Sunday, April 02, 2006

Two steps back?

One of the penalties for failing to get a license for your HMO will be that you will not be able to use the section 21 procedure to evict your tenant (this is the no fault/shorthold possession ground from section 21 of the Housing Act 1988, generally enforced via the optimistically named 'accelerated' possession procedure). Likewise, when the tenancy deposit scheme comes into force later this year, landlords who take deposits while not part of an authorized scheme will also be unable to use the section 21 procedure.

The Housing Act 2004 states no section 21 notice may be given in relation to a shorthold tenancy of a part of an unlicensed HMO so long as it remains such an HMO (s75) and if a tenancy deposit has been paid in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy (s215).

However they cannot physically stop a landlord from drafting up a document purporting to be a section 21 notice and serving it on the tenant. What the statute actually means is that the notices will not be effective. However how will the court know, if the landlord then brings proceedings for possession?

The answer is almost certainly that the court forms will be changed and the landlord will be required to certify that (with regard to licensing) either the property is not subject to licensing or that one has been obtained. So far as tenancy deposit schemes are concerned, again, the landlord will either have to show that no deposit has been taken or give proof of compliance with the scheme requirements.

However there will also be ways that defendants can check and verify the landlords assertions. Every local authority is required to keep a register of licensees which must be open to inspection from the public, and to provide certified copies of entries (s232). Likewise no doubt the authorized tenancy deposit scheme providers will also be required to keep a register of landlords and deposits, by the regulations due to be published later this year.

Although I understand and indeed to a large extend applaud the aims of the licensing and tenancy deposit schemes, which are there to improve standards and protect tenants deposits, I can see that this will all add an extra layer of complexity to the bringing of proceedings for possession under the section 21 procedure, already rendered hideous by the insane requirements of s21(4) regarding the need for the notice to state the ‘last date of a period of the tenancy’, which has caused many a landlord to lose his case and declare the law to be an ass. Let us hope that this blight on an other wise straightforward process is done away with in the forthcoming Law Commission proposed new tenancy laws, should they ever enter the statute book. Although for many landlords it may appear just as one step forward after two steps back.

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Anonymous said...

what about the situation where a section notice was served before 6 April (and the 2 months expired before then too) but the possession hearing does not take place until after that date?

Tessa said...

Off the top of my head, my feeling is that the landlord would be wise to have applied either for a license or for a temporary exemption notice before issuing proceedings. The court forms now have questions on licensing for HMO properties and the Judge may well refuse an order to a landlords whose property is a relevant HMO which is unlicensed. It is better to be safe than sorry.