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Statutory Instruments

1. Housing Act 2004 (Commencement No 8) (England and Wales) Order 2007

Number: 2007/1668
Enabling power: Housing Act 2004
Commencement: 1 August 2007
Summary: This SI brings part 5 of (and schedule 8 to) the Housing Act 2004 into force in England and Wales. These provisions relate to home information packs. They are being brought into force only in relation to residential properties with four bedrooms or more, other than properties to which regulation 17C of the Building Regulations 2000 (which imposes minimum energy performance requirements) applies. Once in force, the provisions will apply to a residential property unless it is excepted under part 6 of the Home Information Pack (no 2) Regulations 2007.

2. Town and Country Planning (Control of Advertisements) (England) (Amendment) Regulations 2007

Number: 2007/1739
Enabling power: Town and Country Planning Act 1990
Commencement: 20 July 2007
Summary: This SI amends class 5 of schedule 3. Condition (6) is substituted, with the effect of restricting the maximum area of class 5 advertisements that consist of a single placard or poster to 1.55 square metres. Modifies section 70A of the Town and Country Planning Act 1990. Regulation 14(3) of the principal Regulations provides for section 70A, as modified, to apply for the purposes of that regulation.

3. Home Information Pack (No 2) Regulations 2007

Number: 2007/1667
Enabling power: Housing Act 2004
Commencement: 2 July 2007
Summary: This SI prescribes the documents to be included in home information packs and the circumstances in which they are included (parts 1 to 5 of the Regulations). They provide for exceptions and enforcement (parts 6 and 7) and make further provision in relation to home condition reports (parts 8 and 9).

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Features

1. More protection needed for tenants fearing �retaliatory� eviction

Protection remains limited for private tenants who fear �retaliatory� eviction if they request repairs to their rented property, although some possibilities are emerging under newer legislation and other initiatives.

�The problem is, of course, well-known,� says David Cohen, professor of Law and Policy at Bristol University. �The Citizens Advice Bureaux have been running a campaign against retaliatory eviction although, given the powerful lobby of the associations of private landlords, it may not have much practical impact.�

Shelter, Citizens Advice Bureaux (CAB) and other tenant groups claim that tenants do not request repairs to substandard rental property because they are worried about being evicted under section 21 of the Housing Act 1988. This allows tenants on Assured Shorthold Tenancy Agreements (ASTA) to be evicted within two months without any reason being given. Most private housing is now rented on ASTAs.

�English law knows no concept of a prohibited retaliatory eviction,� Cohen continues. �The procedure for the termination of an assured shorthold tenancy has been challenged on the basis that it contravenes article 8 (the right to respect for private and family life) of the European Convention on Human Rights, because of the court�s lack of discretion to deny the landlord possession. The Court of Appeal has concluded that the eviction did impact on the tenant�s family life, thereby engaging article 8(1). However, it could be justified under article 8(2) (protection of freedom of others) on the basis that it was necessary to have in place a procedure for the orderly recovery of possession at the end of a tenancy.�

However, the recent Housing Act 2004 introduces some licensing and management order requirements for private housing which housing groups say could influence the use of section 21 by failing landlords. In particular, blocks of flats, otherwise known as houses in multiple occupancy (HMO), need to be licensed under the Management of Houses in Multiple Occupation (England) Regulations 2006. The Regulation requires that the HMO manager keeps a property in good repair, a statute version of what many local authorities already provide as guidelines. HMO requirements include fire precautions, adequate water supply, drainage, waste disposal, maintenance of commons fixtures and appliances. Where landlords cannot be licensed because of bad character, etc, local authorities can issue a 12-month temporary management order (TMO) on a property. This means that the local authority takes over management of the property, that is, collects rents, enforces tenancy conditions, and becomes responsible for repairs and for new lettings. A final management order (FMO), which lasts for a maximum of five years, can also be issued. Reasonable costs for management�s orders are deducted from rents, and unlicensed landlords cannot avail themselves of section 21.

Landlords also cannot evict tenants to avoid their property being subject to multiple occupancy licensing provisions under the Act. The Act also provides for other selective licensing with attached conditions. In another area, it makes the use of section 21 conditional on whether the landlord has met statutory requirements to protect any deposit obtained from tenants. The Law Commission has also again taken an interest in aspects of private renting, this time in the form of a consultation paper called �Encouraging Responsible Letting� to be published later this summer, Cohen adds. The Law Commission says the consultation paper has some serious legislative intent, and is likely to put forward ways of approaching the retaliatory eviction issue.

Relevant Legislation: Housing Act 1988 section 21

(25/6/07)

2. HIPs � a major operation that may never take place?

The new Home Information Packs (HIPs) scheme, already beset by delay, will not succeed because the general public are not committed to it, says Roger Wakefield, partner at Nabarro Nathanson.

�The primary intention (of a HIP) is to educate the public in the way that food labelling has done, but the volume of small purchases and the fact that a detailed understanding of what we eat is important to many of us (particularly with the huge growth of allergies) has made it relatively easy to have an impact on food,� he says. �Houses are not purchased in the same way, and there is no underlying need for knowledge about energy performance, except for the few who are dedicated to the cause of fighting global warming.�

Wakefield claims the nation as a whole is largely unconcerned with the energy efficiency of their homes and that the government's decision to phase in the scheme, starting with properties of four bedrooms or more, does not help the cause. �A lot of people think that it is dead in the water because we are a long way from being in a society where the energy performance of our homes is a matter of great concern, the very fact that it only applies to larger properties underlines the fact that it is not that important to have at all,� he says.

With regard to the future, there are many questions to be answered. Nobody can say with certainty who will win the next general election, but Wakefield expresses doubts that the scheme will be implemented even if Labour stay in power under Gordon Brown.

�The ministers sponsoring the proposal � Ruth Kelly and Yvette Cooper � are likely to move on in the coming of the Gordon Brown clearout, so it is possible that whoever succeeds to responsibility for HIPs will let them fall into disuse and ignore the pleas of those who paid for training on the basis that they thought they had found a possible gravy train.�

With the scheme this far down the line and already facing complications, Wakefield says he feels let down and that an opportunity has been missed. �It is very disappointing that a potentially exciting innovation that should have helped to keep house prices down has been lost in such a way.�

(19/6/07)

3. Why new regulations on HIPs are �extraordinary�

Home Information Packs (HIPs) were due to be introduced on 1 June. However, last month local government minister Ruth Kelly was forced to delay the start date to 1 August, limited to properties with four or more bedrooms, after a legal challenge and a national shortage of energy assessors. The Department of Communities and Local Government (DCLG) has now issued more than 100 pages of revised regulations, guidance and impact assessments aimed at countering fears that the packs could have a damaging effect on the property market.

As �additional incentive�, the DCLG has promised to pay �100 plus VAT towards the cost of the Energy Performance Certificate (EPC) for every HIP commissioned before 1 August. This is being seen as a way of placating energy assessors who have threatened legal action over lost earnings following the delayed and revised start. Peter Ambrose, director of HIP providers The Partnership, says, �The �100 incentive is extraordinary. Will it make a difference? If they had said free HIPs for everyone, that might have made a difference, but this is just towards the EPC. Will it make me sell my house? No.�

He believes the government and pack providers are underestimating the cost of EPCs. �The main cost of a HIP is the EPC. HIP providers are claiming they can get inspectors to do them for �70, so the whole pack will be �299. But the inspectors are refusing to do the work for that amount. We work on a fixed price of �150 for the energy report on a property with five or six bedrooms. We had several standoffs with inspectors, but in the end they did the work for us.�

He identifies the four main changes in the revised regulations. �You now don�t need a HIP before 1 August. Until the end of the year, you now have �day one� marketing, so you can market your property without an EPC as long as you can show you have instructed a HIP provider. If an EPC is not available, energy charts need not be on property particulars. There is no time limit, but you have to use reasonable endeavours to get it done. The requirement for interim energy assessments for new buildings has also been dropped. The age of the EPC has also been extended from three months, so they can now be up to 12 months old when first included in the pack.�

The packs are now going to be introduced in a rolling programme as sufficient accredited inspectors come on stream. Homes with three or more bedrooms will require HIPs once there are more than 2,000 home inspectors and energy assessors available, and they will be required for all other homes when there are more than 3,000 inspectors and assessors available. The DCLG claims that, with more than 1,000 assessors already accredited, they anticipate packs will be required for all properties before the end of this year.

Ambrose says they had started providing HIPs last month, but that came to a halt when the government delayed the packs� introduction. �One estate agent put through half a dozen requests in the first week because of the lag time in being able to market properties while the pack was being completed. It raised some interesting questions. We discovered a problem in doing EPCs on unregistered titles, which do not have a unique property reference number (UPRN). The system requires a UPRN to be able to lodge the EPC. We had one involving a large property with a small cottage and a flat, all with the same postcode. It didn�t have a UPRN and it took us days to get the report lodged.

�We also had the situation where an inspector went in and took photographs, and in our market that is very sensitive. The vendor was upset and we had to bring another inspector in. So we have now said photographs mustn�t be taken inside the property to respect the privacy of our clients."

(14/6/07)

Legal News Analysis
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Articles

1. A common VAT trap in property transactions

Journal: Tax Journal
Citation: Issue 891, 15
Issue date: 25 June 2007
Author: Michael Conlon
Summary: This article highlights VAT problems that can arise in property transactions involving nominees.

2. A decade of labour and property

Journal: Estates Gazette
Citation: 23 June 2007, 180
Issue date: 23 June 2007
Author: John Furber
Summary: This article looks at Tony Blair's legacy in property law. The Blair government has been successful in keeping politics out of property. Previous Labour governments put increased protection for private residential tenants at the front of their legislative programmes.

3. Not so HIP?

Journal: New Law Journal
Citation: 157 NLJ 832
Issue date: 15 June 2007
Author: Peter Ambrose
Summary: This article explains why rumours of the death of HIPs have been greatly exaggerated.

4. Soul searches

Journal: New Law Journal
Citation: 157 NLJ 844
Issue date: 15 June 2007
Author: Matt Le Breton
Summary: This article explains why chancel repair searches are no longer an optional extra.

5. True intentions

Journal: New Law Journal
Citation: 157 NLJ 841
Issue date: 15 June 2007
Authors: Elizabeth Fitzgerald and Greville Healey
Summary: This article discusses the construction of leases and the property rights of cohabiting couples.

6. Efficiency drive

Journal: New Law Journal
Citation: 157 NLJ 837
Issue date: 15 June 2007
Authors: David Thomas and Miles Keeping
Summary: This article reviews the Energy Performance of Buildings Regulations.

7. New Commercial Property Code

Journal: Solicitors Journal
Citation: 151 SJ 22, 734
Issue date: 8 June 2007
Author: Nick Darby
Summary: This article looks at a new voluntary Code for Leasing Business Premises, which aims to foster co-operation and partnership between commercial landlords and their tenants.