High Court ruling on EICR compliance: Implications for landlords in Wales
A recent legal ruling has reaffirmed the requirement for valid electrical installation condition reports (EICRs) to be provided to tenants within statutory timeframes to demonstrate fitness for human habitation. Chief Innovation Officer, James Kent, provides an overview of the case, its implications for the sector, and reminds landlords operating in Wales what they must do to ensure compliance.
What is the basis of the challenge?
Under the Renting Homes (Wales) Act, all rented properties (both private and social rented) must be fit for human habitation. Part of a landlord’s obligation to guarantee this requires them to undertake regular (at least five-yearly) electrical installation inspections.
However, as we have always advised, the Act also requires the landlord to provide a copy of the valid electrical installation condition report (EICR) within 14 days of the start of the tenancy or inspection date (whichever is the later).
It is this administrative point – the serving of a valid EICR to a tenant – that has been challenged by a group of registered social landlords (RSLs).
When is a property fit for human habitation?
The RSLs argued that their failure to provide satisfactory EICRs to tenants within the statutory timeframe (by 15 December 2023, following the implementation of the Renting Homes (Wales) Act) did not render properties unfit for human habitation.
This is important, because – provided the relevant clause is contained in an occupation contract – a tenant is entitled to withhold rent during any period in which a property is consdered unfit for human habitation.
Our advice has always been that landlords must complete both ‘parts’ of the requirement – simply obtaining a satisfactory EICR is not sufficient, it must also be served to the tenant within the specified timeframes.
As this judgement makes clear, failure to do so means the property can be deemed unfit for human habitation, even if a satisfactory inspection has taken place.
The ruling applies a broad interpretation of fitness for human habitation and suggests that administrative compliance should be given the same priority as property maintenance to fully comply.
The Court went on to find that the RSLs served the EICRs late, leaving a period between commencement of the requirement and full compliance wherein properties were technically unfit for human habitation.
What are the potential repercussions?
The Renting Homes (Wales) Act enables a tenant to withhold rent if a landlord does not ensure that a property is fit for human habitation.
In addition to a five-yearly electrical safety test, this includes the provision of smoke and carbon monoxide alarms, where applicable.
However, a tenant is only able to lawfully withhold rent if the relevant supplementary term is included in the contract.
Our standard occupation contract template does not include this term (Clause 2.6), meaning a tenant would need to successfully make a claim to court that a property was unfit for human habitation before they could withhold rent.
The Court examined whether tenants are obligated to pay rent when the landlord has not provided an EICR on time, but did not consider whether retrospective claims could be made – that is, where a tenant has continued to pay rent during a period of non-compliance, but subsequently sought a repayment of rent. It is highly likely that such claims will now be made.
What steps should you take?
If you have followed our advice and have met all the requirements for fitness for human habitation, you have complied with the regulations. You might want to try Safe2's tracking form to set reminders for future inspections and ensure your ongoing compliance with legislation.
If you do not have a valid EICR or you have not served a satisfactory report to your tenant, you must do so immediately. You can arrange for a trusted engineer to carry out any property safety inspection via our compliance service, Safe2. Safe2 will liaise with the tenant to arrange and undertake the inspection, keep you updated of any issues or necessary remedial works, and provide you with the relevant paperwork for you to supply to your tenant.
