Renters need more protection than legal technicalities

Renters need more protection than legal technicalities

Two legal cases about private renting have gained a lot of attention recently in the housing press. Both concern the use of possession notices. But what are the implications for renters?

The first is Superstrike Limited vs. Rodrigues, a tenancy deposit case which came before the Court of Appeal last year.  Superstrike took a deposit before the tenancy deposit legislation came into effect in April 2007. When the 12 month fixed term contract came to an end in 2008 and became a rolling statutory periodic tenancy, Superstrike failed to protect the deposit. In 2011, when the tenant, Mr Rodrigues, was served with a Section 21 possession notice, he argued his landlord couldn’t evict him because they hadn’t complied with tenancy deposit legislation, as the periodic tenancy had started after the law had come into force in 2007.

The Court of Appeal ruled in favour of Mr Rodrigues. A rolling statutory periodic tenancy was considered to be a new tenancy, not a continuation of a fixed term. The outcome was that, to comply with the legislation, even in cases where a deposit had been legally protected, landlords had to issue the prescribed information to confirm this whenever a new tenancy arose.

Landlords reported this caused a lot of confusion.

The Government’s response was that this wasn’t the intention of the original tenancy deposits legislation, so they’ve tabled an amendment on deposit protection as part of the Deregulation Bill. If the amendment passes, landlords will not need to re-issue the information about deposit protection when a fixed term tenancy becomes a rolling tenancy or is renewed for deposits taken since April 2007. And landlords will be allowed 90 days to protect deposits taken before April 2007.

This amendment in itself will not substantially affect the rights of renters – requiring landlords to re-serve information which has already been given doesn’t give renters any extra protection. But the case is important because, even where a deposit had been protected, it allowed renters to challenge an eviction on the technicality that the landlord had failed to serve the correct information. This didn’t ultimately stop renters being evicted – but it delayed the process while the landlord served the correct information and then reissued the Section 21 notice, giving them more of a chance to find another letting.

The other recent case of interest is Spencer vs. Taylor; another Court of Appeal case concerning the technical details of how a Section 21 eviction notice is served.

The law currently sets out two types of ‘no-fault’ Section 21 notices, one for fixed-term tenancies and one for periodic tenancies.

Under both notices, landlords must give a two month notice period. However, in a periodic tenancy the landlord must also ensure that the notice is dated to expire on the last day of a period of the tenancy. In practice this means that renters are given as a minimum two months’ notice plus however many days or weeks to bring them up to the end of their tenancy period.  So, for example, if the rent is normally paid on 30th of each month, if notice is served on 15 June, it notice should be dated to expire on 29th August.

This difference between the two notices is fairly subtle, so landlords often confuse the two – either serving the wrong notice or providing an incorrect expiry date.  This allows renters to challenge a Section 21 notice on the basis it’s incorrect.

This is what happened in the case of Ms Taylor, who was in a statutory periodic tenancy after the expiry of a fixed term tenancy. When her landlord served a Section 21 notice, he failed to properly calculate the correct last day of the tenancy period. The court ruled that the notice was in fact valid because the tenancy had at some stage been a fixed term, and so it only needed to be two calendar months long.

Much to the surprise of housing lawyers, the Supreme Court refused Ms Taylor permission to appeal this decision, so it stands. Landlords can now use either type of Section 21 notice to evict tenants who are in a statutory periodic tenancy. Both only give renters two months to find a new home. Again, this case removes the scope to challenge some Section 21 notice on a technicality.  That landlords might confuse the two notices and serve them incorrectly gave renters some limited ability to challenge a possession notice and remain in their homes for a bit longer. When you’ve got to uproot your family, possibly after living in your home for a number of years, and find somewhere new to live in a hurry, even a few weeks’ more notice can make a difference.

What are the implications for renters?

The key implication is that the already narrow scope that renters had to challenge Section 21 no-fault eviction notices has been narrowed further – as landlords are now more likely to get the notices right first time. This matters because renters have so few rights to challenge a no-fault eviction.

Both these cases highlight the very fragile position of renters, and the lack of legal protection to stop them being evicted from their homes at very little notice.  With 9 million people now renting from a private landlord – 1.3m of them families with children – it’s clear that renters who pay their rent and act responsibly urgently need more protection from losing their home with just two months’ notice.

  1. Superstrike cause a lot of landlords headache, in having to re-served the prescribed information.

    The judge was at fault, he implied the deposit had been returned to the tenant after six months , the tenant had imaginary sent back the deposit to the landlord and then landlord imaginary re-protected the same deposit again, but landlord imaginary did not serve the ‘prescribed’ information on the tenant.

  2. Just because a Section 21 is a “no-fault” eviction, does not mean the tenant is not at fault. Sometimes it is just more civilised to go to Court, say I want the property back, rather then saying the tenant is not looking after the property or is been neglectful.

  3. Hannah Gousy, you are absolutely right to raise this, I was VERY disappointed to see the lack of representation of tenants by Shelter on this matter when the deregulation act went through Parliament.

    Landlords complain because most of the cases are them not filing the deposit in accordence with legislation, well the deregulation act (as proposed) increases this to 90 days which HALF an Assured Fixed Term Tenancy, it was already increased from 14 days to 30 days, 90 days is a joke.

    As far as I can see the deregulation act is just payback by the Tory Government (who I would normally support – but no more) financial supporters.

    We live in a time where it is extremely hard to find a property; the tenants get ripped off by Agents charging them what should be Landlord fees (the landlord can offset them against their tax on profits).

    Landlords often use a Section 21 to get rid of a tenant just so they can
    increase the rent without having to comply with the legal obligations if they try to increase it with the same tenant in place.

    Landlords routinely abuse the deposit scheme by saying a carpet that has already been cleaned (sometimes by professionals) needs professional cleaning just so they can get their hands on the deposit.

    They often see this deposit as theirs to do up the property for the next
    rental, when that essential improvement is a cost of doing business. If they lived in the property it would degrade, even if they left it empty it would deteriorate. So why should a tenant have to pay for what is wear and tear?

    20 page Inventories are taken listing a load of faults, but it is impractical for the tenant to verify that those are the only faults, for example a hairline cracked floor tile. Yet the Landlord will use such things, suggest the tenant was responsible and say the whole floor needs to be replaced at cost to the tenant.

    The tenant is in a weaker position when signing a tenancy agreement, some of which run into 25 pages and are full of terms considered by The Office of Fair Trading (OFT356) as being unfair contract terms. They are not given an opportunity to read and understand all the terms and often they will just sign because if they want the home what choice do they have?

    Then we have rent increases caused by the lack of supply, over occupying and just plain greed. What the Government fail to realise is that increased rents increase benefit costs as Housing Benefit (which many working families depend on) is based on LHA rates which are indexed to the current rents.

    Superstrike was in fact GOOD LAW; a tenant should NOT be expected to have a deposit taken for the performance of one tenancy agreement be automatically applied for another tenancy created by statute. However, to help Landlords it would be very easy for the Deposit Protection Service, TDS and MyDeposits to contact the Landlord at the end of a tenancy and produce (semi) automated paperwork that informs the tenant they are still protected.

    The changes I would like to see Shelter campaign for are:

    1. A massive increase in building of social housing; our population has increased by 5 million and even middle class families have been priced out of buying their own home on the private market. When I say massive I mean at 1 million new homes every 5 years until all local authority lists are down to a maximum of 3 months waiting. This may require an increase of town boundaries and if so, then so be it, people go on about green belt but we have only built on 7% of this country. Real support should be offered to the building industry, especially the micro builders who build small schemes. For the larger builders there could be tax breaks and support for their private
    plans if they build 50% social housing on developments. The pricing of
    these social units needs to be at about 20% to 25% of current market value.

    2. That within 3 years these social homes should then offered for sale to the tenants, not in the pathetic shared ownership offered now, but in the same way that Mrs Thatcher sold them and the money reinvested to build more of the same. This will create a “bottom up” recovery rather than the “top down” bubble we have now with properties being bought by foreign investors and left empty. This strategy will increase the number of properties available and thus bring down rents which in turn will bring down Housing Benefit. It will also give people “buy in” to society and their community. It would also put more money into the economy as these properties are decorated and improved.

    3. A minimum let of 3 years, some might ask for that initial 6 month assured tenancy but the problem is that all landlords would do just 6 month tenancies which would be intolerable. I would allow a break clause (allowing S21) for substantial damage, non-payment of rent for more than 60 days, socially unacceptable behaviour that has involved the local authority. All of these requiring a written warning before the tenancy is broken.

    4. Much tighter restrictions on increasing rent, I would limit this to the same 30th percentile of LHA so they would not be allowed to increase it if it was already above the LHA rate. This is no different to freezing benefits, it puts a brake on massive inflation we have seen in rent prices.

    5. A ban on charging tenants for ANY charges other than Rent and Deposit, all other fees to be charged to the Landlord, this may sound unfair but what would happen is that Landlords would force agents to get real about their rip off fees. Things like £150 to print out a tenancy agreement they have used 100 times, the completion of which takes less than 20 minutes and is performed by someone on £7 an hour. The same applies to the booking in/ booking out and plethora of made up charges agents are charging tenants.

    6. A standard charge for deposits, 4 weeks rent for properties with less than 3 bedrooms and 6 weeks rent for properties above 3 bedrooms.

    7. There also needs to be a ban on Landlords being able to decline
    tenants on DSS and especially not being able to decline tenants with Children, this is disgusting. Our society is changing and rental properties are becoming the only choice for most people.

    8. Making the 2006 Guidance by the Office of Fair Trading (OFT356) come into Law and being grounds for dissolving a tenancy and a statutory one replacing it with the same end date. You have only to go onto the Landlord forums to see Landlords putting in all kinds of crazy obligations on tenants. Some of them even proposed a tenant giving up their right to privacy so a Landlord could make enquiries to the local authority to see if they were on DSS.

    9. A right for tenants to be able to query an unfair tenancy AFTER they have moved in by referral to the OFT or Local Trading Standards to be assessed for unfair contract terms WITHOUT losing their tenancy. Such a tenancy would be dissolved rather than having unfair terms excluded as a deterrent to Landlords to put such clauses into agreements in the first place. The referral should cost the tenant £75 if the tenancy is found to be OK and the Landlord £200 if a new statutory tenancy has to be created.

    Renting properties out is not a game, it is a business and profits are not on the rent but the long term increase in property prices.

    Landlords should NOT be expecting tenants to finance their underfinanced business. The above may be seen as a tenant’s charter but it is actually good for landlords, at least the professional ones, those that are not professional should be encouraged to get out of the business.

  4. As I predicted the deregulation bill has become a Landlords Charter.

    Just look at the housing changes in the deregulation bill, Landlords have been putting forward amendment after amendment to the point where Tenant protection is almost completely lost

    Shelter should have been making representations to the Lords as and
    when these were made by subsribing to the changes. The Labour Party is also guilty of ignoring this. The idea of this legislation was to
    address Superstrike but it has not been a Landlords desire bill. Just
    remember I warned you.

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