Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

EPC Directive Changes

The European Commission, the primary legislative body of the EU, has put forward proposals to make changes to the Energy Performance of Buildings Directive (EPBD). CLG has published a consultation on the proposals to allow it to reflect the views of UK stakeholders back to the commission.

The proposals are in two categories. The first stage, which UK government supports seeks to clarify and simplify the directive. The other part seeks to expand and strengthen the directive. The UK government is largely opposed to this, in common with its general policy on Europe, and takes the view that many of the issues should remain with member states under the general principle of subsidiarity.

Looking at the key proposals they are as follows:

  • buildings occupied by public authorities or where the public visit regularly are to have a Display Energy Certificate on display where the building is larger than 250 sq m as oppose to the current size of 1000 sq m;
  • any commercial or domestic building which is renovated will also have to have its energy performance upgraded at the same time for which targets will be set;
  • there will be minimum requirements for technical building systems such as boilers in commercial property.

Naturally this will cause increased costs for many older properties.  However, given the impact of empty building rates on commercial property and the consequent knocking down of some of these properties the impact may well be small.  In residential properties properties being renovated will have to have their performance improved but this would probably be done in the majority of renovations anyway.

The consultation is open for responses until 2 October 2009.

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RTM Company Articles

The government is consulting on new default articles for Right To Manage (RTM) companies formed under the Commonhold and Leasehold Reform Act 2002.

It is debateable whether such changes are really necessary. All companies can choose to set up their own articles when they are created. However, many RTM companies are created on the fly by inexperienced individuals and so the creation of some form of pre-defined articles for these companies might be advantageous. It is also worth pointing out the low take-up of the powers offered by the Act and the arguable pointlessness of legislating where the advantage is so limited.

The model articles aim to provide a degree of balance between the rights of tenants and the needs of landlords who have a greater investment in the structure of the property and the common parts. How well that balance is struck probably depends on the side from which you approach the issue. It is difficult though to see how a pre-defined set of articles can properly take account of the large number of different RTM situations and whether there should be a greater emphasis on each RTM company choosing articles to fit its own situation.

The consultation is open until 16 August.

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Mortgage Possession and Tenants

We have previously discussed the problems experienced by tenants when a mortgagee seeks to repossess the property to exercise its power of sale. In a recent alteration to the Civil Procedure Rules some of the issues were addressed by forcing mortgagees to give more notice to occupiers of properties. We reported on this here.

However, providing more notice does nothing to protect tenants whose landlord has not bothered to seek the consent of their mortgagee to the letting. Where the landlord has sought consent the mortgagee is obliged to see out the term of the letting. Non-authorised tenants are not so protected and get short shrift from mortgagees and the Courts. Of course, tenants should always insist on seeing consent to their letting from the mortgagee but this will not help those who find themselves under threat of eviction today.

The government has now produced a consultation on further changes to the process of mortgage eviction in order to help protect unauthorised tenants.

Apparently the government are working with lenders to remind them that they are obliged to see out tenancies which they have consented to and to encourage them to accept unauthorised tenants where possible. We have not seen a great deal of evidence that this engagement is actually working with the worst offenders being Northern Rock and other lenders taken into government control!

The other intended improvement is to make notification to tenants of problems more effective by requiring the letter that is currently addressed to “The Occupiers’ to make specific mention of tenants on its face. This is to come into force in October 2009.

Turning back to unauthorised tenants the consultation intends to achieve a balance between reasonable notice to the tenant and the right of the mortgagee to sell the property with vacant possession. The aim is to allow the tenant two months notice to vacate.

There are a series of different proposals for how this might be achieved ranging from no change through to radical legislative amendment.

There are some real problems with this consultation. For on the government appears to have absolutely no idea how many tenants are affected. They estimate that there are approximately 360,000 properties with unauthorised tenancies but this figure is plus or minus 120,000 which shows the level of uncertainty.

In fact, it is not clear precisely how the government will deal with the situation as a change to assist unauthorised tenants would, in practice, have to be applied in all circumstances where mortgage possession is considered, adding considerably to the cost of mortgage repossession for lenders at a time when they can ill-afford it.

Probably the most practical option is to imporve notification and allow the tenants to attend Court to seek a stay of possession before the judge. Obviously this has the same disadvantage as the current system in that many tenants do not have the knowledge or the desire to attend a Court hearing. Therefore any change is going to have to make the process as painless as possible for those who are, after all, innocent parties. The best option is probably a form sent to the tenant by the lender which permits them to make written representation to the Court.

The consultation is open for responses until 14 October 2009.

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TDP and Prescribed Information

It has come to our attention that many agents are still not providing all the necessary prescribed information to tenants on the registration of deposits under the various tenancy deposit protection schemes. Section 213(5) of HA 2004 requires that the tenant is given such information as may be prescribed. Section 216(b) requires that this is given within 14 days of the receipt of the deposit. There is still a lot of debate as to whether there is any penalty for the giving this information late.

The information required to be handed over is set out by the Housing (Tenancy Deposits) (Prescribed Information) Order 2007. Provision of the tenancy agreement and the information certificate supplied by all of the schemes will satisfy most f the requirements of this Order. However paragraph 2(1)(b) requires the provision of

any information contained in a leaflet supplied by the scheme administrator to the landlord which explains the operation of the provisions contained in sections 212 to 215 of, and Schedule 10 to, the Act

Both the insured schemes (TDS & MyDeposits) provide such leaflets and they must be passed on to the tenant to comply with the terms of the Order. This provision is frequently being ignored but failure to fulfil it properly may lead to the usual penalties being applied.

You have been warned!

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