What is the Housing Act 1988 and what rights does it give landlords?
The Housing Act 1988 is one of the key statutes governing property law in England and dictates most of the rights and responsibilities of landlords and tenants.
- Why was the Housing Act 1988 introduced?
- The difference between the Housing Act 1988 and tenancy agreement
- What were the main legal changes introduced?
- Why is it important for landlords to know about the Housing Act 1988?
- What are my responsibilities as a landlord under the Housing Act 1988?
- What are my rights as a landlord, under the Housing Act 1988?
- Summary
Why was the Act introduced?
Prior to 1988, most tenancies were 'protected and statutory', which meant they were heavily weighted in favour of tenants. Under the terms of those agreements, tenants had the right to stay in a rented property indefinitely and could even pass it on to their children or other relatives, meaning it was virtually impossible for landlords to regain possession unless the tenant chose to leave.
As a result, people became less and less willing to let their properties. This, combined with the Thatcher Government's decision to give council tenants the right to buy their homes, meant the need to house more people in a different tenure: The Private Rented Sector (PRS).
To grow the PRS, the government realised new laws were needed to redress the balance and encourage those who did own property to rent it out again. As such, one of the most important things to put in place was an assurance that landlords had the legal right to regain possession of their property if they needed to, along with rights to guarantee that both parties were treated fairly. The proposed laws were passed and the Housing Act 1988 came into force on 15th January 1989, reviving a desperately needed private rented sector. At the same time, assured shorthold tenancy agreements (ASTs) were introduced.
It's a common misconception that many media articles and tenant organisations thought landlords and letting agents were responsible for only having six-month tenancy agreements. Yet it was actually the Housing Act of 1988 which introduced this timeframe - by the government - to enable the growth of the PRS. A fixed period of time which guaranteed lenders the ability to secure a property back should they need to. This enabled their support of Buy to Let mortgages, giving more opportunities for the PRS to grow.
What is the difference between the Housing Act 1988 and a tenancy agreement?
Some landlords and tenants think that the Housing Act is a tenancy agreement, because it sets out each party's statutory rights and legal responsibilities. However, they are two separate things:
- The Housing Act stipulates what conditions and clauses the tenancy agreement can and cannot contain
- A tenancy agreement sets out the specific terms of the tenancy, such as how much the rent will be and how long the agreement will last
What were the main legal changes introduced by the Act?
Three key areas were dramatically affected by the Housing Act 1988:
- Security of tenure. With the advent of ASTs, tenants' rights to stay in a rented property were considerably curbed, as they can now be given notice to leave after just six months, and with only two months' notice after that. There is another type of tenancy permitted under the Act, which is an assured tenancy. It gives the tenants more-or-less the same rights as the old protected tenancy and long-term security of tenure, but gives the landlord the right to regain possession in the case of serious rent arrears.
- Succession. Under an AST, there are no rights of succession – i.e. if the tenant dies, their spouse or other beneficiary has no right to stay in the property - and the assured tenancy states that only a spouse can inherit rental rights.
- Rent regulation. Prior to 1989, the government regulated rents according to the age, location and condition of properties. The 1988 Act removed rent controls so there is now no legal restriction to the amount of rent a private landlord can charge (although, in reality, the market tends to self-regulate). Tenants can only challenge the rental amount:
(a) Within the first six months of the fixed tenancy (assured shorthold tenancies only), and
(b) Upon service of a notice to increase rent, which can be used by landlords annually to increase the rent after the fixed term has ended
Why is it important for landlords to know about the Housing Act 1988?
One of the most important considerations for you, as a landlord, is to be sure that none of the clauses in your tenancy agreement breach any of your tenants' statutory rights, as outlined in the Act. If they do, the whole agreement could be rendered invalid, as the Act is a 'ruling law' and can't be superseded.
If you use a letting agent to let and manage your property, they will take care of most of the paperwork on your behalf and shoulder much of the legal responsibility. However, you should still ensure that as well as being aware of the rights of your tenants, you know and understand your rights and responsibilities as a landlord.
With letting agent regulation being proposed by the government, it is essential to ensure your existing agent, or whichever one you choose is a member of already self-regulated ARLA or RICS organisations and has Client Money Protection. If not, they may not be in business for much longer and may go bust, taking your rent with them.
What are my responsibilities as a landlord under the Housing Act 1988?
Here are the key responsibilities, although some cross over with other acts such as the Landlord and Tenant Act 1985
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You are required to let and maintain the property in a good state of repair and ensure it is safe for tenants. That includes:
- Repairing the exterior and structure – roof, walls, chimneys, guttering and drains
- Ensuring the equipment that supplies gas, electricity and water is kept in safe working order
- You must tell your tenant when and how rent should be paid and you cannot refuse to accept it. If you wish to increase the rent amount:
- You cannot do so within the initial fixed term
- For a periodic tenancy, you cannot increase it more than once a year
- Any increase must be 'fair and realistic', meaning it must be in line with local averages
- You must give the tenant a minimum of one month's notice if rent is paid weekly or monthly and 6 months' notice if it is a yearly tenancy
- You must allow your tenant peaceful enjoyment of their home. That means neither you nor anyone employed by you can interfere unnecessarily with your tenant, harass them or make it difficult for them to stay there.
What are my rights as a landlord, under the Housing Act 1988?
The two most significant rights that are granted by the Act concern your being able to enter and regain possession and therefore control of the property, as above, some cross with other Acts.
The right to enter the property
There are four main instances when you, as a landlord, have the right to enter the property while it's occupied by a tenant:
- Reasonable Access. The definition of 'reasonable' depends on why you need to gain entry – you can't simply go in because you feel like checking up on the tenant! But if there were an emergency that required immediate attention or repair, such as a water leak, a fire, or the smell of gas, you would be entitled to enter immediately.
- To inspect the property. As a responsible landlord, you (or your agent) should carry out periodical inspections to check the state of repair of the property. In this case, you must give the tenant at least 24 hours' notice, which it's advisable to do in writing.
- To provide cleaning services. If the tenancy agreement states that you will provide a room-cleaning service, you don't need to give notice or get the tenant's permission before entering to carry out the cleaning although, this may be considered to be a licence to occupy as opposed to an AST.
- To conduct viewings. Typically via the contract, if your tenant has given notice to leave the property, you are allowed to visit and conduct viewings within the last 28 days of the tenancy, but you must give the tenant 24 hours' notice.
To be clear, unless there is an emergency and an immediate threat to safety, it is illegal for you to enter the property without the tenant's permission and, other than in the situations outlined above, you will require a court order to gain entry.
The right to legally regain possession of your property
Encouraging more people to rent out their properties was the driving force behind the introduction of the Housing Act 1988, which meant it was vital that there was some guarantee of landlords being able to remove tenants and take back their properties as and when they needed to. Under the Act, there are two main routes a landlord can take to regain possession:
- Section 21, which gives landlords an automatic right of possession once the fixed term has expired, without having to give any reason. You must give the tenant a minimum of two months' notice.
- Section 8 allows landlords to regain possession on one or more grounds stipulated in Schedule 2 to the Act, which include rent arrears (Ground 8) and anti-social behaviour (Ground 14), two of the most commonly-cited grounds. You can serve a Section 8 notice at any time – including during the fixed term, if the ground allows – but you will need to give the tenant up to two months' notice, depending on the ground you're using.
The full list of legal grounds can be found here.
In summary
The Housing Act 1988 was a 'watershed' moment for the private rented sector, when the pendulum swung from tenants having virtually all the control over a property, to a more equitable situation, where a tenant has the right to live undisturbed in a property, but only for a certain period of time. The law gives them a minimum 6-month period, after which the landlord can regain possession at any time with just two months' notice.
There have been amendments and modifications to the law as laid down by the Act since it was introduced, mainly concerning the responsibility of landlords to protect the health and safety of tenants. These include:
- Gas Safety (Installation and Use) Regulations 1998, requiring landlords to have an annual gas safety inspection carried out
- The Housing Act 2004, which changed the way properties are inspected and licensed , and introduced both the Housing Health and Safety Rating System (HHSRS) and Deposit Protection of Tenant Monies
- Energy Performance of Building Regulations 2007 to 2012, requiring every property to have an EPC before being marketed
- The Deregulation Act 2015, making 'retaliatory evictions' under Section 21 illegal
So, while the Housing Act 1988 made important and significant changes to the rights of both parties, those rights were not carved in stone. As time goes on, and the needs of tenants and profile of the PRS continue to change, undoubtedly there will be more amendments to the law.
In Scotland, there has already been a shift to give tenants greater security of tenure with the introduction of the new Private Residential Tenancy, introduced in December 2017 in the form of a model tenancy agreement.
Source: https://www.propertywire.com/news/uk/new-rental-laws-introduced-scotland-biggest-change-generation
https://news.rla.org.uk/hammond-listens-rla-longer-tenancies-another-consultation-enough/
You can read the full Housing Act 1988, together with its amendments and modifications, on the government website.