Part 1: Landlords behaving badly

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Landlords behaving badly

The worst examples of landlords breaching their obligations (and behaving badly) are as follows:

1. Charging prohibited fees

2.Not registering Houses in Multiple Occupation (HMOs)

3.Renting properties which are unfit for habitation

4.Not returning deposits

*Disclaimer: independent legal advice is always encouraged if pursuing any of these claims as a tenant.*

The relationship between landlord and tenant is complex and one of the oldest and most fragile illustrations of imbalance of power. Historically this relationship originated from Roman times and became common from around the 5th century onwards. As a result, peasants became bound to the land and dependent on their landlords for protection and a basic form of justice. Today, many tenants never meet or know their landlords. However, as tenants, they have rights and obligations in respect of the ‘land’ they occupy.  

Having lived in numerous properties in a number of cities in the UK during my 8 years as a tenant, I have encountered my fair share of landlords, each with their own style of management and accessibility when it comes to property queries. Tenants also display a range of behaviours and personal responsibility when it comes to renting the property. For many, especially those newly starting out, it’s trial and error for both sides, with each never quite knowing how responsible the other party will be.

This article explores the worst examples of how landlords can behave badly, looking at common complaints that tenants have and the legal recourse available to resolve these issues.

In the spirit of fairness and balance when reviewing this relationship, next week the issue of ‘bad tenants’ will be explored.

Landlords’ Obligations

The most common type of tenancy when renting from a private landlord or letting agent in England and Wales is an assured shorthold tenancy (“AST”).  An AST allows a landlord to let out a property to a tenant while retaining the right to repossess the property at the end of the tenancy. This can be done on a fixed term basis (6 months or a year) or a rolling basis (indefinite).

A landlord is responsible for the following main obligations:

1. keeping rented properties safe and free from health hazards
2. making sure all gas and electrical equipment is safely installed and maintained
3. providing an Energy Performance Certificate for the property
4. protecting your tenant’s deposit in a government-approved scheme
5. checking your tenant has the right to rent your property (if it’s in England)
6. giving the tenant a copy of the ‘How to rent checklist’* when they start renting

Any breach of these obligations is illegal and can be dealt with through legal recourse. However, there are multiple other ways landlords and letting agents can ‘behave badly’.

Prohibited Fees

Issue

Some letting agents or private landlords are charging a ‘finder’s fee’ for locating and showing prospective tenants around numerous properties. This can take place through ‘application forms’ like this one advertised on Spacelet.net*, where they ask renters to pay a fee in order to access their services. This may also take place once deciding to sign a tenancy, where landlord or agents add on their ‘fees and charges’ to a requested deposit. This type of activity is now illegal since the implementation of the Tenant Fees Act 2019, which states that ONLY the following fees are chargeable by landlords/letting agents to tenants:

• the rent
• a refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above
• a refundable holding deposit (to reserve a property) capped at no more than one week’s rent
• payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher
• payments associated with early termination of the tenancy, when requested by the tenant
• payments in respect of utilities, communication services, TV licence and council tax; and
• A default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement

Any other charges or fees are ‘prohibited payments’ and illegal.

Solution

If you are asked to pay a prohibited payment – don’t! You’re under no legal obligation to pay this and you can report these agents to the ‘Rogue Landlord Checker’ and your Trading Standards Authorities.

If you’ve already paid these fees and your tenancy began on or after 1^st June 2020, you can request any fees to be returned to you by the end of your tenancy through the First Tier Tribunal. A landlord is also unable to evict you (through a s21 notice) unless these ‘prohibited fees’ have been repaid.  For more guidance on this issue, please find the handy government guide for tenants.

Houses in Multiple Occupation

Issue

In 2016, the Housing and Planning Act 2016, introduced the idea of Houses in Multiple Occupation (“HMO”) in a bid to assist reform of the housing management and planning process, and tackle rogue landlords who flouted said process.

Houses in multiple occupation exist if:

• at least 3 tenants live there, forming more than 1 household
• the tenants share toilet, bathroom or kitchen facilities

Large HMOs exist if there are at least 5 tenants living there. Households include single people or members of the same family.

Key examples of HMOs are house conversions into bedsits, shared homes and student accommodation.

The point here, is that a landlord will have extra obligations if owning an HMO. These are as follows:

• proper fire safety measures are in place, including working smoke alarms
• annual gas safety checks are carried out
• electrics are checked every 5 years
• the property is not overcrowded
• there are enough cooking and bathroom facilities for the number living there
• communal areas and shared facilities are clean and in good repair
• there are enough rubbish bins/bags

HMOs must also be licensed with the local council (unless they are managed or owned by a housing association or co-operative, a council, a health service or a police or fire authority). If any of these obligations are breached, tenants have a claim.

Solution

A remedy available to a tenant in these circumstances would be to seek rent to be repaid by the landlord, known as a ‘Rent Repayment Order’. This can be paid directly back to the tenant or if using Universal credit, paid to the local housing authority in respect of rent under the tenancy. Tenants can apply for RROs at the First Tier Tribunal and can be paid an amount which covers ‘a period, not exceeding 12 months, during which the landlord was committing the offence’. However, as decided in the Upper Tribunal in February 2021, a tenant can only obtain more than one rent repayment order, even if their landlord had committed more than one specified offence Ficcara and others v James [2021] UKUT 38 (LC)

Unfit properties

Issue

Over the years, there have been numerous reports and investigations into ‘squalid housing’ with tenants reporting that some landlords are refusing to carry out essential works to ensure their property is safe to live in. Issues can include Rats, mouldy walls, exposed electrical wiring, leaking roofs, broken windows etc…

However, on 20 March 2019 the Homes (Fitness for Human Habitation) Act 2018 came into force to ensure that rented houses and flats are ‘fit for human habitation’. The Act states that properties should be safe, healthy and free from things that could cause serious harm. Where landlords fail to meet their obligations, tenants will be able to take legal action for breach of contract, the Ministry of Housing said.

(This issue will be explored fully in an upcoming blog post which focuses solely on Repairs).

Solution

Tenants should always report issues to landlords as soon as discovered, keeping a record of the conversation. The landlord then needs to have access to the property in order to fix the issue ‘in a reasonable amount of time’. If such requests are refused, tenants can begin a claim in the courts, collecting photos and evidence and attending a hearing. If the judge accepts that an unfit property has been rented out, he or she may order the landlord to improve conditions in the property. They may also make landlords pay compensation to tenants.

For more information on this process and for examples of what may constitute as an ‘unfit property’, please see the Government guidance here.

Deposit return

Issue

Deposit disputes are one of the most common issues between landlords and tenants. If you have an AST and the landlord asks for a deposit, they are required to place the full amount in a government-approved tenancy deposit scheme (provided the tenancy started after 6 April 2007), within 30 days of receiving the funds. This ensures your deposit is protected and will be returned to tenants provided they:

• meet the terms of their tenancy agreement
• don’t damage the property
• pay their rent and bills

However, there are landlords who breach these obligations, either by failing to use a deposit scheme in the first place or use spurious or unsubstantiated reasons in attempts to cut down the deposit.

Solution

If the tenant has attempted to resolve the issue directly with the landlord and it remains unresolved, there are two main solutions for dealing with deposit issues. The first is to go through the deposit scheme ADR service (Alternative Dispute Resolution) in order to make a claim. This service is free but requires claimants to provide evidence and ask an independent arbitrator to decide on how much, if any, of the deposit should be returned.

I have had my own experience of this process, which was bittersweet. It resulted in nearly all of the deposit being returned, although it took a lengthy 6 months from issuing the claim and required time and effort to prepare evidence. The second route is through the small claims court process, where you can claim the whole deposit amount back.

Conclusion

Within this fragile relationship of landlord and tenant, there are many opportunities for exploitation or breaching of obligations, for those who so choose (or are ignorant of the law). However, through the recent introduction of more tenant-friendly legislation such as the Tenant Fees Act 2019 and Homes (Fitness for Human Habitation) Act 2018, alongside tools such as the Rogue Landlord Checker (London only) hopefully tenants will feel more empowered to call out bad behaviour committed by landlords in order to improve their own living conditions.

*SpaceLet have been contacted by LadyoftheLand about their advertising of prohibited fees.

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