Test case: Servicing a section 21 notice and prescribed information

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The Section 21 possession procedure (currently under threat of being removed) is a no fault eviction process where the landlord can serve notice on a tenant to regain possession once the initial minimum 6 months’ or contracted fixed term has ended.

A section 21 notice is for 2 months and will only be valid if the landlord or agent has met certain specific requirements, one of these being the service on the tenant of the correct prescribed information before or at the commencement of the tenancy.

Prescribed information required

In England, in addition to the deposit being protected in an approved scheme within 30 days of receipt, and the property being properly licenced for lettings, the landlord or agent must (1) provide prescribed information relating to the deposit, (2) provide an EPC, (3) provide gas and electrical safety certificates as appropriate, (4) provide the tenant with the current How to Rent guide

In addition the landlord must not be in breach of the Retaliatory Eviction regulations 2015 following a complaint about repairs, or the Tenant Fees regulations 2019 which prevent landlords from taking certain fees.

Meeting all of these requirements demands a good degree of due diligence on the part of the landlord or agent, but this is a crucial step in the letting process if a Section 21 notice is to result in a successful eviction.

The gas certificate controversy

There was some controversy some little while ago; a court found for a tenant when the landlord had failed to serve a gas safety certificate (GSC) before the tenancy commenced and ruled that the S21 notice was therefore defective.

Thankfully this anomaly – which would have resulted in thousands of landlords unable to use s21 – was cleared up by The Court of Appeal in Trecarrell House Ltd v Rouncefield [2020] when is was confirmed that a landlord failing to provide a tenant with a copy of a GSC before the start of a tenancy does not create an absolute bar on landlords subsequently relying upon the S.21 eviction procedure.

The default can be remedied by providing the certificate before serving a S.21 notice, providing the certificate was in force at the commencement of the tenancy. It also follows that failure to provide a copy of any further GSC relating to subsequent gas checks is not fatal providing they are given before a S.21 notice is served.

The test case

In the test case under consideration here in George Minister v Darran Hathaway and Susan Hathaway June 2021, the issue was whether a notice served by the landlord on the tenant under Section 21 of the Housing Act 1988 was invalid because no energy performance certificate (“EPC”) had been served prior to the service of the section 21 notice.

This tenancy had commenced in 2008, before EPCs for lettings came into force from 1 October 2015.

The question was whether service of an EPC was required at the relevant time under the 1988 Housing Act, the Deregulation Act 2015 (“the 2015 Act”) and the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015.

The judgement

District Judge K. Harper had held that service of an EPC was required and therefore the section 21 notice was invalid, whereas His Honour Judge Simpkiss on appeal held that service of an EPC was not required and therefore the section 21 notice was valid.

The tenant however was granted permission for a second appeal because the issue was deemed one which had divided judges and commentators alike.

This second appeal determined that a landlord of an assured shorthold tenancy (AST) commencing before 1 October 2015 could in fact enforce a Section 21 notice even though the tenant had not be served with an EPC before the S21 notice was served.

An important precedent

The case sets an important precedent – which applies only to England – for all prescribed information relating to Section 21 and AST tenancies which began before 1 October 2015.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Test case: Servicing a section 21 notice and prescribed information | LandlordZONE.

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Landlord couple fined £190,000 after evading HMO licensing at six properties

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A landlord couple who avoided licensing six of their 600 properties in East London have been fined almost £190,000.

Husband and wife Lahrie Mohamed and Shehara Lahrie, directors of at least 28 property companies, claimed they were renting the six HMOs to a single tenant, which was in fact their letting agent; one HMO in Eastfield Road (pictured), Walthamstow, was home to seven people under four tenancies, which they said was one household.

Last May, the pair lost two judicial reviews against Waltham Forest Council in a landmark ruling after first being summonsed to magistrates’ court in 2017. The council was represented legal firm Sharpe Pritchard.

Their legal challenges were dismissed and the court ruled that the council was not required to demonstrate that they were aware their properties were being used as unlicensed HMOs.

£1,000 fee

For a Leytonstone property, in Napier Road, they received more than £33,000 in rent a year without having to pay the £1,000 licence fee or management costs.

Mohamed Lahrie’s lawyer, Imran Khan QC, (pictured) said the properties were just 1% of their property portfolio and insisted the financial benefit of not declaring these six HMOs was “miniscule”.

He added: “Mr Mohamed arrived in this country with little money in his pocket and built up a portfolio over two or three decades, through hard work with his wife.

“That property portfolio has been engaged in providing safe and fit homes for many of the residents of Waltham Forest. Mr Mohamed, as a result of this case, has sold his portfolio of properties.”

Outside the court, Lahrie told the Local Democracy Reporting Service: “I have learned my lesson and I regret what I did.”

At the start of the hearing, letting agent Station Estates Limited was formally cleared of charges against it after the council offered no evidence. According to Companies House, the agency was declared bankrupt in May 2019.

Read more about HMO licensing fines.

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Lichfield Council need more private homes and offering Landlords up to 6 months rent in advance

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Lichfield District Council in Staffordshire are offering landlords up to six months rent in advance if they lease one or more homes to Spring housing association in a bid to help people who are sleeping rough or at risk of becoming homeless.

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£50 or the reasonable costs?

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A recent Tribunal between estate agent Ludlow Thompson v Tenant has ruled that a charge of £393.54 to cover costs of changing the tenant was unreasonable. According to the Tenant Fees Act 2019 (TFA) a fee can be charged where a tenant wants to leave early and replace themselves with an alternative tenant.

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One bad apple?

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I know this is an issue that every landlord encounters at some point, unfortunately, it’s now my turn to deal with this.

I have a flat in a purpose-built block of 6, containing 5 rentals and 1 owner-occupied all nicely kept

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UK’s most expensive ever HMO licensing scheme to launch in London

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Lambeth Council has launched a new additional licensing scheme that will see the borough’s private landlords paying the highest per bedroom HMO fees in the country.

Under the current licensing scheme, landlords pay an application fee of £289 per bedroom for a five-year licence, equating to £1,156, but according to London Property Licensing (LPL) the authority has now hiked its fees by 75% to £506 per bedroom so that licensing a four-bedroom HMO will set them back £2,024.

The new scheme, which comes into force on 9^th December, will cover about 5,000 HMOs, including house and flat shares, bedsits, and some buildings converted into flats. Famous areas of the capital will be covered including Brixton (pictured), The Oval, Crystal Palace and Waterloo.

Smaller house and flat shares will now need a licence if they are occupied by three or more people forming more than one household.

Discount

Accredited landlords get a 20% discount under the new fee structure, and there’s a 50% discount for registered charities. LPL says a recent council email advised landlords that the standard fee had been lowered as a result of the consultation and a reduced fee of £116 per bedroom could apply if all discounts were used. Lambeth expects to generate £10 million income over the next five years,

Kamma Data says Lambeth’s fees put it at the top of the licensing table, followed by Glasgow City, Moray and Waltham Forest, while the average standard fee in the UK is £708.

CEO Orla Shields (pictured) says even a two-bed flat, if a couple and a friend move in, will usually qualify for licensing, so it’s vital that both landlords and agents stay ahead of legislation.

She tells LandlordZONE: “With fees this high the onus will be on Lambeth Council to provide value for money and effective policing of the scheme.”

The council’s consultation prompted 417 people to respond; 81% of landlords and agents were against the idea, but it was backed by two-thirds of residents.

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‘Happy birthday buy-to-let – it’s been a 25-year long roller-coaster ride’

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You may not realise it, but the buy-to-let landlord sector as we know it today is now 25 years old.

It was kicked off on September 24, 1996, at a famous meeting between a handful of lenders, brokers and property industry trade representatives at the RAC Club on London’s Pall Mall, where it was agreed that a new kind of mortgage would be launched.

“It took a while for these mortgages to take off, and the period of real growth in this market was from 2000 onwards,” says Eddie Hooker, Chief Executive of Hamilton Fraser (pictured), which was established just a few days after the RAC meeting.

Hooker remembers how at the time the concept of being a landlord was a niche, minority activity but that tax changes brought in by then Chancellor Gordon Brown were instrumental in changing that.

Gordon Brown

“The surge in landlord numbers was, I believe, not so much down to the mortgages but Gordon Brown changing the UK’s pension rules in 2006 to allow retirees to draw-down tax-free lump sums from their pensions, and also use SIPPs to invest directly in holiday home and buy-to-let properties,” he says.

Hamilton Fraser capitalised on the growth and, along with other pioneers such as Homelet and Alan Boswell, helped serve a burgeoning demand for renting-specific insurance.

“Simon Fox and myself set up HF in 1996 and one of our earliest clients was the Small Landlords Association which had about 3,000 landlords as members and we became their exclusive provider of landlord insurance,” says Hooker

“That’s where our Total Landlord insurance policy came about, via the SLA which, in 2002 became the National Landlords Association (and later the NRLA) as more and more people became landlords and wanted somewhere to turn to for advice and solutions.

In those days people had to buy a household insurance policy and go through a normal mortgage process to let a property – and hope no one asked any questions.

Take cover

“We were giving cover that normal household policies couldn’t offer like property owners’ liability cover in case their tenant hurt themselves, and malicious damage caused by the tenant.

“We were one of the pioneers of the original landlord and buildings insurance which later became known as buy-to-let insurance in the early 2000s.”

Other innovations came along too including rent guarantee insurance, which at the time was a really bespoke insurance pioneered by Homelet and LetSure, now operating under the Barbon umbrella. 

Housing act

But the next tranche of big changes for the sector came in the early noughties with the 2004 Housing Act and the introduction of tenancy deposit protection which linked with ASTs and the ability to use Section 21 evictions. 

“I am proud to say that HF was at the centre of that big PRS reform in the mid noughties – without us and TDS and Barbon, I don’t think the sector would have been professionalised in the way it has,” says Hooker.

“I like to think that Hamilton Fraser has offered transparency, revolution and education to the sector to make it better for landlords and tenants.

“We have longevity and experience in the market and a real drive to try and help the landlord community be more respected.

“Looking forward, we will still have a big role to play in the sector including lifetime deposits, landlord redress, the regulation of estate agents and also referencing and identity checking.

“I think we’ve got a very good future ahead of us because we know what’s coming down the track and we’re preparing and guiding and helping government formulate that.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘Happy birthday buy-to-let – it’s been a 25-year long roller-coaster ride’ | LandlordZONE.

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