Section 21 – Serving EPCs for HMO Tenants
Section 21 – Serving EPCs for HMO Tenants:
Lately, the government introduced prescribed criteria for assured shorthand tenancies.
Resultantly, more court cases will come up in the future.
These cases will test if there are loopholes in administrations.
Lawyers of the tenants will have an important role to play at this stage.
They will try to trumps any attempt to evict their clients.
This will be as a result of the failure of agents and homeowners to fulfil the series of complicated requirements.
Landlords and agents will face difficulties when evicting renters.
They must check all boxes of establishing a new tenancy.
If this is not so, the lawyers will continue to truncate the eviction efforts repeatedly.
A good example of this case was the Home Group Ltd v Henry (2018).
This case involved an HMO renter.
The renter noted that he did not have any problems with an EPC when signing the tenancy.
Therefore, he claimed the homeowner’s possession order under Section 21 was non-effective.
It was such a wise claim by the tenant.
Should HMO renters be served EPC?
The launch of the EPC and the energy performance regulations ushered in some changes.
This launch brought about challenges to the legislation when HMOs are involved.
Also, it challenged the legitimacy of serving an EPC to an HMO renter.
Anyway, there is provision for serving an EPC to renters of single apartments in the tenancy agreement.
The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 was in October 2015.
Its Section 2a states the prescribed requirement: regulation 6(5) of the Energy Performance of Buildings (England and Wales) Regulations 2012(2) (requirement to provide an energy performance certificate to a tenant or buyer free of charge).
There is a need to understand whether EPC service is essential for an HMO renter or not.
To determine this, we must understand the difference in occupancies.
Is the renter occupying a building?
Is the tenancy just occupying a room or section in a building?
It is essential to consider the regulation in The Energy Performance of Buildings (England and Wales) Regulations 2012. This regulation states:
“The relevant person must ensure that a valid energy performance certificate has been given free of charge to the person who ultimately becomes the buyer or tenant.”
The tenant’s arguments
Let’s consider this by using the HomeGroup Ltd v Henry (2018) case study.
The AST of Mr Henry covered a room in an HMO.
Hence, he claimed that the landlord should have served him EPC at the beginning of his tenancy.
Resultantly, he said the possession order from the homeowner was invalid.
Henry supported his argument with the guidance in the new Section 21 notice (form 6A).
He noted that the notice did not distinguish between an HMO and a single letting.
Therefore, there is no clarity on serving a valid Section 21 notice.
The landlord’s arguments
However, the house owner, Home Group, countered his claim.
HomeGroup claimed that the EPC under reg 6(5) of the 2012 Energy Regulations had limited coverage.
And that it covers letting a building or building unit, but not a section in a building.
Notably, the regulation mentions a “building” and a “building unit”.
This regulation does not refer to a room, bedsit or section in a building.
Therefore, the landlord was able to argue the case reasonably.
Finally, there was a dismissal of the appeal.
Also, the judge noted that nothing was specifically mentioned in the 2005 AST rules concerning HMOs renters.
However, he stated that this would need a new definition of EPCs to involve a room.
Furthermore, he said the explanatory note to the form was just a guide.
The note was not a regulation on its own.
Consequently, he concluded that the note could mislead people.
Notably, the judgement was delivered by a county court appeal to a circuit judge.
So, further appeals could occur and change the ruling.
Nevertheless, the argument of the court was very reasonable and clear.
Therefore, any future appeal may not hold waters.
Any future challenge is to determine whether a room in an HMO can be categorized as a building unit.
It may also challenge the correctness of the MHCLG guidance on EPC.
Lastly, it may consider why a prospective HMO renter should not get information on the energy efficiency of the building.
The landlords can argue these points in the court.
Nonetheless, the decision of the court was still right and distinctive.
Details of the Section 21 notice
The provision of the updated guide plays an important role in the use of Section 21 notice.
The landlord should not serve the Section 21 notice without providing the tenant with the updated version of the guide.
Undoubtedly, if they serve the notice, it is void and cannot be enforced.
Primarily, the government is planning to alter the Section 21not-fault eviction process.
However, the homeowners can use it to evict a renter when necessary.
It is important for homeowners to realize the importance of the S21 process to them.
Hence, they should protect their survival by using it only when they have legitimate reasons.
Several Acts were established in the past years.
These Acts make it compulsory for landlords to meet some administrative requirements when using the S21 process.
Generally, these requirements make it important for homeowners to be meticulous.
They must pay attention to details when establishing new tenancies.
Similarly, they must have documentary evidence of following due process.
Failure to do this may affect their use of the Section 21 process.
If you need help with establishing a new tenancy, contact us now at Reneza.
Our experience and expertise will help you avoid any pitfalls.
So, would you like to get more information about serving EPCs?
Are you battling any real estate challenge?
Would you like to hire the services of experienced real estate agents?
If yes, speak to us today at Reneza.
Our experienced and skilled professionals are here to help you.