Section 21 – serving EPCs for HMO tenants?

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Court Case:

With all the additional prescribed requirements introduced for assured shorthold tenancies of late, there is something of an inevitability that an abundance of cases will be coming to court in the future, testing potential “loopholes� in administration.

Tenants’ lawyers will without doubt attempt to stymie evictions for their clients (often publicly funded) because of landlords’ and agent’s failures to fulfil one or more of these numerous and rather complicated requirements.

Without good documentary evidence that all the many “boxes have been ticked� on setting up a new tenancy, landlords and agents will inevitably be stymied time and again.

A case in point was the one of Home Group Ltd v Henry (2018) which involved an HMO tenant who claimed that because he had not been issued with an EPC when he took up the tenancy, the landlord’s possession order under section 21 was invalid. Good try Henry!

Since the introduction of the energy performance regulations and the EPC, it’s always been a bit of a “grey� area within the legislation where HMOs are concerned, and whether an HMO tenant was required to be served an EPC as a prescribed requirement. After all it is very clear than tenants of single properties must be served an EPC at the time the tenancy is set-up.

Since October 2015 the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015, section 2a states the prescribed requirement: regulation 6(5) of the Energy Performance of Buildings (England and Wales) Regulations 2012(2) (requirement to provide an energy performance certificate to a tenant or buyer free of charge).

The question as to whether an EPC service is necessary for an HMO tenant revolves around the distinction between a tenant occupying a building, or a section or room within a building (bedsit), re the wording in The Energy Performance of Buildings (England and Wales) Regulations 2012, which states:

The relevant person must ensure that a valid energy performance certificate has been given free of charge to the person who ultimately becomes the buyer or tenant.

Mr Henry had an AST for a room in an HMO and argued that he should have been served an EPC when his tenancy started, and that therefore the landlord’s possession order was invalid. To support this argument Henry pointed to the fact the guidance in the new section 21 notice (form 6A) made no distinction between a single letting and an HMO, regarding the service of a valid section 21 notice.

The landlord, Home Group, on the other hand, argued that the requirement to provide an EPC under reg 6(5) of the 2012 Energy Regulations referred to the letting of a building or building unit and not a section within a building.

The relevant legislation refers to a “building� and a “building unit�, without mention of a section within a building, a room or bedsit, and on that basis the landlord argued the case.

The appeal was dismissed and the judge stated that while there was nothing expressly made in the 2005 AST regulations for HMOs tenancies, this would have required a new definition of EPCs to be relevant to a room, not a building or building unit.

He also stated that the explanatory note to the form 6A was guidance only and not in itself the law, and he thought these notes were misleading.

As this judgement was laid down by a county court appeal to a circuit judge, it is not binding and may not be the last word on the matter if further appeals transpire.

However, the reasoned argument seems pretty clear, so any future challenge, says Giles Peaker of Nearlylegal.co.uk, is “whether a room in an HMO falls under ‘building unit’ as designed or altered to be used separately, whether the MHCLG guidance on EPCs is right, and whether there is really any policy reason why a prospective HMO tenant should not be informed of the energy efficiency of the building.â€�

Acknowledgements to Giles Peaker of www.nearlylegal.co.uk

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