Housing Act 2004

This Act contains a wide range of provisions that affect housing, not all of which were in the original Bill.  Not all of the provisions will affect the private rented sector directly so we will concentrate on the relevant areas of the Act.  Amended versions of existing Factsheets and new Factsheets will provide more detail on areas of particular relevance to those working in the lettings field.  This Act received the Royal Assent on 18th November 2004.  

Housing, Health & Safety Rating System (HHSRS):

Part 1 of the new Act contains provisions to replace the housing fitness regime set out in the Housing Act 1985.  The separate Houses in Multiple Occupation (HMO) fitness test will also be repealed.  The test of fitness is to be replaced with an evidence-based risk assessment process, carried out using the Housing Health and Safety Rating System (HHSRS).  Action by authorities will be based on a three-stage consideration: (a) the hazard rating determined under HHSRS; (b) whether the authority has a duty or power to act, determined by the presence of a hazard above or below a threshold prescribed by Regulations (Category 1 and Category 2 hazards); and (c) the authority's judgement as to the most appropriate course of action to deal with the hazard.  

Licensing of Houses in Multiple Occupation (HMOs):

Part 2 of the Act introduces a mandatory scheme to licence HMOs of a description contained in regulations.  It is intended initially to apply this only to the larger higher risk HMOs of 3 or more storeys occupied by 5 or more people.  Local Housing Authorities (LHAs) are given power to extend licensing in their districts to other categories of HMOs to address particular problems that may exist in these smaller properties.  This power is subject to carrying out consultation and with the approval of the appropriate national authority. The Act also provides for a new definition of HMO, and limits the scope of licensing and enforcement action (other than in relation to Housing, Health and Safety Rating System action) to certain types of HMOs within that definition.  

Selective licensing of Private Landlords:

The ‘selective licensing' provisions are contained in Part 3 of the Act.  Briefly stated, they give local authorities new powers that enable them to establish a licensing scheme for private landlords in their local area, so that, provided certain conditions are met, all private landlords would be required to obtain a licence in order to rent out their property to tenants.

A local housing authority may make a licensing scheme for privately rented accommodation in its area, or any part of it.  This will be an area of low housing demand (or is likely to become such an area), which is experiencing a significant and persistent problem caused by anti-social behaviour and the scheme has been made in accordance with regulations made by the appropriate national authority to deal with other challenges in the private rented sector.

Management Orders:

Management Orders transfer the management of a residential property to the LHA for a period of up to twelve months.  In particular, an order allows the LHA to take possession of the house against the immediate landlord, and subject to existing rights to occupy; to do anything in relation to the house, which could have been done by the landlord, including repairs, collecting rents etc.; to spend monies received through rents and other charges for carrying out its responsibility of management and to create new tenancies (with the consent of the landlord).

Anti-social Behaviour:

Provisions in the Act will enable local authorities to tackle anti-social behaviour amongst their tenants by extending introductory tenancies to 12 months; refusing mutual exchanges applications and preventing tenants from using the Right to Buy where there is anti-social behaviour.  

Empty Dwelling Management Orders:

An Empty Dwelling Management Order (EDMO) would enable a Local Housing Authority to take management control of a dwelling so that it can secure occupation of it.  When an EDMO is in force, the LHA takes over most of the rights and responsibilities of the relevant proprietor and may exercise them as if it were the relevant proprietor. To make an interim EDMO, a LHA must apply for authorisation from a Residential Property Tribunal.  There must be no one in occupation of the dwelling, whether the occupation is lawful or unlawful.

Before a Residential Property Tribunal can authorise the making of an interim EDMO is must be satisfied that:

• the dwelling has been unoccupied for at least the prescribed period of time (the minimum period will be six months);
• the owner does not intend to take immediate steps to secure occupation of the dwelling and
• there is a reasonable prospect that the dwelling will become occupied if an interim EDMO is made.  

Tenancy Deposits (TDS):

 
One or more TDSs will be established with the intention of safeguarding deposits paid by tenants who have assured shorthold tenancies.  Once the provisions come into force they will apply to all new tenancy deposits taken in connection with assured shorthold tenancies. 

Schemes will have two main purposes:

• to safeguard tenancy deposits paid in connection with assured shorthold tenancies; and
• to facilitate the resolution of disputes arising in connection with such deposits.

Arrangements will be made with bodies to set up and manage Tenancy Deposit Schemes on the Government's behalf.  At present the intention is to do this through contractual arrangements with private organisations.  Both custodial (where the deposit is paid into a scheme) and insurance-based schemes will be chosen as a result of a competitive tendering process where each proposed scheme will be examined against set criteria.

Rent Repayment Orders:

A Rent Repayment Order (RRO) is a financial penalty that can be imposed upon a landlord who, without reasonable excuse, manages or lets a property which ought to be licensed under Part 2 or 3 of the Act and is not licensed.  They have the power to make an RRO for an amount equivalent to any rent received during the period of the offence up to a maximum of 12 months. A Local Housing Authority and former occupants may apply for an order.  Any sum ordered to be paid under a RRO is recoverable as an ordinary civil debt.  Sums owed to the LHA under a RRO are local land charges.  

Overcrowding:

It is intended to update the statutory overcrowding provisions and this matter is currently out for consultation.  

Park Homes & Caravans and disabled facilities grants:

The Act brings into force six of the key recommendations of the Working Party on Park Homes.  Further provisions will extend the existing disabled facilities grant to all those occupying caravans as their only or main residence.  This will include those renting caravans.  This came into force on 18th February 2005.  

Sources for Further Information:

• The Letting Centre, website: www.letlink.co.uk
• The Department for Communities and Local Government (formerly Office of the Deputy Prime Minister) - Factsheets on each of these areas are available on their website:  www.communities.gov.uk
• The text of the Act is available with explanatory notes on the following website: www.opsi.gov.uk

This summary is intended to assist landlords and letting agents to understand the effect of the Regulations.  It is not an authoritative interpretation - this is a matter for the courts. For more detail, you should refer to the text of the Regulations themselves.