Dangers Of Rent Repayment Order – Housing and Planning Act 2016

Cartoon male standing next to a house holding a suitcase in one hand and screwdriver in the other.

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!

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