Case law aside, legal developments in the residential sector have been relatively low-key this year, but there is still plenty to reflect upon.
In the field of planning, the Town and Country Planning (General Permitted Development) (Amendment and Consequential Provisions) (England) Order 2014 came into force on 6 April. Among other things, this allows for the conversion of agricultural buildings to residential use (barn conversions).
Looking forward to 2015, clause 34 of the Deregulation Bill would empower ministers to relax or modify the prohibition on short-term (sub-90-day) letting without planning consent, which applies to Greater London (section 25 of the Greater London Council (General Powers) Act 1973). Many people unwittingly breach this section (eg letting a house for Wimbledon fortnight) so change is probably to be welcomed. The Housing (Wales) Act 2014 (an Act of the National Assembly for Wales passed on 17 September) imposes in Part 3 (not yet in force) on housing authorities in Wales a duty to provide adequate sites for gypsies.
Residential leasehold
The most significant changes concern residential leasehold. Starting with long leasehold, July saw the coming into force of the Leasehold Reform (Amendment) Act 2014, which amended section 99(5) of the Leasehold Reform, Housing and Urban Development Act 1993 to remove the requirement for personal signature of an initial notice claiming collective enfranchisement or a lease extension. The amendment applies only to England. In Wales, an amendment of section 99(5), to the same effect but textually different, is made by section 140 of the Housing (Wales) Act 2014 (in force 1 December).
In August, the Social Landlords Mandatory Reduction of Service Charges (England) Directions 2014 came into force. These apply to service charges for work funded wholly or partly from a government programme, principally the Decent Homes Backlog Funding. Essentially, charges referable to work funded in this way are capped at an aggregate sum over a five-year period of £10,000 (£15,000 in Greater London). The directions are made under powers conferred by sections 219 and 220 of the Housing Act 1996 and thus have statutory force.
The same enabling power underpins the Social Landlords Discretionary Reduction of Service Charges (England) Directions 2014, which also came into force in August, and in the case of a service charge in respect of works of repair, maintenance or improvement, permit a social landlord to waive or reduce the charge by an amount the landlord considers to be reasonable.
The short-lease rented sector saw significant change. Part 5 of the Anti-Social Behaviour Crime and Policing Act 2014 came into force in October 2014. This introduces new grounds for possession into the Housing Act 1985 (secure tenancies) and the Housing Act 1988 (assured tenancies) based on anti-social behaviour.
Part 3 of the Immigration Act 2014 deprives adults lacking immigration status from “the right to rent” and once in force will prohibit private residential landlords from allowing such adults to occupy their properties. The Immigration Act 2014 (Commencement No 3, Transitional and Saving Provisions) Order 2014 enables the Home Office to pilot a scheme in the Midlands requiring landlords to check the immigration status of prospective tenants.
Letting and management
The mayor of London launched the “London Rental Standard” in May 2014. In June, the Competition and Markets Authority published consumer protection law guidance for lettings professionals alongside a further document, Key principles for lettings professionals. A voluntary model tenancy agreement intended for longer-term lettings was published in September 2014. Then in October, a new voluntary code of practice on the management of property in the private rented sector was published. It was developed by the RICS with other industry bodies; this code does not currently have statutory force – but that could change.
What does have statutory force is the Redress Scheme for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014. This order made membership of an approved redress scheme a legal requirement for all letting and managing agents in England with effect from 1 October 2014. Three such schemes have been approved – the Property Ombudsman; Ombudsman Services Property; and the Property Redress Scheme.
The government has made clear that it does not intend to introduce a system of regulation or licensing for the private rented sector. That view is not shared by Welsh ministers. Part 1 of the Housing (Wales) Act 2014 (again not yet in force) lays down a comprehensive scheme for the registration and licensing of landlords, letting agents and managing agents in Wales backed up by criminal sanction. Section 44 will also make it impossible for an unregistered or unlicensed landlord to terminate an assured shorthold tenancy.
Future changes
Further change is just around the corner. The Consumer Rights Bill currently passing through Parliament includes in Part 3 of Chapter 3 provisions which will oblige letting agents to publish in their offices and on their website lists of their fees for letting and management work. These obligations will be enforceable by local authorities, which will have the power to impose civil financial penalties.
The workings of tenancy deposit schemes introduced by the Housing Act 2004 remain problematic. Clause 31 of the Deregulation Bill currently passing through Parliament proposes to add provisions to govern the situation where a fixed-term tenancy expires and a periodic tenancy arises. Certain requirements of section 213 of the 2004 Act will be deemed satisfied in such cases. Schedule 4 of the bill proposes to amend the Agricultural Holdings Act 1986 to permit disputes to be referred to third party determination as an alternative to arbitration.
In the slightly longer term, following a meeting at Portcullis House, it is possible that amendments to the commonhold legislation will follow, although instant action is not on the agenda. In the meantime, there is to be a leasehold round table meeting in January 2015, with the aim of identifying further reforms of leasehold, which the next government might take forward.
Philip Rainey is a barrister at Tanfield Chambers
