11th December 2018
What could The Homes (Fitness for Human Habitation) Bill mean for landlords?
The Homes (Fitness for Human Habitation) Bill (“the Bill”) had its second reading in the House of Lords on 23 November 2018 and received a lot of support.
In short, the Bill consists of two elements: (1) it amends the Landlord & Tenant Act 1985 in relation to England; and (2) deals with s.8 of the Landlord & Tenant Act 1985 in relation to Wales. This summary deals only with the effects the Bill has in relation to residential property in England.
The purpose of the Bill is to amend the Landlord and Tenant Act 1985 (“the Act”) so as to:
- improve the standard of housing in the private and social rented sectors; and
- to give tenants the right to take direct legal action requiring their landlord to rectify a defective property.
The Bill proposes to make it an implied covenant within a tenancy agreement that a landlord ensures that the property is fit for human habitation at the commencement of the tenancy and throughout its term. By doing this, should a property not be fit for human habitation, the tenant could take direct action against its landlord for breach of contract.
The Bill amends the definition of fitness for habitation within the Act, by applying the housing health and safety rating system contained within section 2 of the Housing Act 2004 (“the Rating System”).
In summary the proposals introduce new sections 9A, 9B and 9C (which implies a covenant within the tenancy agreement that the property is fit for human habitation at the time the lease is granted and for the duration of the lease) together with a new section 10:
- Section 9A extends the landlord’s duties to also include common parts of buildings where they have an estate or interest.
- Section 9B provides that section 9A will apply to leases of less than seven years or in the case of assured shorthold tenancies, a fixed term of seven years or more.
- Section 9C sets out that section 9A would apply to certain dwellings occupied by agricultural workers in England.
- Section 10 of the Act would be amended so that the standards contained within the Rating System will be the standard applied when assessing if a property is fit for human habitation.
What could this mean for landlords?
- At present an offence is only committed when a landlord fails to comply with a local authority environmental health enforcement notice under the Housing Act 2004. Action is taken by the local authority. However, the Bill’s proposals will enable a tenant to take direct action against a landlord, for breach of contract, where the property is found not to be fit for human habitation.
- Currently, a Landlord who is renting out a flat within a building is only responsible for the flat itself. However, the Bill provides that the landlord’s area of responsibility would include the common parts such as stairs and lifts. This could mean that a landlord who has rented out a flat within a building has the additional burden of ensuring that a superior landlord/freeholder complies with its repairing covenants in relation to the common parts.
- Social landlords are currently not liable as, effectively, this would require the Council taking action against itself. As the tenant would have the right to commence action, the Bill will therefore enable the tenant to take action against its landlord regardless of whether it is a private landlord or a social landlord.
- Section 9A of the Act would however provide for certain exemptions to the landlord’s liability under the implied covenant including:
- carrying out works or repairs for which the tenant is liable;
- rebuilding or reinstating the property in the case of its destruction; or
- carrying out of works requiring consent from a 3rd party that was requested but not obtained.
A letter to the House of Lords accompanying the Bill stated that a guidance document for tenants would be published once the Bill completes its passage. This document would explain to tenants’ their rights and how to commence proceedings, themselves, if necessary.
A further update will be released once the Bill passes through the Committee and Report stages of the House of Lords.