The Deregulation Act 2015 – a step in the right direction?

The Deregulation Act (“the Act”) became law on 26th March 2016 and introduced several changes as to how Landlords, and their agents, are able to secure possession of their property. The changes apply to any new Assured Shorthold Tenancy (“AST”) beginning on or after 1st October 2015, with it applying to all other pre-existing tenancies from 1st October 2018. The position before the Act, compared with the current position, is discussed below.

Pre-Deregulation Act

For any tenancy beginning on or after 6th April 2007 the Landlord was required to place any deposit paid into one of the government authorised schemes within 30 days of receipt. In addition, the Landlord had to provide the relevant prescribed information to the tenant within the same time frame. The deposit had to remain protected where the AST became a Statutory Periodic Tenancy (“SPT”), as well as needing to send the relevant prescribed information to the tenant.

A common trend with such cases was retaliatory evictions, whereby the Landlord would seek to evict the tenant when they raised a legitimate grievance relating to actionable disrepair, for example a leak or mould in the property. Landlords had sought to circumvent their repairing obligations pursuant to the tenancy agreement or as implied under Section 11 Housing Act 1985 by seeking to evict a tenant before having to carrying out any remedial works, as once the tenant was evicted, the landlord’s duty to complete the repairs would cease.

Current position

For any Assured Shorthold Tenancy granted on or after the 1st October 2015 the Landlord is now required to provide the tenant with a government leaflet entitled ‘How to Rent’, an Emergency Performance Certificate and a current Gas Safety Certificate.

As with the previous position, the Landlord is required to place any deposit paid into one of the government authorised schemes within 30 days of receipt. In addition, the Landlord must provide the relevant prescribed information to the tenant within the same time frame. However, while the deposit needs to remain protected for any subsequent tenancies (whether AST or SPT), the relevant prescribed information does not need to be sent again if it had been provided during the 30 days of the original tenancy, which was a requirement under the previous scheme.

In addition, a Landlord must make sure they provide their tenant(s) with an up to date Gas Safety Certificate and Energy Performance Certificate. If the Landlord does not provide these documents they will be unable to serve a valid section 21 notice.

Section 33 of the Act seeks to afford tenants protection against retaliatory evictions. This is achieved by requiring the Landlord to take a positive step before being able to issue a section 21 notice. In order to activate this protection a tenant is required to put any complaint of disrepair in writing to the Landlord. The Landlord is then required to issue the tenant with an adequate response in writing. An adequate response is to include a description of the action the Landlord will take and set out a reasonable timescale in which to take that action.

In the event the Landlord does not provide an adequate response, or take the required action within the given timescale, the tenant is then required to have the Local Authority inspect the property and in turn issue the Landlord with an improvement notice or a notice of emergency remedial action. Providing this takes place the Landlord is unable to rely on a section 21 eviction for a period of 6 months.

Whilst, on the face of it, this appears to be provide protection to tenants, the crucial element is the Local Council’s Environmental Health Officer serving a notice on the Landlord. This needs to be done within the section 21 notice period (usually two months) and before a possession order is made (maybe a further month). If the Local Council do not provide a notice within this period of time then the Landlord will still be able to obtain possession, even though the tenant has complained in writing.

The result of this is that tenants are placed under a great deal of pressure in that they have to chase both their Landlord and the Local Council in relation to the repairs. This leaves an unsatisfactory position where only some tenants may be lucky enough to have the Council serve a Notice on the landlord within the required time frame, thereby rendering section 21 notice invalid.

Even in cases with serious disrepair, the tenant is left to the mercy of the local authorities taking action in time even if the tenant themselves has pursued the matter proactively. Local authority environmental health departments are commonly known for their rather lenient approach to pursuing landlords and the tenant often has to pursue the local authority relentlessly even to facilitate an inspection let alone the service of an improvement notice.

Conclusion

While the additional protection for tenants from the Act is encouraging, it is not clear how effective it will be in the future in staving off retaliatory evictions, as the Landlord can still obtain possession due to the length of time it takes for the Council’s Environmental Health to serve an enforcement notice. It could be described as a small step as opposed to a large stride in the right direction.

What is also of concern is that Fixflo, a property management firm, having carried out a survey of over 300 letting agents found that around 10% knew little of the changes brought in by the Act. It could be argued that if Landlords are instructing the said 10%, they themselves may also be oblivious to the changes.

Another important issue the report highlights is that repairs within London cost on average 300% more than outside the capital, as this will be a significant consideration for the landlord, as it will often be more cost-effective to evict the tenant and replace them than to actually carry out the repairs.