DEREGULATION BILL Memorandum by the Department for Communities and Local Government to the Delegated Powers and Regulatory Reform Committee INTRODUCTION 1. This supplementary Memorandum deals with amendments to the Deregulation Bill inserting after clause 30 new clauses relating to the eviction of tenants which confer delegated powers. The amendments were tabled on 4 Februray. The supplementary Memorandum has been prepared by the Department for Communities and Local Government (“the Department”). BACKGROUND 2. These clauses provide protection for assured shorthold tenants in the private rented sector against retaliatory eviction where such tenants are suffering from poor or unsafe property conditions. This is done by providing that, where a relevant notice is served on the landlord in relation to the dwelling, the landlord is prevented from evicting a tenant or tenants (by giving a notice under section 21 of the Housing Act 1988) for six months from the date of service of the relevant notice. For the purposes of these clauses, a relevant notice is defined as an improvement notice served under section 11 or section 12 of the Housing Act 2004 or a notice of emergency remedial action served under section 40(7) of the Housing Act 2004. Section 21 of the Housing Act 1988 currently provides a ‘no-fault’ eviction procedure in the case of assured shorthold tenancies whereby, provided the landlord gives tenants the prescribed amount of notice, the landlord does not need to rely on any grounds for eviction. The new clauses after clause 30 also make changes to the procedure under section 21 of the Housing Act 1988 by removing the requirement for notices served under section 21(4) to end on the last day of a period of the tenancy and by introducing time restrictions in relation to the giving of section 21 notices and the time period for bringing possession proceedings following the service of a section 21 notice. 3. The clauses confer the following delegated powers on the Secretary of State: Power to prescribe the form of section 21 notices (Fifth new clause after clause 30); Power to prescribe legal requirements a breach of which by landlords of assured shorthold tenants would prevent the landlords from serving a section 21 notice (Sixth new clause after clause 30); Power to prescribe certain information that landlords must provide to their tenants, the sanction for a failure to do so being that the landlord would be unable to serve a section 21 notice (Seventh new clause after clause 30); 1 4. The policy rationale for the changes introduced by these clauses is to prevent tenants from feeling unable to complain about poor property conditions because they fear eviction. The changes are also intended to encourage landlords to keep their property in a decent condition and to comply with all legal obligations placed upon them in order not to lose their right to rely on section 21. The changes to the section 21 procedure aim to make the eviction process more straightforward for both landlords and tenants. DEVOLUTION 5. The clauses extend to England and Wales, but do not alter the legal position in relation to Wales. The new provisions contained in the Bill apply in relation to England only. PROVISIONS CONFERRING DELEGATED POWERS Fifth new clause after clause 30 – prescribed form of section 21 notices New subsections 21(8) and 21(9) of the Housing Act 1988 Power conferred on: Secretary of State Power exercised by: regulations Procedure: negative 6. This clause inserts a new subsection 21(8) into the Housing Act 1988, which confers power on the Secretary of State to prescribe, by regulations, the form of a notice given under subsection (1) or (4) of section 21 of the Housing Act 1988. 7. Such notices are the notices given to tenants of assured shorthold tenancies, by a landlord, when the landlord wishes to obtain possession of the property on or after the end of any fixed-term, on a no-fault basis. 8. The Department considers that it is appropriate to prescribe the form of the notice in secondary legislation in order to provide flexibility over the wording and contents of the notice. There has not previously been a prescribed form for a notice served under section 21 so it is possible that, after having introduced a prescribed form, the Department would seek to make revisions to the form once there has been the opportunity to monitor how it is working in practice. The Department runs an ‘Improving Evictions’ working group, attended by representatives from landlord and tenant groups and would like the opportunity to be able to liaise with this group regarding how the form may be amended over time. 9. New subsection 21(9) provides that regulations made under new subsection 21(8) are subject to the negative resolution procedure. 10. The Department considers that the negative resolution procedure is appropriate here because the main requirements regarding what a notice served under section 21 should contain are already set out in the primary legislation and a prescribed form is 2 therefore largely provided for the purpose of assisting landlords and tenants in understanding the legislative requirements and making these easier to follow. There are already various forms prescribed under powers contained in the Housing Act 1988, which are set out in the Assured Tenancies and Agricultural Occupancies (Forms) Regulations 1997 (SI 1997/194), and these forms are subject to the negative resolution procedure. In keeping with this, the Department considers that the negative resolution procedure is appropriate for the new prescribed form under section 21 of the Housing Act 1988. Sixth new clause after clause 30 – compliance with prescribed legal requirements New section 21A of the Housing Act 1988 Power conferred on: Secretary of State Power exercised by: regulations Procedure: negative 11. New section 21A confers power on the Secretary of State to prescribe existing legal requirements. If the landlord of an assured shorthold tenant is in breach of a prescribed legal requirement, this will prevent the landlord from giving a notice under subsection 21(1) or 21(4) of the Housing Act 1988. Subsection (2) of new section 21A sets out the areas which the prescribed requirements may relate to. These are the condition of dwellings or their common parts, the health and safety of occupiers or the energy performance of dwellings. At the present time, the Department envisages that the requirements that would be prescribed would be the requirement for a landlord to provide their tenant with a copy of the energy performance certificate for the property and the requirement for a landlord to provide their tenant with a copy of the annual gas safety check for the dwelling. However, it is possible that a future Government could introduce other prescribed requirements, for example relating to the provision of smoke alarms in Houses in Multiple Occupation. 12. The Department considers that it is appropriate to make provision about the prescribed requirements in subordinate legislation as the requirements which the Department wishes to prescribe may change over time, for example to reflect new legal obligations that may be imposed on landlords in relation to the health and safety of occupiers of dwellings or the energy performance of buildings. This is particularly important given that health and safety and the energy performance of buildings are both areas where standards are likely to increase over time and new legal obligations may be imposed on landlords as a result of this. The power to prescribe the requirements in secondary legislation will therefore provide flexibility, allowing the Government to respond to changing circumstances. 13. The Department considers it appropriate for the regulations to be subject to the negative resolution procedure since the subject matters to which the prescribed requirements may relate are quite specific and are set out on the face of the Bill in new subsection (2) of section 21A of the Housing Act 1988. The Secretary of State does not therefore have an unfettered discretion to prescribe new obligations a breach of which would prevent the service of a section 21 notice. It should also be noted that the regulations themselves will not impose new obligations on landlords but will instead simply provide a new sanction for a breach of existing legal obligations placed 3 on landlords by other legislation. For these reasons, the Department considers that the negative resolution procedure is sufficient to enable Parliament to debate the content of any regulations made under those powers where that is considered (for whatever reason) to be appropriate or necessary. Seventh new clause after clause 30 – Requirement for landlord to provide prescribed information New section 21B of the Housing Act 1988 Power conferred on: Secretary of State Power exercised by: regulations Procedure: negative 14. New section 21B confers power on the Secretary of State to make regulations requiring certain information about the rights and responsibilities of a landlord and tenant under an assured shorthold tenancy to be provided by the landlord or a person acting on the landlord’s behalf, to a tenant. Regulations under this section may also specify cases where this requirement does not apply. A section 21 notice may not be given to a tenant whilst a landlord is in breach of a requirement imposed by regulations under this section. 15. The Department considers that it is appropriate to make provision about the prescribed information in subordinate legislation as the information which it considers it necessary to prescribe may change over time to reflect changes in landlord and tenant law and trends or new practices within the industry. Setting out the prescribed information in secondary legislation will therefore provide flexibility and allow the Department to ensure that the prescribed information is always relevant to the parties. 16. The Department considers that the negative resolution procedure will provide sufficient scrutiny of the use of this power, given that the nature of the information that may be prescribed (information about the rights and responsibilities of a landlord and tenant under an assured shorthold tenancy of a dwelling-house in England) is already set out on the face of the Bill. The Department does not consider that the prescribing of specific information on this topic would be controversial or likely to generate significant debate in Parliament. DEPARTMENT FOR COMMUNITIES AND LOCAL GOVERNMENT AND CABINET OFFICE 27 January 2015 4