Possession procedure, HMOs and section 21 notices

Suspended possession orders

Where a tenant has breached a term of a suspended possession order which relates to payment of rent or arrears, landlords will no longer have to apply to court for permission before applying for an eviction warrant.

This is because Rule 83.2(3)(e) of the Civil Procedure Rules has been amended. This reverses the effect of Cardiff CC v Lee [2016] EWCA Civ 1034, at least where the breach relates to a failure to pay money. An application for permission is still required for other types of breach.

This change applies in England and Wales. By contrast the changes set out in the rest of this article only apply in England.

Houses in multiple occupation

Most readers will be aware that certain houses in multiple occupation ("HMOs") are subject to mandatory licensing. This means the landlord must apply to the local housing authority for a licence. Failing to obtain a licence is a criminal offence (subject to certain exceptions).

There are other implications for landlords of not obtaining a licence. Most notably:

• The tenant or housing authority may apply for a rent repayment order, and
• A notice requiring possession cannot usually be served under section 21 of the Housing Act 1988.

Definition

From today the definition of which HMOs are subject to mandatory licensing changes.

Essentially, there is no longer any requirement that the HMO must have at least three stories. Rather, the definition is that:

• The HMO is occupied by at least five persons, and
• The HMO is occupied by two or more households.

Clearly this change will bring thousands of properties within the scope of mandatory licensing (the Government estimates 160,000). No doubt many landlords will be unaware of the changes, and may get an unpleasant surprise. Not least if they apply for a possession order, having served a section 21 notice but didn't realise an HMO licence is now required.

Room size

A minimum room size also comes into force today for HMOs that are subject to mandatory licensing.

Rooms that are used for sleeping must have a floor area of at least:

• 6.51 square metres for one person aged over 10.
• 10.22 square metres for two persons aged over 10.
• 4.64 square metres for one person under 10 (rooms under 4.64 m2 cannot be used for sleeping).

If part of a room provides less than 1.5 metres between the floor and ceiling, this portion of the room is discounted when calculating floor area.

The above criteria are statutory minimums as local authorities have discretion to set higher standards.

Authorities must specify the maximum number of persons (if any) who can occupy a room for the purpose of sleeping accommodation, both in relation to persons under 10 years and those aged 10 or over.

The HMO licence must make provision for circumstances where a breach was not knowingly permitted by the landlord, and for allowing landlords a period of time, once notified, to remedy the breach. Landlords would be well advised to amend their tenancy agreements to oblige tenants to adhere to the rules. Landlords are also required to notify the local authority of any room in an HMO which has a floor space of less than 4.64 square metres.

A licence holder will commit a criminal offence if they fail to comply with the sleeping room standards by allowing a room to be occupied by more persons than the permitted number. A visitor sleeping in a room will not constitute a breach.

The relevant regulations are here (which amend Schedule 4 of the Housing Act 2004). There's also an Explanatory Memorandum and guidance for local authorities.

Section 21 notices

Landlords wishing to end an assured shorthold tenancy ("AST") usually use the 'no fault' procedure. This requires a two-month notice to be served under section 21 of the Housing Act 1988 and an application for a possession order once that notice has expired. The court must grant a possession order unless the landlord has failed to comply with the procedural requirements.

From today, the rules governing when a s.21 notice cannot be served have changed. I'm tempted to say the task of evaluating whether a notice is valid has gotten slightly easier. However you may disagree after reading the following summary.

Essentially, some of the requirements that previously only applied to tenancies that began (or were renewed) on or after 1 October 2015 now apply to all assured shorthold tenancies.

From today, irrespective of when the tenancy began, a s.21 notice is not valid if:

• The prescribed form is not used (currently Form 6A).
• The request for possession qualifies as a retaliatory eviction (the definition of retaliatory eviction is set out in sections 33 and 34 of the Deregulation Act 2015) (unless the landlord is a Private Registered Provider of Social Housing), or
• A possession claim is not made within six months of the notice expiring (or within four months of the expiry date, in the unlikely event that the period of the tenancy exceeds two months, or there's a contractual provision requiring more than two months' notice).

Changes not happening (yet..?)

The above changes are happening because section 41 of the Deregulation Act 2015 applies sections 33 to 38 and 40 of that Act to all ASTs that are in existence as of 1 October 2018 (by virtue of SI 2015 No 994, Art.11(n)). Basically, sections 33 to 40 amend section 21 by inserting additional requirements.

The apparent intention here was that, following the three-year period ending yesterday, sections 33 to 38 and 40 would apply to all ASTs, irrespective of when the tenancy started. Thereby the transitional period, in which we've had two different sets of s.21 requirements, ends.

However, it's appears that certain changes will still not have effect in relation to tenancies which began (or were last renewed) before October 2015.

These are the prohibitions on serving a s.21 notice where:

• A gas safety certificate has not been issued (assuming there's a gas supply) before the s.21 notice was given (or arguably before the tenant took up occupation), and/or where
• An energy performance certificate has not been given before the s.21 notice was served.

The prevailing view amongst housing lawyers appears to be that the Government will need to issue regulations, to bring these rules into force for tenancies that were granted (or last renewed) before 1 October 2015.

This is because regulation 1 of the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 SI No 1646 explicitly states that the regulations only apply to ASTs granted on or after 1 October 2015.

Notices and possession proceedings straddling 1 October 2018

What if a s.21 notice notice was served before 1 October 2018 in relation to a tenancy that began before 1 October 2015, but the landlord hasn't yet obtained a possession order?

If the landlord didn't use Form 6A they might argue that they are not caught by the new rules (on the basis that the notice was served before 1 October 2018). Here the tenant may defend any possession claim by arguing that s.41(3) of the 2015 Act provides that the Form 6A requirement applies if the tenancy is "in existence at" 1 October 2018.

(Applying the same reasoning it appears likely that the rule whereby s.21 notices have a limited 'life' applies retrospectively, including where the notice was served before 1 October 2018 in relation to an 'old' tenancy).

Rather than applying for possession the safer course for the landlord would surely be to serve notice again using Form 6A. Councils are also unlikely to accept that occupiers in this situation are 'threatened with homelessness' and accept a duty.

'How to Rent' guide

It remains the case that landlords do not have to give tenants the 'How to Rent' guide if the tenancy was granted (or last renewed) before 1 October 2015.

Subsection 4 requirements

In addition, in relation to contractual periodic ASTs granted before 1 October 2015, there is no longer any requirement that the expiry date of the s.21 notice must be the last day of a period of the tenancy.

If you're unsure about the validity of a notice you should seek legal advice.

Comment

The Government appears to have made a pigs ear of assimilating the rules concerning landlords' ability to use the s.21 possession procedure.

And while the changes to HMO licensing will be widely welcomed by tenants and those working in housing (if not landlords), it remains to be seen whether council enforcement teams have adequately prepared to deal with the large increase in HMO licensing.