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Dangers Of Rent Repayment Order – Housing and Planning Act 2016

Some sections of the Housing and Planning Act 2016 came into force today.  The media will give a lot of attention to the fact that local authorities will be able to charge landlords Civil Penalties of up to £30,000 without court action and the fact that Tenancy Deposit Protection schemes must now share the landlords information.

In my opinion THE single most dangerous power, which came into force today, is that which enables a tenant to go for a Rent Repayment Order from a landlord who has committed an offence which is covered by this legislations. Many landlords are committing such an offence but they are unaware of the potential consequences.

Cartoon male standing next to a house holding a suitcase in one hand and screwdriver in the other.
Sections of Housing and Planning Act 2016 came into force today, that enables tenants to go for a rent repayment order if landlord has committed an offence.

First what does the new legislation mean?

Extended Rent Repayment Orders

Rent repayment orders, which can be issued to penalise landlords managing or letting unlicensed properties, have also been extended to cover a wider range of situations.

Rent repayment orders are being extended to cover the following situations:

  • Failure to comply with an Improvement Notice under section 30 of the Housing Act 2004;
  • Failure to comply with a Prohibition Order under section 32 of the Hosing Act 2004;
  • Breach of a banning order made under section 21 of the Housing and Planning Act 2016;
  • Using violence to secure entry to a property under section 6 of the Criminal Law Act 1977; and
  • Illegal eviction or harassment of the occupiers of a property under section 1 of the Protection from Eviction Act 1977

The Statutory Guidance, published on 6th April 2017 is here:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/606654/Rent_Repayment_Orders_guidance.pdf

The Protection from Eviction Act 1977 Section 1 is here http://www.legislation.gov.uk/ukpga/1977/43

Under Section 1 of this Act:

(3A) Subject to subsection (3B) below, the landlord of a residential occupier or an agent of the landlord shall be guilty of an offence if—

(a) he does acts likely to interfere with the peace or comfort of the residential occupier or members of his household, or

(b) he persistently withdraws or withholds services reasonably required for the occupation of the premises in question as a residence,

(3B) A person shall not be guilty of an offence under subsection (3A) above if he proves that he had reasonable grounds for doing the acts or withdrawing or withholding the services in question.

Why do I believe that landlords and letting agents will be vulnerable to a Rent Repayment Order under this section of the legislation?

Thousands of landlords now offer “all inclusive” rents when renting their house out. The term “all inclusive” refers to the supply of gas and electricity, including heating and hot water. If that landlord then controls the heating via an app or other remote controlled system the tenants are deprived of their legal rights:

The minimum heating standard is at least 18°C in sleeping rooms, and 21°C in living rooms, when the temperature outside is minus 1°C and it should be available at all times.

The Housing Act 2004 introduced the Housing Health and Safety Hazard Rating System which is the method a local authority uses to judge the fitness of a rented property. The full guide is here

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/9425/150940.pdf

No 2 of the hazards which are listed is Excessive Cold

“What about flats and HMOs? Centrally controlled space heating systems should operate in a way that makes sure occupants are not exposed to cold indoor temperatures. Occupants should be allowed to control temperature within their dwelling

Finally Consumer Rights Act 2015:

PART 1 CONSUMER CONTRACTS FOR GOODS, DIGITAL CONTENT AND SERVICES CHAPTER 1 INTRODUCTION 1

Where Part 1 applies

(1) This Part applies where there is an agreement between a trader and a consumer for the trader to supply goods, digital content or services, if the agreement is a contract.

(2) It applies whether the contract is written or oral or implied from the parties’ conduct, or more than one of these combined.

Information about the trader or service to be binding (1) Every contract to supply a service is to be treated as including as a term of the contract anything that is said or written to the consumer, by or on behalf of the trader, about the trader or the service, if— (a) it is taken into account by the consumer when deciding to enter into the contract, or (b) it is taken into account by the consumer when making any decision about the service after entering into the contract.”

http://www.legislation.gov.uk/ukpga/2015/15/pdfs/ukpga_20150015_en.pdf

In conclusion where a property is offered for rent on an “all inclusive” basis it must be ALL INCLUSIVE, not “including the amount of heat and/or at times that the landlord or agent decides that is it appropriate.” which will be taken out of the control of the tenants/consumers. If tenants have rented a property on an “all inclusive” basis and they then find that the heating is not within their control they will easily find No Win No Fee solicitors who are very willing to take action against the landlord or agent to recover the rent on a Rent Repayment Order.

There are two options

  1. Don’t offer all inclusive rents
  2. Do not take away the tenants control of the heating. Put a well worded “Fair usage” clause in your tenancy agreements which enables you to make an additional charge for more than the allowed usage and refund any under spend to the tenants.

A final note only the companies which have a licence to resell gas and electricity can make a profit, a landlord or agent cannot resell utilities to tenants at a profit. The details of who can resell and their licence conditions are here:

https://www.ofgem.gov.uk/licences-codes-and-standards/licences/licence-conditions

An administration charge can be made where sub meters are fitted in a property but this must be noted in the tenancy agreement and the charge must be separate from the charge for the supply.

Landlords we are in enough trouble trying to keep up with the constant changes to legislation and regulation why risk a Rent Repayment Order for something that can be avoided?

About the author, Mary Latham

Questions or comments for Mary? Please post below!

About Mary Latham

Mary has been a landlord since 1972, letting all types of property to most client groups and carrying out much of her own refurbishment.

She was founder and Chair of the Association of Midlands Landlords where she ran a help line for landlords for 9 years, until AML joined The National Landlords Association in 2007 and she became the West Midlands Regional Representative for NLA.

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Dangers Of Rent Repayment Order - Housing and Planning Act 2016
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Dangers Of Rent Repayment Order - Housing and Planning Act 2016
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Sections of Housing and Planning Act 2016 came into force today, that enables tenants to go for a rent repayment order if landlord has committed an offence.
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8 Comments

    August 11, 2018 REPLY

    Where heating is supplied to private flats via a central boiler is it correct they can switch the heating off totally for summer months and flat tenants then have no access to heat the flat from the boiler

    April 11, 2017 REPLY

    Hi Mary
    I have 2 HMO’s that use the inspire landlord thermostat which has a boost button which allows tenants to put the heating on anytime they like outside of the set hours. The everyday temp is set at 21 degrees and there are trv’s on all radiators. In your opinion am I still liable for prosecution. Many thanks

      April 13, 2017 REPLY

      HI Ian my article was not about prosecution is about tenants being able to claim a rent repayment order if they feel that their legal rights under the relevant section of the Protection from Eviction Act 1997 have been breached. I don’t know enough about how Inspire works to give an opinion you need to read the legislation and make sure that the system fits in with the legal requirements

    April 10, 2017 REPLY

    Hi Mary, What’s your view on thermostat’s that can are tamper proof however, they can the tenants can still raise the temp by 2 degrees and lower as much as they want? I manage a few properties with these in. Thanks Nicole

      April 13, 2017 REPLY

      Hi Nicole, I am not sure what you mean by tamper proof? If this means that tenants cannot control them, they might feel that you are removing their legal rights.

    April 7, 2017 REPLY

    I have a house converted into 2 studios and 2 one bedroom flats. Five years ago I put in central heating with one boiler serving all the flats as it was the best way to heat the property. All my tenants are told the terms of the heating included in the rent. On from 1st October to 30th April, 7 hours daily Mon to Fri., 14 hours weekend, thermostat​ at 23 regs. Heaters also supplied if they want them but they pay for the electricity. I explain the above to them and tell them that if they work unusual hours, i.e. shift work that means they would be at home during the weekday, then maybe the property wouldn’t suit them as they would have to pay for heating during the day. Are you now saying that I am breaking the law and my tenants could reclaim rent from me? This is very worrying. I felt I was doing the best thing in this Victorian house. Each flat is too small to have individual CH boilers and electric CH is very expensive for the tenant. If what you say is true there may be 4 more flats leaving the rental market.

      April 10, 2017 REPLY

      Hi Patricia, This is a complicated one. I am assuming that since your tenants pay the electricity you do not market this property as all inclusive in which case that is one piece of legislation out of the way. You should include a Fair Usage clause in all of your tenancy agreements to cover the amount of units that you include (as per the details you have given above) You then need to enable the tenants to discuss any changes that all want to make to the timings of the heating on the basis that they will all share any extra costs. They then need access to the heating system so that they can control it. This is going to be far more difficult in this situation than it would be in a shared HMO and honestly I can see how difficult it will be to get them all to agree. You may be lucky and they all agree to the same timings but just how to prevent one tenant changing the timings without agreement with the others I really don’t know. I assume that each unit has TRVs on the radiators so that they can control the temperature in that unit but they can only do that if the boiler is providing heat when they want it. I wish I had a better solution but I have to be honest and say I don’t know what I would do in this situation. I’m sorry

    April 7, 2017 REPLY

    Are all the no’s single lets and the yesses HMO’s?

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