A Clearer View

Lisa Simon, Partner and Head of Residential Division, offers a practical update on residential letting issues currently in the news.

A Fairer Private Rented Sector?

On 16 June the Government published a White Paper A Fairer Private Rented Sector as a precursor to the much anticipated Renters Reform Bill. The White Paper builds on some of the objectives set out in February’s Levelling Up White Paper and conveys the Government’s long-term vision for the private rented sector (PRS). It has been seen as major reset of power between tenants and landlords.

The White Paper introduces four major reforms: 

1. Section 21: ‘no-fault’ evictions – the most common means by which landlords can terminate a tenancy if the tenant does not agree to vacate – are to be abolished. Currently the only alternative to Section 21 is Section 8. 
2. Decent Homes Standard: this will be extended to the private sector for the first time, requiring landlords to keep homes in a good state of repair free from serious health and safety hazards. According to the Government’s figures, 21% homes in the PRS are currently below-standard. 
3. Property Portal: to help landlords understand the increasing raft of obligations that they face and to give councils and tenants the information they need to tackle rogue operators, a new Property Portal is proposed.
4. Private renters’ ombudsman: the new housing ombudsman will be created to enable disputes between private renters and landlords to be settled quickly and cheaply outside of court.

In addition to these four reforms, proposals within the White Paper include: 

• Access rights to be altered to allow landlords to gain possession from anti-social tenants.
• The end of arbitrary rent review clauses, to give tenants stronger powers to challenge rent increases and to enable rent rebates for ‘non-decent homes’.
• The doubling of notice periods for rent increases.
• Blanket bans on renting to families with children or those in receipt of benefits to be outlawed.
• Tenants to be given the right to request a pet in their house, which the landlord must consider and cannot unreasonably refuse.

The measures introduced in the White Paper will form part of the Renters Reform Bill which was announced in the Queen’s Speech and is due to be introduced in the current parliamentary session. 

 

New legal responsibilities concerning smoke and carbon monoxide alarms

The Smoke and Carbon Monoxide Alarm (Amendment) Regulations 2022 were published by Parliament on 11 May 2022 and are due to come into force in England on 1 October. Similar requirements will be introduced in Wales through the Renting Homes Wales Act.

Building on the 2015 Regulations, new regulations state that:

• CO2 alarms must be fitted in rooms containing a fixed combustion application (excluding a gas cooker).
• A smoke alarm must be fitted on every floor of the property.
• When an alarm is reported not working, it must be repaired or replaced by the landlord as soon as possible. 
• The existing regulations have been extended to include social landlords.

From the landlord (or landlord’ agent)’s point of view, the main change is the responsibility for alarms is not only at the commencement of a tenancy: if a tenant reports a defect at any time, it must be resolved by the landlord. Therefore, it is advisable to assume an ongoing obligation and to make checks when carrying out regular property inspections and/or to include this in the annual gas safety checks, maintaining documentary evidence. It is also recommended that tenancy agreements include a responsibility for tenants to test and clean alarms regularly.

Alarms should be mains-powered or include long life batteries. They should be kite-marked and BS EN 50291 compliant. Landlords may install alarms themselves, but as their maintenance is the landlord’s responsibility, it may be prudent to include them in the annual gas safety check which is carried out by a Gas Safe engineer. 

Non-compliance can result in the local authority issuing a penalty of up to £5,000. Landlords are required to take all reasonable steps to comply with the duty but if they are prevented from entering the premises they should not be found to be in breach of the regulations. Should the landlord wish to challenge a penalty notice, they have 28 days in which to respond. The notice is then suspended until the local authority reviews its decision and notifies the landlord. The outcome of the review must be provided to the landlord in writing no later than 35 days after the original notice is served. If the local authority does not do this the notice is considered to be withdrawn. If the notice is confirmed after review, the landlord has 21 days in which to address the contents of the notice and fix the issues.

 

New funding for low carbon heating systems

The Boiler Upgrade Scheme (BUS) is a Government grant which runs from 2022 to 2025. It replaces the Domestic Renewable Heating Incentive (DRHI), which closed on 31 March and, through up to £450 million in grant funding, is expected to encourage the take-up of 90,000 heat pumps over three years. 

The scheme is open to domestic and small non-domestic properties in England and Wales and covers:

• Air source heat pumps: £5,000 off cost and installation.
• Ground source heat pumps: £6,000 off cost and installation.
• Biomass boilers: £5,000 off cost and installation.

Grants are offered at a flat rate and do not vary by capacity of the installation (which must not exceed 45 kWth). The grant application must be made by a registered heating system installer and the one-off payment is sent as a voucher. The vouchers have a time limit of three months for air-source heat pumps and biomass boilers, and six months for ground source heat pumps.  Checks are undertaken before vouchers are issued and grants are paid.  

New builds and social housing are not eligible for support. Biomass boilers will only be supported in areas defined by the Office for National Statistics as rural, with no connection to the gas grid and which, following new installation, do not use electricity for heating.  All applicants must have a valid EPC. If the EPC states that cavity wall or roof insulation is recommended, this must be done prior to the application for the BUS Scheme. Finally, it is required that an MCS registered installer undertakes the work.

The 2022 Spring Statement also introduced zero rate VAT relief on Energy Saving Measures including solar panels and heat pumps, from 1 April 2022 to 2027.