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Landlord licensing in Wales

Must a landlord in Wales be licensed to serve a notice under section 8 of the Housing Act 1988? Justin Bates and Kimberley Ziya report on an important Court of Appeal ruling.

Part 1, Housing (Wales) Act 2014, creates a new regime for the licensing of private sector landlords (and letting agents) in Wales. A landlord who offers a domestic tenancy for rent must be licensed under Part 1 (or must have appointed a licensed agent) (s.4). A landlord who is not licensed and does not have a licenced agent must not serve notice to terminate a tenancy (s.7). In addition, any notice under s.21, Housing Act 1988, cannot be given by an unlicensed landlord (s.44).

A landlord under an assured shorthold tenancy has two routes by which he may seek to recover possession. He may serve notice under s.8, Housing Act 1988 and prove a ground for possession (e.g. Grounds 8, 10 and 11, all relating to rent arrears). Alternatively, he may serve notice under s.21 (notice only / no fault) and seek possession. In either case, the tenancy does not end until the possession order is granted and executed: s.5.

In Jarvis v Evans [2020] EWCA Civ 854 (Hickinbottom, Newey, Baker) Mr Jarvis was the landlord of Mr and Mrs Evans. He was not licensed under Part 1, Housing (Wales) Act 2014. The tenants failed to pay the contractual rent. Mr Jarvis served notice under s.8, 1988 Act and issued possession proceedings. The Circuit Judge held that, because he was an unlicensed landlord, he was not entitled to serve a notice under s.8, 1988 Act (see s.7, 2014 Act). He appealed to the Court of Appeal arguing that a notice under s.8, 1988 Act was not a notice to terminate a tenancy, so was not caught by s.7, 2014 Act. Moreover, that construction was supported by the fact that s.44, 2014 Act, prohibited reliance on s.21, 1988 Act, but not s.8, 1988 Act.

The appeal was dismissed. Section 7, 2014 Act, should be given a broad reading and applied to any notice which was served for the purpose of enabling a landlord to recover possession, even if the notice itself did not achieve that end. It therefore applied to notices under s.8, 1988 Act. The express prohibition on service of a notice under s.21 was explicable as a “belt and braces” approach, rather than any indication that the Welsh Assembly had intended to treat ss.8 and 21 differently.

Comment

The regulation of the private rented sector in Wales has already diverged quite significantly from that in England, and will diverge even further once Renting Homes (Wales) Act 2016 comes into force. This decision provides a clear example of one such difference. The Welsh regime has been held to prohibit any notice as part of a possession process by an unlicensed landlord, whereas in England, the divide between s.8 and s.21, 1988 Act, has been firmly maintained.

Two oddities arise from the judgment. The first is that, whilst service of the notice under s.8, 1988 Act, is prohibited, it remains possible for a landlord to apply to dispense with service of the notice entirely. Secondly, it is still relatively simple for an unlicensed landlord to avoid the prohibition in s.7, 2014 Act. He can either engage a licenced agent for the purposes of serving the notice or he can instruct a solicitor to do so (s.7(7)).

Justin Bates and Kimberley Ziya are barristers at Landmark Chambers. They appeared for the landlord, instructed by Anthony Gold.

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