Amongst other reforms to assured shorthold tenancy (AST) law, the Deregulation Act 2015 (the Act) seeks to address the perceived problem of tenants living with serious health and safety risks arising from the condition of the property, fearful that they will be evicted if they complain. This is the fourth briefing in our series looking at the effect of the Act on landlords and tenants. Our first briefing was an overview of the Act, our second briefing focussed on changes to tenancy deposit protection, and our third briefing highlighted a relaxation of planning restrictions on short-term lettings.
ASTs, under the Housing Act 1988, were designed to be a very simple form of tenancy. Landlords and tenants have the freedom to agree the length of the tenancy and, to a large extent, the rent. If the tenant wants to leave at the end of the term, he can do so. If the landlord wants the property back, he can serve two months' notice under section 21 subject of course to any minimum term agreed at the outset.
This basic freedom for the landlord to get the property back for any reason (or for no reason at all) will soon be eroded, when sections 33 and 34 of the Act come into force in October 2015.
The perceived problem
Since the housing crisis developed following the 2008 recession, a perception grew that the ease with which AST tenants could be evicted was unfair. Former Liberal Democrat MP, Sarah Teather, raised a concern in Parliament that landlords with unsafe properties would sooner evict their complaining tenants and let the property to new tenants rather than fix the problem. With this, the concept of retaliatory or revenge eviction was born, and eventually found its way into the Deregulation Act at sections 33 and 34.
Sections 33 and 34 come into force on 1 October 2015 and apply only in England. At present they apply only to tenancies entered into after 1 October 2015 but from October 2018 they will apply to all assured shorthold tenancies, whenever they were entered into.
Section 33: preventing retaliatory eviction
In brief summary, section 33 works like this:
If a tenant makes a written complaint about the condition of the property to the landlord or the landlord's agent, a subsequent section 21 notice will be invalid if:
- the landlord does not give a response within 14 days indicating what steps he intends to take to address the complaint within a reasonable timescale, or serves a section 21 notice in response to the complaint, and
- the tenant makes a further complaint to the local authority about the same issue, the local authority serves an improvement or emergency remedial notice (a ‘hazard notice’ – our expression) under the Housing Act 2004.
- If a hazard notice is served but is then suspended, an earlier section 21 notice will not be invalidated. Hazard notices are designed to address health and safety issues such as damp and mould growth, excess cold, carbon monoxide poisoning, electrical hazards, fire risk, serious structural problems and so on.
Once the local authority has served a hazard notice, a landlord is only then able to serve a section 21 notice after six months from the date of service of the notice, or if suspended, after six months from the date the suspension ends.
This six month restriction does not apply if the hazard notice has been revoked, quashed or reversed under the provisions of the 2004 Act.
Section 34: further exemptions
The restrictions on serving a section 21 notice in section 33 do not apply where:
- the hazard is caused by the tenant's failure to use the property in a tenant-like manner;
- the property is ‘genuinely’ on the market for sale (i.e. sale on the open market and not for sale only to a related or associated person – see ss34(3) - (5) of the Act and s178 Housing Act 1996 for a full definition);
- the landlord is a private registered provider of social housing (otherwise known as a housing association); or
- a mortgagee requires possession in order to exercise a power of sale.
Importance of keeping address details up to date
If the tenant has not been given the landlord's postal or email address, or has made reasonable efforts to contact the landlord but was unable to do so, he need not make a written complaint.
Landlords will already be aware of their obligation to provide to their tenants their name, address and – if different - an address in England and Wales for the service of notices (ss47-48 Landlord and Tenant Act 1987) and this reinforces the need to ensure tenants know how to contact their landlord.
There is no official estimate of how big a problem retaliatory eviction really is. Shelter estimates that 200,000 tenants were evicted or had notice served on them during 2014 following a complaint about housing conditions, though this does not necessarily demonstrate a causal link. The Residential Landlords Association disputes this estimate, believing it is much lower.
Clearly, it is not acceptable for tenants to suffer with seriously unsafe conditions, too afraid to complain for fear of being evicted. But that is a symptom of the housing crisis; if there were not such a desperate shortage of local authority and private sector housing, tenants would not need to fear eviction.
The Act has the potential to penalise good landlords too, adding significant layers of complexity to what should be a straightforward process. For example, consider a landlord who needs to reclaim possession of his property because his circumstances have changed and he needs to occupy it himself. If his need for possession coincides with a complaint about the condition of the property, he may not be able to get the property back as quickly as he needs to. Another example could be a landlord who needs vacant possession to be able to carry out remedial work.
One can conceive of a situation where tenants serve a spurious notice of complaint as a matter of routine, even if there is no significant hazard. Landlords will not only have to investigate the alleged disrepair and serve a considered reply within a very short timeframe, but if the complaint is progressed to the local authority, the landlord will be in limbo pending the local authority’s decision. Such tactical use of section 33 will also put an enormous burden on already-strained local authority purse strings.