Increasing regulation of the private rented sector means that landlords of residential property in England need to be aware of their extensive obligations towards tenants.

In particular, a failure by a landlord to comply with certain ‘pre-letting requirements’ could have serious implications, including not being able to serve notice  to obtain possession of the property.

The pre-letting requirements were introduced  to provide greater protection to those who rent their primary residence, and to crack down on rogue landlords who unfairly exploit the market.

The pre-letting requirements are contained in a complex myriad of legislation. Broadly, there are four key obligations on landlords.

  1. Deposit protection

    If a deposit is taken, it must be registered with one of the government approved deposit protection schemes and the initial requirements of the chosen scheme must be complied with within 30 days of receiving the deposit.

    Additionally, prescribed information in relation to the deposit must be given to the tenant. This includes generic information about the scheme and specific information about the deposit and the tenancy.

  2. Energy Performance Certificate (EPC)

    Although there are various other obligations on landlords in relation to EPCs (e.g. to make the EPC available to anyone who views the property), the only one specified as a pre-letting requirement (and which can invalidate a later section 21 notice to obtain possession of the premises) is the obligation to ensure the EPC is given to the person who ultimately becomes the tenant.

  3. Gas safety

    If the property has gas appliances, the landlord must provide the tenant with a copy of the latest gas safety certificate issued in respect of each appliance (which must be no more than 12 months old) before the tenant occupies the property. For a new tenancy, the certificate must be provided prior to the tenant occupying the property. The landlord must also provide a copy of each annual gas safety certificate to the tenant within 28 days of the check.

  4. How to Rent Guide

    The landlord must ensure that a copy of the latest version of the government’s guide “How to rent: the checklist for renting in England” (How to Rent Guide) is provided to the tenant. The How to Rent Guide sets out the various rights and obligations of each party and makes it clear to the tenant what the landlord's responsibilities are. There is no express reference to the timescale within which the How to Rent Guide must be provided.

Put simply, if landlords do not comply with the pre-letting rules, it is much more difficult for them to deal with their properties.

  • A landlord could be restricted from ending a tenancy or obtaining possession at the end of the term.
  • It will impact on the landlord’s ability to sell or refinance the property in the future - both a buyer and a lender will want to be sure that they have the means to obtain vacant possession of the property.

The answer depends on the specific breach that has taken place and, in some cases, is laced with uncertainty.

  • A failure to protect the deposit with an authorised scheme cannot be remedied by protecting the deposit after the 30-day period has expired. Such a breach could only be remedied by returning the deposit to the tenant. It is therefore crucial that this is complied with properly at the start of a tenancy, as returning a deposit to the tenant before possession is sought leaves the landlord without any security for non-payment of rent or damage to the property. Further, a court could award compensation to be paid by the landlord to the tenant up to three times the amount of the deposit if the landlord is found to be in breach of the deposit protection requirements. A landlord may consider returning the non-compliant deposit and taking a fresh deposit, which is then protected within 30 days of receipt, but this approach has not been tested in court.

  • What if, the deposit has been protected in an authorised scheme, but the prescribed information in relation to it has not been given to the tenant? The legislation suggests such a breach is capable of being remedied after the start of the tenancy agreement but before service of a section 21 notice, but at present there is no court ruling to confirm this.

  • What if the gas safety certificate hasn’t been provided? The case of Trecarrell House Limited and Rouncefield was heard in the Court of Appeal in July 2020, and ruled that the landlord was able to remedy a breach where the gas safety certificate had not been provided before the tenant took occupation, and the landlord was not permanently barred from serving a termination notice. In this particular case, it is key to note that there was a valid gas safety certificate in place when the tenant took occupation, it was simply an administrative error on the part of the landlord that it was not passed on to the tenant. We do not know if the outcome would have been the same, had the landlord not carried out the check, or if the check had failed and/or the landlord had not carried out the required repairs. We suspect the courts would take a dim view of the latter scenarios.

  • The How to Rent Guide - There is no reference in the legislation to the timescale within which the How to Rent Guide must be provided, so it might appear that a failure to comply with this requirement at the start of a tenancy can be remedied at any time before service of a section 21 notice. However, this has not been tested in court and there may be additional problems to overcome. For example, where the How to Rent Guide is served late, it is not clear whether the landlord should serve the current version or any earlier version which applied at the time the tenancy started. A way round this problem may be to serve both versions, but there may be a practical issue if the old version is not available.

  • Provision of an EPC - There is no authority on whether a failure to provide an EPC before the start of the tenancy is capable of being remedied late, to allow the landlord to serve a section 21 notice. The legislation simply refers to an obligation to “ensure that a valid energy performance certificate has been given free of charge to the person who ultimately becomes the buyer or tenant” with no reference to a timescale. This may indicate that such a breach would be capable of remedy, but again this has not been tested. Landlords should also remember that it is unlawful to grant a new tenancy (or continue to let) a property with an EPC rating of below E unless an exemption has been validly registered. You can read more about these minimum energy efficiency standards on our MEES Hub.

 

There are also further implications for a landlord. Depending on the nature of the breach of the regulations there are both civil and criminal penalties that can apply, and compensation may be awarded to a tenant in certain circumstances if their landlord is found by the courts to be at fault.

Additional obligations also apply in respect of fire and electrical safety, right to rent checks, fitness for human habitation and the fees that can be charged in connection with a tenancy.

Given the uncertainty surrounding the ability for landlords to remedy a breach of the pre-letting requirements, it is absolutely vital that a landlord gets it right at the outset of the tenancy, in order to avoid the potentially serious consequences of non-compliance. Compliance should also be evidenced clearly, so that future buyers or lenders can be satisfied. How can this be achieved?

  • A specific reference in the tenancy agreement itself which includes copies of all of the pre-letting requirement documents, with an acknowledgement by the tenant that they have received those documents. A copy of that tenancy agreement (signed by the tenant) is strong evidence that the tenant has received the documents and thus that the regulations have been complied with.

  • Written evidence that the documents were sent to the tenant, with a date stamp. For example a letter or an email to the tenant with those documents attached (and in the case of a letter, proof of delivery) can provide evidence that the documents were provided within the correct time frame.

  • Failing either of the above, a written acknowledgement by the tenant that they received the necessary documents within the requisite timeframe. This would of course depend entirely on (a) whether the landlord did actually provide them on time and (b) the landlord’s relationship with the tenant.

The rules around obtaining possession of residential property have been heavily affected by emergency COVID-19 legislation.

From 1 June 2021 until 30 September 2021, a section 21 notice must give tenants at least four months' notice of the fact that the landlord requires possession. Also, a section 21 notice cannot be served which specifies a termination date that is less than 6 months from the commencement of the tenancy and, unless there is a break clause, the notice cannot expire before the end of any fixed period of the tenancy has come to an end.

The default position, if there is no further legislation, is that the notice period for a section 21 notice will revert to two months on 1 October 2021, but it is impossible to rule out further changes or an extension of the current arrangements.

There remains a significant backlog of possession claims in the courts following a stay on possession proceedings, which was lifted on 21 September 2020, and the government has asked bailiff associations not to enforce possession orders where anyone in the household has COVID-19 symptoms or is self-isolating.

TLT has extensive experience in dealing with landlord and tenant matters in respect of both commercial and residential properties. If you would like to discuss, please get in touch.

Contributor: Matt Battensby

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at July 2021. Specific advice should be sought for specific cases. For more information see our terms & conditions.

Written by

Stephanie Yates

Stephanie Yates

Date published

21 July 2021

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