Give and take

Two recent acts – the Anti-social Behaviour, Crime and Policing Act 2014 (ABCPA 2014) and the Deregulation Act 2015 (DA 2015) – have introduced a number of changes relating to possession claims by landlords, and the protections afforded to tenants. The provisions of each act are outlined below.

Possession of secure and assured tenancies

The ABCPA 2014 introduced a number of new and amended statutory grounds for possession of secure and assured tenancies, which came into force in May and October 2014. The act covers both England and Wales. Guidance has been produced by the Home Office, entitled ‘Anti-social Behaviour, Crime and Policy Act 2014: Reform of anti-social behaviour powers statutory guidance for frontline professionals’ (July 2014).

‘Absolute’ ground

The ABCPA 2014 introduced a new ‘absolute’ ground into both the Housing Act 1985 (HA 1985) for secure tenancies (by means of the new section 84A) and the Housing Act 1988 (HA 1988) for assured and assured shorthold tenancies (by means of new mandatory ground 7A in part 1 of schedule 2). The provisions came into force in England on 20 October 2014, and in Wales on 21 October 2014.

The Home Office guidance characterises the ground as applying in circumstances where anti-social behaviour or criminality has already been proven by another court.

The new ground is ‘absolute’, as it provides that the court must make an order for possession if the landlord has fulfilled the notice requirements, followed any review procedures, and has met any one of five specific conditions. The conditions include where the tenant, or a person residing in or visiting the property: has been convicted of a serious offence; has breached a provision of an injunction under section 1 of the ABCPA 2014 (other than a provision requiring a person to participate in a particular activity); has breached a criminal behaviour order; has breached a court order or notice in relation to a statutory nuisance, or where the property has been subject to a closure order and access to it has been prohibited for 48 hours or more.

What constitutes a serious offence is specified in the new schedule 2A to the HA 1985.

The conditions are not met if there is an appeal against the conviction, finding or order concerned which has not been finally determined, or has been abandoned or withdrawn, or the conviction, finding or order has been overturned on appeal.

Notice requirements

In common with other grounds for possession under the HA 1985 and HA 1988, there are statutory notice requirements. In the HA 1985, the new section 83ZA sets out the requirements in relation to proceedings for the new absolute ground.

This section also applies where possession is also sought on one more of the other grounds set out in schedule 2 to the HA 1985. The corresponding provisions (where they exist) in the HA 1988 can be found in the amended section 8.

There are also time limits within which the notice must be served. The date that time starts to run depends on the condition being relied on, and whether there is an appeal against the subject matter of the condition.

Review procedures

Statutory review procedures are available for secure tenants only, and are found in section 85ZA of the HA 1985 (whether their landlord is a local housing authority or a housing action trust). They are based on the existing procedures for ending introductory tenancies in sections 127-129 of the Housing Act 1996.

The procedures for review are set out in the Absolute Ground for Possession for Anti-social Behaviour (Review Procedure) (England) Regulations 2014, which came into force on 20 October 2014, and the Secure Tenancies (Absolute Ground for Possession for Anti-social Behaviour) (Review Procedure) (Wales) Regulations 2014, which came into force on 12 January 2015.

While assured tenants faced with a notice seeking possession on the new absolute ground have no statutory right to review, the Home Office guidance states that it would expect housing associations to offer a similar non-statutory review procedure.

Defences

If the claim does proceed, and the relevant review procedures and notice requirements are complied with, and statutory conditions are met, section 84A(1) of the HA 1985 specifically provides that the court must also consider any available defence based on the tenant’s rights under the European Convention on Human Rights, within the meaning of the Human Rights Act 1998. In the HA 1988, this defence is found in the amended section 7(3).

In addition, defences are available when existing mandatory grounds should also apply, such as public law defences and defences under the Equality Act 2010.

Amendments to grounds 2 and 14

From 13 May 2014, ground 2 of the HA 1985 and ground 14 of the HA 1988 are amended to include the new paragraph (aa), adding a ground for possession where a tenant or a person residing in or visiting the dwelling-house has been guilty of conduct causing or likely to cause nuisance or annoyance to the landlord of the dwelling-house, or a person employed (whether or not by the landlord) in connection with the exercise of the landlord’s housing management functions, and that is directly or indirectly related to or affects those functions. Unlike existing paragraphs (a) and (b), there is no requirement for the conduct to have taken place within, or within the locality of, the dwelling-house.

Discretionary ground for possession: riot

Also from 13 May 2014, and in reaction to the rioting which took place during 2011, ground 2ZA and ground 14ZA, a new discretionary ground for possession has been added to the HA 1985 and HA 1988, respectively. The ground applies in England only, and where the tenant or an adult (a person aged 18 or over) residing in the dwelling-house has been convicted of an indictable offence which took place during, and at the scene of, a riot in the UK. ‘Riot’ is to be construed in accordance with section 1 of the Public Order Act 1986.

Section 21 notices and tenancy deposits

The DA 2015 received royal assent on 26 March 2015. There are two principal areas in the private rented sector which the act affects. These are outlined below.

Prohibition on service of section 21 notices

The provisions set out below apply to new tenancies granted on or after 1 October 2015. In 2018, they will apply to all assured shorthold tenancies, regardless of the date of commencement.

Sections 33-42 of the DA 2015 afford protection to tenants by deeming a section 21 notice as invalid in any of the four circumstances outlined below.

1. Where disrepair has been complained about by the tenant and the local authority has issued a relevant notice (section 33)

Section 33(1) provides a blanket prohibition on the service of a valid section 21 notice within six months of the service of a ‘relevant notice’ by a local authority. A relevant notice is defined by section 33(13) as: an improvement notice served under section 11 or 12 of the Housing Act (HA 2004), relating to a category 1 or 2 hazard; or an emergency remedial action notice, served under section 40(7) of the HA 2004.

Where the operation of the ‘relevant notice’ has been suspended, no section 21 notice can be served within six months starting from the date on which the suspension ends (section 33(1)(b)).

It is important to note that only three types of notice are prescribed. Other notices, such as hazard awareness notices, abatement or prohibition notices (served under the Environmental Protection Act 1990) and early notification letters are not relevant notices.

Section 33 is a second limb of protection, relating to cases where a tenant has made a complaint to the landlord and an adequate response has not been forthcoming, or a section 21 notice is served.

The criteria to be satisfied for this protection to apply are as follows.

• The complaint by the tenant is in writing.
• The landlord fails to respond within 14 days, or if they do respond, the response is ‘adequate’.
• A section 21 notice was issued in response to the complaint.

Section 33(2) renders a section 21 notice as retrospectively invalid if served in retaliation for a tenant’s written complaint if (and only if) the complaint results in the service of a local authority notice.

Section 33(3) defines ‘adequate response’. A landlord must respond in writing, in a reasonable timescale and with proposals to address the complaint.

Provision is made for a tenant unable to contact the landlord in writing as they are unaware of the landlord’s address or contact details. Section 33(4) and (5) retain the requirements to respond adequately even if the tenant is unable to put their complaint in writing, or where the tenant made reasonable efforts to contact the landlord to complain.

The protection is wholly dependent on the intervention of the local authority, which may need encouragement to involve itself, given limited resources.

The guidance ‘Improving the Private Rented Sector and Tackling Bad Practice’ reminds local authorities of their existing powers under the HA 2004 (and other legislative provisions), and how these powers can and should be effectively utilised. The guidance envisages a more proactive and robust approach by local authorities, and recommends that they ‘get to know’ their private sector, so that early identification of bad practice can be achieved and acted upon. Paragraphs 21-23 on identifying bad practice and paragraph 90 on prosecution are well worth reading, and local authorities may need referring to this guidance in cases where they appear reluctant to intervene.

A risk remains, however: where a landlord agrees to promptly carry out the necessary works, and thereby avoids having an improvement notice issued, they can still serve a section 21 notice, because the protective provisions will not apply unless notice is served by the council.

The DA 2015 includes two exemptions for landlords, which mean the protection for tenants is disapplied. The exemptions are set out in section 34 and are as follows:

• where remedial work is needed due to the tenant’s own actions or neglect; or
• where the property is genuinely on the market for sale.

Exemption 1 is likely to be the most useful to landlords. Landlords often allege either that the tenant has caused damage to doors, plasterwork and fixtures, or that their use of the property has resulted in condensation dampness due to inadequately heating the property or using the radiators to dry clothes. The court will need to embark on a fact-finding exercise, as the exemptions cannot apply in the absence of specific findings. It will be important that a tenant fully deals with these allegations, as the ultimate outcome will be a mandatory possession order if the protection is disapplied.

Exemption 2 will depend on whether a property is ‘genuinely’ on the market for sale. An exemption for mortgage lenders recovering possession is contained in section 34(7).

The Deregulation Act 2015 contains a number of provisions designed to make it easier for a landlord to get the service of a section 21 notice right

2. Where a landlord is in default of prescribed legal requirements (section 38)

Regulations will prescribe that the landlord must have complied with the health and safety requirements, such as an annual gas safety certification, and the provision of fire, smoke and carbon monoxide alarms.

3. Where the landlord is in default of requirements to provide prescribed information about the parties’ respective rights and obligations (section 39)

Section 39 amends the HA 1988 and adds section 21B, which makes provision for regulations requiring a landlord to provide information about the rights and responsibilities of the landlord and tenant (that is, to provide a tenancy agreement). Failure to do so will prevent a section 21 notice being served.

This provision will be of use to tenants who can’t get a written agreement, preventing them from knowing their responsibilities (and those of the landlord), and claiming housing benefit.

Section 39 echoes the prescribed information requirements of the tenancy deposit legislation contained in section 213 of the HA 2004 (as amended by the Localism Act 2011). Given the difficulties landlords have in complying with such requirements, it is likely that this provision will afford a defence to tenants facing accelerated possession proceedings.

4. Where less than four months of the tenancy have elapsed (section 36)

Section 36 inserts new section 21(4B)-(4E) preventing service of a notice during the first four months of a tenant’s occupation. This gives the tenant the same six-month security of tenure, but makes the timing of the notice slightly more difficult where possession is required at the end of a six-month term.

Section 36 also provides that a section 21 notice will only have a shelf life of six months, after which possession proceedings cannot be issued on the notice. This is contrary to the previous approach of the courts, that a section 21 notice could be relied on until it was waived.

The DA 2015 contains a number of provisions designed to make it easier for a landlord to get the service of a section 21 notice right. Section 35 amends section 21 of the HA 1988, by disapplying the requirement that the date specified in a section 21 notice must be the last day of a period of a tenancy. Section 40 inserts section 21C, which provides for rent repayment in respect of unexpired periods, which will be relevant where a tenant leaves the property part-way through a tenancy period. Section 37 removes the chance of making errors in the form of the section 21 notice; it adds a new section 21(8) to the HA 1988, containing a regulation-making power to prescribe the form of a section 21 notice.

Rent deposit amendments

Sections 30 to 32 of the DA 2015 introduce two changes to the tenancy deposit scheme. The provisions apply to all new tenancies commencing after 26 March 2015, and then to all tenancies after three years.

Section 30 amends the prescribed information requirements, so that an agent (rather than the landlord) can now provide their details if they are dealing with the deposit.

Section 31 confirms that no section 21 notice can be served unless a landlord has placed a deposit (regardless of when it was received) in an authorised scheme.

Section 32 inserts new sections 215A and 215B into the HA 2004, in response to the courts’ interpretation of the applicability of the tenancy deposit scheme to deposits received prior to the commencement of the tenancy deposit legislation (‘the Superstrike effect’).

In reaction to the 2011 riots, a new discretionary ground for possession has been added to the Housing Act 1985 and 1988

The new provisions deal with both pre-6 April 2007 deposits and those taken on or after the commencement date. Section 215A applies to deposits taken before 6 April 2007 and which became a statutory periodic tenancy after 6 April 2007 (again, Superstrike territory). To enable landlords to ‘catch up’, the provision allows 90 days to make the deposit in an authorised scheme and serve the prescribed information.

If landlords did not comply by 23 June 2015, penalties applied in the normal way.

Section 215B provides for deemed compliance if the following conditions are met:

• a deposit has been received on or after 6 April 2007;
• the initial (30-day) requirements of an authorised deposit scheme have been complied with in relation to the original tenancy;
• the prescribed information in relation to the original tenancy have been given to the tenant within 30 days; and
• when the new fixed of statutory periodic tenancies (SPT) comes into being, the deposit continues to be held in connection with the new tenancy, in accordance with the same authorised scheme as when the requirements of section 213(5) and (6)(a) were last complied with by the landlord in relation to the deposit.

There is no requirement to re-protect the deposit or re-issue the prescribed information upon expiry and renewal of an SPT, so long as the deposit continues to be held in the same authorised scheme.

The new sections 215A and 215B are treated as having had effect from 6 April 2007, although determined claims can be reopened if the new provisions would have benefited either party. The new provisions apply to claims issued before 26 March 2015 (possession or penalty claims under section 214). Significantly, a once-invalid section 21 notice will become valid if covered by the new provisions. A section 214 penalty claim will now be dismissed if the only basis for the penalty claim was the Superstrike failure to serve the prescribed information on the commencement of a statutory periodic tenancy. Costs cannot be claimed by the landlord (see section 215C(5)).