sale.
In addition by using the local authority as the arbiter for the materiality of the disrepair landlords should be protected from being unable to regain possession for minor issues of disrepair.

What’s the upshot?

If, as is expected, the Bill becomes law any failure to deal with repairs properly could become a lot more expensive.

From a landlord’s perspective, unless your property is properly maintained you may not be able to re-let your rental property for six months from the date on which a local authority serves an improvement notice (Cat 1 or 2 Hazard) or an emergency remedial action notice.

From a letting agent’s perspective, the liability and reputational consequences of missing repairs have become far more serious.

The Fixflo 2014 Rental Repairs Survey (carried out before this amendment was proposed) highlighted that 56% of property managers knew a landlord who changed letting agency due to a repair related issue.

This number looks likely to rise unless letting agencies put in place robust processes for handling written repair requests.

There is also a high level of public awareness of retaliatory eviction with over 17,000 signatories in favour of a recent (but unsuccessful) Bill to prohibit retaliatory eviction and widespread press coverage.

This means that letting agency staff are likely to be asked about the changes by existing clients, prospective clients and tenants.

Common Parts

If passed, the Bill will affect block managers and estate managers too, as disrepair of common parts that a tenant can use and in which a landlord has a controlling interest can prevent a landlord from regaining possession of their property. This means that the relationship and information flow between letting agents and block managers will need to be robust in order to protect their mutual clients’ interests.

What Can You Do?

Don’t panic but do prepare.

If you manage your own properties or manage properties on behalf of landlords/freeholders you should review your repair management processes and we suggest the following checklist for letting agents and block managers:

Get prepared for written repair requests to become the norm.  Put a written repair reporting structure in place so your property management team does not have to wade through flowing prose to work out what has actually gone wrong.

From a business perspective it’s worth noting that TPOS and ARLA both already consider that it is best practice to have written communications with tenants.

Consider how written repair requests will affect your team if your tenant base speaks a range of languages. The Bill says that repair requests must be in writing but doesn’t say that they have to be in English.

For letting agents, if you manage flats but not the common parts make sure that your tenants know what would fall within their block manager’s responsibilities.

Make sure that you have processes in place to ensure that no repair is ever missed.  An audit trail of each repair request from start to end will help to show not only that you acted correctly but to evidence that you have done so.

Educate your team on the proposed changes.  With so much media coverage this is a chance for your negotiators and property managers to show industry expertise and to highlight the benefits of your fully managed service.

If you are a landlord who instructs a professional to manage your property click here to find an agent in your area that has invested in our guided multi-language repair reporting system.

We help thousands of tenants and hundreds of letting agencies across the UK to handle repairs more efficiently every month.

If you’d like to find out more about Fixflo please contact us today.

Alex Evans

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