The Fitness for Human Habitation Bill.
Hilary Grayson BSc Est Man (Hons) – Director of Surveying Services, Sava
Fiona Haggett BSc (Hons) FRICS – Director of Operations, BlueBox Partners
Please note: This article was originally published in July 2018. In December 2018, this Bill was given royal assent and it became the “Homes (Fitness for Human Habitation) Act 2018”.
The Fitness for Human Habitation and Liability for Housing Standards (Homes) Bill was introduced by Karen Buck, the Labour MP for Westminster North. First presented before the Grenfell Tower disaster, the bill was initially defeated by Conservative MPs. However, in the wake of Grenfell and with a swell of public opinion backing stricter sanctions on irresponsible landlords, this new version of the bill has gained the full support of the government. So much so that the Department for Housing, Communities and Local Government even helped to draft it. Given this political backdrop, there is the feeling that the bill will eventually pass into law. It has the full backing of Shelter, the Residential Landlords Association and National Landlord Association. Now at committee stage, it’s due to be scrutinised by a Public Bill Committee, although no date has yet been announced. All this parliamentary activity brings it a step closer to becoming law, what implications will this have for surveyors, landlords and managing agents?
What is in the bill?
For the first time, the bill defines the meaning of the phrase “fit for human habitation”. In this context, the term “unfit” will now cover issues like fire safety, inadequate heating, poor ventilation, condensation and mould, therefore covering issues that could be hazardous to the health of tenants and occupiers. This means that the phrase “fit for human habitation” will apply to properties that are non-hazardous to the health of people living in them. The bill also says that, should private or social tenants be exposed to unsafe areas in the property they are renting, they will be able to legally force their landlords to take remedial action to resolve the issues.
Amending current clauses
The bill is intended to amend a clause which already exists in Section 8 of the Landlord and Tenant Act 1985, which required homes to be “fit for human habitation” at the start of the tenancy and to remain so throughout. Problems arose as the clause only applied to homes with a rent of £80 or less per annum in London (£52 or under elsewhere), which is not a situation currently reflected in any tenancy in England or Wales. It is also intended to amend the Building Act 1984 to make provision about the liability for works on residential accommodation that do not comply with Building Regulations, and for connected purposes. Although the central aim of the bill hasn’t changed following its reintroduction, its scope has been updated. It now applies to all areas of a building “in which the landlord has an interest”, including communal areas. Additionally, the categories that determine whether a house is fit for human habitation have been updated, with the bill now reflecting the list of 29 hazards listed on the 2004 Housing Health and Safety Rating System (HHSRS). This was initially created to enable local authorities to enforce living standards across the private rented sector.
Why is the bill needed?
As the HHSRS already applies, why is this bill necessary? According to Shelter, “…renting, in both the social and private sectors, is not fit for purpose, and hasn’t been for a generation. Too many renters live in unsafe conditions. In total, over 1 million private and social tenancies have Category 1 hazards, home to about 2.5 to 3 million people, including children. These figures have been pretty much static for the last 3 years.” In addition, the 2015/2016 English Housing survey found that the number of properties with a Category 1 hazard under the HHSRS (that is a “serious and immediate risk to a person’s health and safety”) numbered 244,122 in the social sector and 794,600 in the private sector.
Problems with current system
The HHSRS depends on local authorities receiving a complaint about potential hazards and then being required to enforce those complaints. In addition, the HHSRS cannot be used against local authority landlords, as that would mean local authorities enforcing against themselves. Also, in practice, it is not commonly employed against other social landlords due to the close relationship they have with local authorities. Essentially, in many cases it’s unenforceable. Therefore, the bill is intended to act as a stronger, more enforceable version of HHSRS by adopting and applying its rules to all landlords and all rented properties. Despite bad press surrounding ‘bad’ landlords in the private sector, the irony is that the tragedy at Grenfell Tower predominately affected tenants in the social sector and was the bluntest reminder possible of the dangers of unsafe accommodation. It demonstrated the appalling consequences of ignoring health and safety problems.
How will the bill impact on tenants?
It will give tenants a way to take effective action themselves rather than rely on overstretched local authorities. If they rent a property in poor condition and the landlord fails to do the necessary maintenance, the bill gives tenants the right to take their landlord to court where the property is not fit. This applies to both private and social tenants. They will be able to apply directly to the Court using their own evidence for an injunction to compel their landlord to carry out works, or for damages (compensation) for the landlord’s failure to keep the property in good repair. According to Shelter, this will not only empower tenants by giving them the tools they need to enforce repairs or rectify problems but will improve the housing stock generally through making landlords aware of their responsibilities and the risk of being sued. At Grenfell Tower, tenants had repeatedly raised safety concerns which were not addressed by the landlord. However, they had no further options or routes to redress. In theory, the bill would change this. However, according to Shelter, as it currently stands the bill still would not have applied in the case of Grenfell. They say it must be extended to apply to all common parts (for example, stairwells) and the structure of the building, assuming this is also the landlord’s responsibility. With these revisions, tenants would be able to compel their landlord to make repairs to these too. The problems that were being raised by Grenfell tenants, such as fire doors, emergency lighting and sprinklers, would only be covered by an extension to the bill. Shelter will be pressing for amendments at committee stage.
How might the bill impact on agents and surveyors?
It’s possible that the legislation will affect lettings agents who fully manage properties on behalf of landlords, if the properties don’t meet the new standards. The responsibility of ensuring that the property is “fit for human habitation” could well be passed on to them, depending on the specific terms of their agreement with the landlord. Empowered tenants (either individually or in groups undertaking class actions) seeking their own route to redress will be able to directly instruct surveyors or environmental health officers to provide a report on the property and act on their behalf. For surveyors to benefit from this, they must fully understand HHSRS and the definitions of hazards.
Replacing current surveying suite
It also raises the question of whether the existing suite of survey products are ‘fit for purpose’. If a surveyor is instructed by a landlord, will a HomeBuyer Report be sufficient in terms of fitness for human habitation? While ‘services that kill’ may be sufficiently covered by a valid gas or electrical safety certificate, and dampness can be identified, where would this leave slips, trips and falls? We also think this will likely cause lenders to rethink their risks on Buy-to-Let property. It’s possible that they will tighten their lending requirements, which will require a valuer to have an awareness of the HHSRS hazards and their scoring system.
Potential impact on value
What, if any, will be the impact on value? Our immediate reaction was that any impact on value will be small, because most of the houses affected will be at the bottom end of the market and will already be hit by MEES (Minimum Energy Efficiency Standard). However, this could be too simplistic. While many F and G properties are unlikely to meet the HHSRS requirements, RdSAP is not about fitness for habitation, rather it solely covers energy efficiency.
When considering ‘slips, trips and falls’, the following could impact on the risk:
• inappropriate light fittings meaning rooms are poorly lit.
• issues that make working in a kitchen with hot water, a stove and hot oil more dangerous.
• floor surfaces and grading that if not well designed and constructed combine to become slippery when wet.
• pathways that become slippery when poorly drained.
• poorly located and inadequate power points in rooms, requiring extension cords that cross main paths in the house.
• loose steps.
• missing floorboards or tears in flooring materials.
All the above could quite easily be found in properties with a good energy efficiency rating.
Changes in policies
Inevitably there will be some ‘surprise’ properties, where hazards exist due to design or alterations. Hazards will result in costs and potential voids while the issue is rectified, both of which are risk factors for the lenders. As a result, we may see a tweak to policies on Buy-to-Let and more obligation placed on valuers to report potential hazards and their impact on value and/or whether the house can be let. If this is the case, valuers will have to fully understand the HHSRS. Other professionals providing more general management or letting services for landlords will also need to understand the legislation. This will enable them to ensure their landlords’ properties meet the new definition of being fit for human habitation. Even if the property managers themselves are not liable, they could suffer from a knock-on effect regarding their portfolios and revenue streams should the landlord sell the property. Given the government’s support of the bill, its relatively short length and the political climate following Grenfell, it’s not unreasonable to expect Royal Assent before the end of 2018.