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Landlords & Tenants Update - New Goverment Proposals

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With a lot of changes in the landlord and tenant industry and the Government announcing new measures, here is a summary of the key changes about which landlords ought to be aware.

New Government Proposal

The more radical proposals see the Government trying to tackle illegal immigration through landlord and tenant legislation. The proposals aim to see that it is more difficult for anyone without the right to live in Britain to rent a home and evicting illegal immigrants is easier. When a person’s right to live in the UK comes to an end, landlords will be afforded the right to end a tenancy, sometimes without a court order. This will be triggered by a notice from the Home Office stating that the individual concerned no longer has the right to rent in the UK.

Whilst these measures focus on immigration, the Government has also indicated that these measures aim to crack down on ‘rogue landlords’ who take advantage of the immigration system and exploit the most vulnerable. Whilst this has to be a very small minority, this does shift the focus slightly. It means that landlords will be under an obligation to undertake checks as to the immigration status of tenants and occupiers i.e. lodgers before offering a tenancy or other occupation. Whilst these proposals are not yet in force, they have been piloted in areas of the country and it is likely that these changes will come quickly in the Autumn.

The proposal is that it will be a criminal offence for landlords to fail to undertake those checks, with sanctions including a fine and up to 5 years imprisonment.

For more information on this and other proposals please visit the Government website

At present these are just statements of intent and not law. Please look out for further updates as to when these measures actually come into force.

Deregulation Act

This is set to come into force in October and sees changes to the section 21 possession procedure, including the use of new prescribed forms and notice requirements. It is expected that preliminary requirements will also be introduced before a landlord can embark upon the section 21 notice procedure. For example, landlords may be required to produce evidence that they have complied with laws relating to smoke detectors and giving tenants copies of the Government’s How To Rent Guide.

Case Law Update: Deposit Protection

Khuja v Chowdhury

The case concerned a claim for possession under section 21 of the Housing Act 2004. The claim was initially dismissed because the landlord had not served the prescribed information. A second claim was then issued and the tenant raised a defence that the deposit had been protected late. The tenant also counterclaimed for the compensation penalty for non-protection of the deposit (s214 of the Housing Act 2004). The Court considered both issues together.
The Court found that the deposit had not been protected adequately and, despite the landlord offering to pay it back, he had not. What we can take from this, however, is that actually returning the deposit where the protection requirements have not been complied with, may avoid this kind of defence. In addition, if a defendant ‘unreasonably refuses’ to accept the money in order to avoid possession proceedings, this may prevent him/her from being able to rely on this kind of defence.

The tenant also made a counterclaim for between 1 and 3 times the deposit as per s214 of the Housing Act 2004. The decision in that case suggests that this will be assessed as follows:

  • The tenant will be awarded 1x the deposit sum in situations where the landlord was not at fault and the time limit for complying with deposit protection requirements has only been missed by a small amount of time.
  • The tenant will be awarded 3x the deposit sum if there has been a blatant disregard for the rules, and the deposit has been dissipated in some way.
  • In all other cases, where the landlord ‘ought to have known’ that the deposit needed to be protected, an award of 2x the deposit sum is likely.

Note also that if the landlord protects the deposit late but within the initial fixed term, he may be saved by the Deregulation Act when that comes into force.

For more information contact Helen Lyne in our Commercial Disputes Team who specialises in Landlord and Tenant Law on 01740 646029 or hlyne@tbilaw.co.uk

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