13 May 2019 | Comment | Article by Kathryn Cooling

Higher protection rights for tenants impact landlords

Landlord’s in Wales need to be aware of the impact of the recent decision in Evans v Fleri [2019], as landlords have to be both registered and licensed. The appeal judge considered that this must be the case in order for them to be able to serve a notice to terminate an assured shorthold tenancy under Section 21 of the Housing Act 1988 and claim possession of a dwelling, located in Wales. 

Any landlord who rents residential property in Wales needs to be aware that licensing and registration requirements apply, which do not exist in England. The Housing (Wales) Act 2014 brought in a new mandatory scheme which applies to all residential rented property in Wales which is not managed by a council or social landlord. It applies both to new and existing tenancies which are assured, assured shorthold or regulated tenancies. 

The scheme is administered by Rent Smart Wales. It requires:

  • All landlords to register themselves (an agent cannot do it on their behalf)
  • Landlords who manage a property themselves must obtain a licence to carry out lettings or property management activities
  • Alternatively, a landlord can instruct an agent to carry out these activities on their behalf (the agent will have their own licence)

A registration or licence must be updated every five years, and the landlord is obliged to keep certain information updated with Rent Smart Wales. Further information, relevant forms and fee details can be obtained from Rent Smart Wales.

 

Facts of the Case

The landlord, Mr Fleri, had served a Section 21 notice under the Housing Act 1988 on his tenant, Mr Evans. At the time the notice was given, the landlord was registered but not licensed. He had also not appointed a licensed agent in relation to the property. The landlord subsequently became licensed.

The landlord made a claim for possession of the property. This, however, was struck out on the basis that he was not licensed at the relevant time. He then applied to have the striking-out order set aside, on the grounds that as long as the landlord is a registered landlord (which he was), then a Section 21 notice may lawfully be given.

The district judge noted that there appeared to be a conflict between Section 7 of the Housing (Wales) Act 2014. This provided that an unlicensed landlord is prohibited from serving notice to terminate a tenancy. Section 44 of that Act, prohibited the service of a Section 21 notice if the landlord was not registered in respect of the property “or” was not licensed for the area in which the property was located and had not appointed a licensed agent.

The district judge concluded that the word "or" meant it is an either/or situation. It is not a requirement that landlords need to be registered and licensed. Registration or licensing is sufficient. However, the district judge did give permission to appeal due to the clear conflict between the two Sections of the Act.

 

The Appeal Decision

The tenant appealed on the grounds that the district judge failed to apply Section 7 and that he mis-interpreted Section 44.

The appeal judge considered it was necessary to regard the other parts of the Act and the enacting history, in order to determine the meaning of Section 44.

The appeal judge was of the opinion that the Act intended to introduce a higher level of protection on tenants. He considered it was likely that in order to be able to serve a Section 21 notice, it was intended that a landlord had to be both registered and licensed so as to give a higher degree of protection to the tenant than the low level afforded by registration alone.

The appeal judge considered the history and reasoning for introducing the Housing (Wales) Act 2014. He decided that this demonstrated the intention for a landlord to be both registered and licensed in order to serve a Section 21 notice.

Since the landlord was unlicensed at the time of serving the Section 21 notice, it was found that the district judge had been entitled to strike out the landlord’s claim for possession.

 

Lessons to be learned from this case

The decision in this case highlights that landlords must not only be aware of, but also understand the requirements of The Housing (Wales) Act 2014.

In this case, the landlord had completed a certified landlord training course and paid the landlord licence fee in June 2016. He believed that he had therefore become a licensed landlord, but he had not filed the relevant licence application and subsequently was not licensed.

 

Hugh James has a dedicated team of experts with experience in dealing with residential landlord and tenant matters. If you require assistance or advice regarding ownership of land, please contact the Property Litigation team who would be happy to discuss options and costs.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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