Monthly Archives: December 2017

It’s cold outside

Clara Zang gives you fair prior warning of the forthcoming energy efficiency reforms

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 SI No 962 (the Regulations) introduces new measures to improve the energy efficiency of certain private rented property in England and Wales.

  • From 1 April 2018: it will be unlawful for a landlord in the private rented sector (PRS) to grant a new domestic tenancy or renew an existing one if the property does not have a minimum energy performance rating of ‘E’ on its Energy Performance Certificate (EPC), subject to prescribed exemptions.
  • From 1 April 2020: it will be unlawful for a private landlord to continue to let a residential property that does not have a minimum energy performance rating of ‘E’ on the EPC, subject to prescribed exemptions. 

The tenancies in scope of the above rules are defined in section 42(1)(a) of the Energy Act 2011 and the Energy Efficiency (Domestic Private Rented Property) Order 2015 SI No 799 and includes assured tenancies and assured shorthold tenancies, regulated tenancies, and agricultural tenancies.

Similar provisions have been introduced in respect of non-domestic private rented properties. Private commercial landlords must not grant new tenancies after 1 April 2018 or continue to let a property after 1 April 2023 if they do not meet the minimum energy efficiency standard, subject to the prescribed exemptions.

Implications for Landlords

PRS landlords must ensure that their properties have an EPC rating of ‘E’ or above before granting new residential tenancies or renewal tenancies from 1 April 2018, or continuing to let a residential property from 1 April 2020.

An EPC is a certificate and report which sets out the energy efficiency rating of a property (from band A to G) and contains information about a property’s energy use and typical costs as well as recommendations for improving its energy efficiency. EPCs are normally valid for 10 years. If the property already has an EPC which is less than 10 years old at the relevant time with an energy efficiency rating of ‘E’ or above, the landlord may let the property and there is no need to obtain a new EPC.

If the EPC does not demonstrate an energy efficiency rating of ‘E’ or above, the landlord should carry out all ‘relevant energy efficiency improvements’ which have been recommended for the property and can be installed at no cost to the landlord. If the energy efficiency rating remains below ‘E’ despite the improvements, the landlord may register for an exemption on the PRS Exemptions Register (see below).

Landlords are only required to make improvements to an ‘F’ or ‘G’ rated property if they can do so at no cost to themselves. Funding can be obtained from a number of sources, including: Green Deal Finance, ECO (Energy Company Obligation) Help to Heat Scheme, local authority and central government funding, other third party sources, or a combination of the above. Further information on funding can be obtained by contacting the Energy Savings Advice Service on 0300 123 1234.

Consequences of Failure to Comply

A private landlord who fails to comply with the above rules when letting a residential property will face a civil penalty of up to £4,000 if he has been in breach for three months or more, or a penalty of up to £2,000 if the breach has taken place for less than three months.

In addition to the financial penalty, the publication penalty shall apply whereby the details of the breach will be published in the national PRS Exemptions Register. A landlord served with a penalty notice has a right to request a review by the local authority and then appeal to the First-tier Tribunal.

The financial penalty in respect of commercial tenancies is significantly higher (up to £150,000).

Local authorities will be responsible for enforcing compliance with the above rules and may serve a compliance notice seeking information from a landlord if they have reason to believe that the landlord is in breach. The landlord must provide the relevant information as requested. Failure to comply with a compliance notice may result in a financial penalty of up to £2,000 and providing false or misleading information on the PRS Exemptions Register may result in a penalty of up to £1,000.


The above rules on energy efficiency standards will not apply in the following circumstances:

  • Relevant Improvements: the landlord has made all of the relevant energy efficiency improvements to the property that can be made but the property remains substandard or no relevant improvements can be made.
  • Cost Exemption: the landlord has been unable to access relevant ‘no cost’ funding to fully cover the cost of installing the recommended improvements.
  • Wall Insulation: it is not appropriate, due to its potential negative impact on the fabric or structure of the property, or the building of which it forms part, for certain wall insulations to be installed.
  • Third Party Consent: consent is required from a third party to carry out the energy efficiency improvements and the landlord has, within the preceding five years, been unable to obtain the relevant consent from the tenant or third parties to carry out the improvement works despite reasonable efforts to seek consent.
  • Property Devaluation: the landlord has obtained a report from an independent surveyor stating that the relevant energy efficiency improvements would result in a reduction of more than 5 per cent in the market value of the property, or of the building of which it forms part.
  • Temporary Exemptions: these temporary exemptions apply where a person recently became the landlord and are set out in full in regulation 33 (e.g. where less than six months have passed since: the grant of a lease pursuant to a contractual obligation; the deemed creation of a new lease by operation of law; the landlord having been a guarantor, or a former tenant, who has exercised the right to obtain an overriding lease of a property pursuant to section 19 of the Landlord and Tenancy (Covenants) Act 1995 etc).

Landlords should register an exemption by opening a user account and providing evidence of why the exemption applies. At present, the PRS Exemptions Register is running as a pilot and landlords who wish to register an exemption should email

Implications for Tenants

The new rules will primarily affect landlords rather than tenants. However, there are a number of options available for tenants who are living in substandard accommodation.

Tenant’s Request: Part 2 of the Regulations provide that tenants residing in a property with an ‘E’ rating or below may serve a notice on their landlord requesting consent to carry out relevant energy efficiency improvements to the property. The landlord cannot unreasonably refuse consent, subject to prescribed exemptions.

HHSRS: If the landlord is unwilling to grant consent to carry out the relevant works, tenants may wish to consider contacting their local environmental health department. The local authority will inspect the property and assess its condition pursuant to the Housing Health and Safety Rating System (HHSRS) provisions under Part 1 of the Housing Act 2004. If the property is in substandard condition, the authority will serve the landlord with an improvement notice or notice of emergency remedial action requiring them to undertake works to the property. For example, the notice may identify that there is a cold health hazard or issues relating to dampness, leaks and mould at the property.

Retaliatory Eviction: Tenants who have signed or renewed their assured shorthold tenancy after 1 October 2015 are afforded further protection by the provisions on retaliatory eviction, pursuant to section 33 of the Deregulation Act 2015. From 1 October 2018, this provision will apply to all assured shorthold tenancies.

The provisions on retaliatory eviction provides that a landlord cannot evict a tenant by serving a section 21 notice in response to a complaint about the condition of the property. The complaint must be in writing unless the tenant does not know the landlord’s address. If a landlord responds to the tenant’s complaint by serving a section 21 notice, does not provide an ‘adequate response’ which describes the action they shall take to address the issue, or does not respond to the complaint at all, the tenant should contact their local authority and request an inspection of the property as above. The local authority will apply the HHSRS and may serve a notice on the landlord requiring improvement works or emergency remedial action to be taken. After receiving such notice, landlords must carry out the repairs identified and cannot serve a section 21 notice on the tenant for a period of six months from the service of the local authority’s notice.

The above provisions are a welcome improvement for tenants as they are designed to raise the standard of accommodation in the private rented sector and reduce energy bills. When read with the provisions on the HHSRS and retaliatory eviction, tenants are provided further protection and may have a potential defence to a claim for possession.



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The Queen in the North

Clara Zang looks at the very recent changes to the private rented sector in Scotland and wonders if England and Wales might ever follow suit.

The Private Housing (Tenancies) (Scotland) Act 2016 (the Act) received Royal Assent on 22 April 2016 and came into force on 1 December 2017. The Act introduces a new type of tenancy, the private residential tenancy, which replaces the short assured tenancy and assured tenancy scheme for all future lets in Scotland starting on or after 1 December 2017. Existing assured and short assured tenancies will not convert automatically into private residential tenancies and will continue to take effect under the previous legislation until they are terminated.

What is a Private Residential Tenancy?

A tenancy starting in Scotland on or after 1 December 2017 will be a private residential tenancy if:

  • A property is let to an individual as a separate dwelling,
  • the tenant occupies the property (or any part of it) as his only or principal home, and
  • the tenancy is not one which is excluded under Schedule 1 to the Act (e.g. holiday lets, agricultural land, licensed premises etc).

A model tenancy agreement and guidance is available to download from the Scottish government website. The parties are not required to use the model agreement but the agreement used must include the mandatory clauses highlighted in bold in the model agreement. Section 10 of the Act puts landlords under a duty to provide tenants with the written terms of the tenancy no later than the day on which the private residential tenancy commences or, if the tenancy only later becomes a private residential tenancy, within 28 days of it becoming one.

The Act also creates a new tribunal, the First-tier Tribunal for Scotland (Housing and Property Chamber), which will deal with all disputes relating to private residential tenancies. This is a welcome change as it will enable specialist tribunal members to deal with tenancy matters quickly and efficiently.  The sheriff courts will continue to deal with existing assured and short assured tenancies.

Increased Protection and Security for Tenants

The Act provides levels of protection and security for private tenants, which far exceeds the rights of assured shorthold tenants in England.

Indefinite security of tenure: The private residential tenancy provides tenants with indefinite security of tenure by creating an open-ended tenancy with no fixed term.

Longer Notice periods: Tenants can terminate the tenancy at any time by giving 28 days’ notice to leave. Where there is a joint tenancy, all tenants must sign the notice to leave. On the other hand, landlords can only terminate the tenancy if they satisfy one of the 18 grounds listed in Schedule 3 to the Act. Further, landlords must give 28 days’ notice to terminate the tenancy within its first six months and 84 days’ thereafter.

Landlords are only required to give 28 days’ notice to terminate regardless of the tenancy start date if they are seeking to evict the tenants on grounds of:

  • failure to occupy the property as their only or principal home,
  • breach of tenancy agreement, rent arrears for three or more consecutive months,
  • relevant criminal conviction,
  • relevant anti-social behaviour, or
  • association with a person who has a relevant conviction or has engaged in relevant anti-social behaviour.

Grounds for terminating: Schedule 3 of the Act sets out the following 18 grounds under which landlords may seek eviction.

  1. The landlord intends to sell the property for market value within three months of the tenant ceasing to occupy it. (Mandatory)
  2. The property is to be sold by the mortgage lender. (Mandatory)
  3. The lender intends to refurbish the property and which will entail significantly disruptive works. (Mandatory)
  4. The landlord intents to live in the property as their principal home. (Mandatory)
  5. Members of the landlord’s family intends to live in the property as their only or principal home. (Discretionary)
  6. The landlord intends to use the property for a purpose other than providing a person with a home. (Mandatory)
  7. The property is held for a person engaged in the work of a religious denomination as a residence from which the duties of such a person are to be performed; the property has previously been used for that purpose; and the property is required for that purpose. (Mandatory)
  8. The tenancy was granted to an employee and the tenant is no longer an employee. (Mandatory if application for eviction is made within 12 months of the tenant ceasing to be an employee and discretionary if the application is made after 12 months.)
  9. The tenancy was entered into on account of the tenant having an assessed need for community care and the tenant has since been assessed as no longer having such needs. (Discretionary)
  10. The tenant is not occupying the let property as their only or principal home. (Mandatory)
  11. The tenant has breached the tenancy agreement (excludes the payment of rent). (Discretionary)
  12. The tenant is in rent arrears. (Mandatory if the tenant has been in arrears continuously for three months or more, and on the day the tribunal considers the case, the arrears were at least one month’s rent. The tribunal must also be satisfied that the arrears were not due to a delay or failure in the payment of a relevant benefit. This ground is discretionary if the tenant has been in arrears of rent for three or more months, and on the first day the tribunal considers the case, the arrears are less than one month’s rent and the tribunal is satisfied that it is reasonable on this basis to issue an eviction order.)
  13. After the tenancy has begun, the tenant is convicted of using, or allowing the use of, the let property for an immoral or illegal purpose, or is convicted of an imprisonable offence committed in or in the locality of the let property. (Mandatory)
  14. The tenant has acted in an anti-social manner to another person and the tribunal is satisfied that it is reasonable to issue an eviction order. (Discretionary)
  15. The tenant is associating in the let property with a person who has a relevant conviction or who has engaged in relevant anti-social behaviour. (Discretionary)
  16. Landlord registration has been refused or revoked by a local authority. (Discretionary)
  17. House in Multiple Occupation (HMO) license revoked by the local authority. (Discretionary)
  18. Overcrowding statutory notice in respect of the property has been served on the landlord. (Discretionary)

Rent Increases: Rent increases will only be allowed once every 12 months and landlords must follow the process set out in section 22 of the Act. This provides that landlords must give a rent-increase notice and the notice period must be 3 months or whatever longer period has been agreed between them and their tenants. Tenants may contest a proposed rent increase that think it is too high by referring the case to a rent officer for adjudication. Section 35 also provides that local authorities may make an application to designate all or part of their area as a rent pressure zone. Rent increases will be capped at the amount calculated by the Scottish Ministers if the tenancy relates to a property that is situated in a ‘rent pressure zone’.

Comparison with Assured Shorthold Tenancies

The Scottish private residential tenancy is a stark contrast to the assured shorthold tenancy regime that applies in England and Wales pursuant to the Housing Act (HA) 1988. Under HA 1988, assured shorthold tenants do not enjoy long-term security of tenure and HA 1988 s21 provides landlords with a powerful tool for evicting tenants upon expiry of a fixed-term assured shorthold tenancy by serving a notice without providing any reasons or grounds for doing so. Courts must grant the landlord an outright possession order as long as the relevant procedural requirements have been met, unless it will cause exceptional hardship to the tenant, in which case the court may postpone the date of possession for up to six weeks.

There are currently no proposals in place for such major reforms to the assured shorthold tenancy scheme in England and Wales. Although there have been a number of recent changes which have provided tenants with some additional security (e.g. tenancy deposits, retaliatory eviction, procedural restrictions on a landlord’s ability to serve a notice to terminate a tenancy under  HA 1988 s21), these are not nearly as ambitious as the Scottish reforms.



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