How will Brexit affect landlord and tenant law?

Tags: , , , , , , , , ,

The decision to withdraw from the European Union will have a big impact on many aspects of British life. In this week's guest blog, Ben Gosling explores the potential impact of Brexit on landlord and tenant law in the UK.

The only thing we know for certain that Brexit has brought is uncertainty. One of the leave campaign’s many refrains was ‘take back control’, meaning, ostensibly, regaining parliamentary sovereignty. But it transpires that neither the leave campaign nor the current government has a plan as to how this should occur.

A great deal of PRS legislation comes from the EU

A large number of the rules that govern the private rented sector come from the EU, in the form of directives and regulations.

For a country to leave the EU, it must invoke Article 50 of the Lisbon Treaty according to “its own constitutional requirements”. In the UK’s case, this means repealing the European Communities Act 1972.

At this point, EU regulations will no longer apply in the UK. This will create several gaps in the UK’s legal framework that the government will seek to patch over as a matter of urgency.

The government will recognise the enormous amount of difficulty this will entail. Their solution may be to pass a transitional act that upholds the requirements of all EU regulations currently in effect. Such an interim act would give the government time to review each law one by one and decide whether to keep it, repeal it or replace it.

In any case, do not expect an overnight bonfire of EU-based legislation. The process is likely to be gradual and involve a protracted period of uncertainty.

EU directives are already enshrined in EU law

Regulations are self-executing legal acts that apply to all EU member states automatically. When EU law no longer has primacy over UK law, regulations will cease to apply.

Directives, on the other hand, are ‘transposed’ into UK law by acts of parliament or statutory instruments. (Primary and secondary legislation, respectively.)

Primary legislation is freestanding and will remain in place. An example of primary legislation that implements and mirrors EU directives is the Equality Act 2010. Among other things, this Act prevents landlords from discriminating against tenants when letting property.

EU-derived secondary legislation is passed in accordance with the European Communities Act 1972. Will repealing this Act nullify all such legislation? Or will it simply prevent ministers from passing more? If repealing the 1972 Act also results in the repeal of related legislation, then there will be further holes in domestic law.

Relevant EU-derived secondary legislation includes:

  • rules that protect tenants from misleading property advertisements;
  • rules that require landlords to provide and display energy performance certificates (EPCs);
  • rules that will make it illegal to let the least energy-efficient properties;
  • rules that oblige landlords to install meters and/or heat cost allocators in HMO properties;
  • the rules of the mortgage credit directive, which has affected the availability of landlord mortgages for some individuals.

It may be that, if there is a way for the government to uphold this legislation, they will. Seeking to override hundreds of statutes that are already part of UK law will create needless work for legislators. In any case, though, the process will be gradual, and it is not yet known which of these many laws will still apply when the process is complete.

Pipeline legislation may take lower precedence

Policymakers have an unprecedented amount of work ahead of them. Because of this, changes in law that we expected to see might not come so quickly.

Proposals to extend mandatory licensing to more HMO properties, for instance, might be shelved.

Secondary or ‘delegated’ legislation also plays a large part in bringing into effect some acts of parliament that have already passed. This may entail delays in the implementation of laws that affect the operation of the rental sector, such as:

 

It’s impossible to predict with any accuracy what the changing environment will bring. The best advice for both landlords and tenants is to prepare, and be ready to adapt as required.