The Renters’ Rights Bill was published today, Wednesday, and received first reading. It now looks set for second reading and progress through Parliament after the party conference season. Parliamentary time allowing, there is a good chance it will be an Act before the new year. This is particularly important to note for reasons that will become clear.
There is a lot in it, and, while it is recognisably built on the structure of the late Renters (Reform) Bill (our notes here and here), there are some significant differences and new things. For brevity (but this will still take two parts), I’m going to concentrate on the differences, so you may want to review the above linked previous posts on Renters (Reform) Bill for more.
Let’s start with the big one – the end of section 21. As before, this is accomplished by ending assured shorthold tenancies and turning them into periodic assured tenancies, with a term of no more than one month.
However, and this is the huge difference, there are no transitional provisions for current/pre commencement fixed term tenancies. Rather than the confusing and unwieldy ‘when the fixed term expiries or after 12 months from the commencement date for new tenancies’, there is a single date (at least for private tenancies, there may or may not be a separate date for housing association ASTs). At that point, all existing ASTs, whether statutory periodic, contractual periodic or in a fixed term, will become as assured periodic (save where there are existing possession proceedings, including under section 21).
That date is to be specified by regulations. But I would expect it to be not very long after the Bill has Royal Assent.
There has been, inevitably, considerable debate about this approach. My view is that if landlords are going to pre-emptively serve section 21 notices, they will do this as long as they can regardless of any additional transitional period, so it makes sense to make the period clear and limited. I don’t think that, given the history since 2019 when it was a Conservative manifesto commitment, Labour’s manifesto commitment and the clear commitment from the Secretary of State to ‘day one’ ending of section 21, anyone can claim to be taken by surprise.
So, the concomitant new grounds of possession.
As with R(R)B, there are new grounds of possession for ‘landlord wants to sell’, and ‘landlord/landlord’s family member wants to live in the property’. As grounds these are in the same terms. I have the same concerns about the evidential requirements for these grounds that I did before.
However, there are changes to when these can be used and the notice period required.
Neither of these grounds can be used in the first twelve months of a tenancy. (For existing tenancies that are ‘converted’, that 12 months includes pre-conversion occupation by the tenant).
Both grounds require 4 months notice by the landlord.
These are, I think, good changes that go some way to soothing the worries over the abuse of these grounds that has been apparent in cases in Scotland.
Further, the restricted period in which a landlord having served a notice on these grounds cannot re-market or re-let the property is to start from the date of service of the notice and end 12 months from the date of expiry of the notice, or 12 months from the date of particulars of claim if a possession claim is issued. Breach of this is subject to penalties of up to £7,000, by local authority enforcement.
Other grounds of possession parts are largely like the R(R)B, except – and these are important:
i) The previously proposed and utterly ludicrous mandatory ground 8A on rent arrears has gone. Which is good as it was unworkable and perversely would have encouraged people to remain in rent arrears to avoid it.
ii) Ground 8 had the required period of arrears at service of notice and at hearing of possession claim changed from two months to three months (or from 8 weeks to 13 weeks). Ground 8 remains a mandatory ground. Notice of 4 weeks will be required.
iii) For reasons which I will confess escape me (but I suspect have something to do with universities being a bit daft and panicky), the ‘students who have a joint tenancy of an HMO, so only get a 12 month term’ ground of possession is still in there, extended to any student in an HMO with the proviso that if it is a joint tenancy they all have to be students.. I think this only works to capture a sub-set of a sub-set of the student accommodation market, so is a bit pointless, and that student market landlords could adapt to any perceived problem of a joint tenant continuing in occupation after the summer by simply granting individual tenancies of rooms, not a joint tenancy of the whole HMO. (This would have the additional benefit to parents of students by meaning they don’t have to be guarantors of all the rent for the entire joint tenancy). But there we are. I expect the terms of this ground to see a fair bit of court action including appellate level.
Universities’ own accommodation continues to be exempt. There is a question over the status of purpose built private student accommodation, which doesn’t feature (so wouldn’t benefit from the student ground if not an HMO?).
iv) The ASB ground 14 does not have the ‘likely to cause’ change. Factors to be considered by the Court in ASB possession proceedings are to include effects of behaviour on other occupiers if in an HMO.
v) Notice periods will change – 4 weeks for grounds 8, 10 and 11, two months for ground 7. Otherwise the same (though longest notice period applies if a combination of grounds used.)
The other changes to grounds are, I think, pretty much as before, though the revised ground 6 ‘redevelopment’ ground needs some close consideration.
No possession order can be made (save for on grounds 7A and 14) where the deposit protection requirements have not been met. However, there are no similar limits with regard to provision of gas safety certificate, EPC or how to rent guide, as currently with section 21.
Tenant notice to end a tenancy has to be two months notice. There is no restricted period in which a notice cannot be given.
And, to conclude Part 1, some other bits, which are a good thing.
Illegal eviction under section 1 Protection From Eviction Act 1977 can now be subject to civil penalties by the local authority of up to £40,000 (the new civil penalty limit generally). This is much better than the need to bring a criminal prosecution, with all the costs and evidential burden of that, only to have the Magistrates impose a fine of £500 or so. I need to look further on how this would interrelate with an rent repayment order application by the tenants.
While on rent repayment orders, the change to make superior landlords liable for rent repayment orders, thereby overturning Rakusen v Jepsen, is carried over. This is a good thing, because superior landlords really, really need to be wary of rent 2 rent setups, as per this post from Sunday.
And also retained is the change to ensure that no lease of longer than 7 years term can be an assured tenancy. This will take all long leases out of the ‘AST trap’ and make it clear that shared ownership leases are not assured tenancies. This part will come into effect two months after royal assent on the Bill.
For social landlords of shared ownership lessees, this is going to change a lot, from possession proceedings to how they demand rent. I hope they are up to the task.
And that is enough for this evening. But coming up in part 2…
Banning rent bidding – new and a significant change, maybe more so than expected.
Application of Awaab’s Law to the private rented sector.
Mechanisms for rent increases in tenancy and for challenges to rent increases – some significant changes here.
Pets, benefit discrimination and children discrimination (largely as before)
The private rented sector database – some changes, including on access.
Redress schemes.
Rent repayment order offences.
And a new Decent Homes Standard applying to the PRS and social housing!
Many ( dare I say informed) people involved in housing, myself included, believe the end of S21 will not be the panacea the headlines make out, and in fact certainly in the short term is likely to lead to a reduction in PRS stock as landlords sell up, with the attendant increase in Rents.
I also think the numbers affected by S21 are miniscule in comparison to the wider housing sector, and where they are used are nearly wholly connected to the PRS and in the that market’s more transient stock- ( no doubt in London and suburbs).
Therefore congratulations to (London) lawyers on finally getting a solution to an infinitesimal problem, but beware the fire in which the sector will now find itself.
People have been saying this for years. Given that the end of section 21 has been ‘imminent’ for quite a while, one would have expected any dramatic outflow of PRS landlords to have happened. (I am also pretty confident that ‘London Layers’ didn’t have anything to do with Theresa May’s 2019 manifesto, or indeed Johnson’s in 2020.)
I think section 24 tax position and the increase in BTL mortgage rates are more likely factors in any departures. It is not as if possession for any reasonable reason is being removed.
The outflow of landlords does not have to be dramatic for rents to rise. The situation is complicated by ever increasing numbers of potential tenants because of immigration. In a free market, additional landlords and properties would come in to meet the increased demand. That has not happened and since there are more tenants seeking accommodation relative to available housing, rents will rise. Even if there were minimal outflow of landlords, rents will rise if the housing stock does not increase.
If the Government wants to help people who are homeless or struggling to afford housing, encouraging landlords to provide housing would be a good start. Instead the opposite. All are treated as potential rogues and threatened with massive fines. There is nothing in the RRB to encourage landlords, nor anything to penalise rogue tenants (of whom there are many) who lie and cheat and cause deliberate damage. Instead, dishonest conduct will be rewarded. The tenant who secures the tenancy by saying he wants to stay for the long term and then immediately serves notice to leave is free to do so. Tenants will less than stellar credit ratings and without a home-owning guarantor are going to find it increasingly hard to rent in the PRS.
As to R2R, what of the tenant, who contrary to his tenancy and without his landlord’s knowledge or acquiescence, sublets? As you have previously noted, pre Rakusen, the superior landlord would be liable, e.g. for running an unlicensed HMO, merely by virtue of receiving rent. Does the new RRB create even the minutest sanction for such a tenant or grant any protection for an innocent landlord?
On rent 2 rent – The owner is responsible for the responsible use of their property. If their r2r tenant breaches their agreement the landlord can sue them. Of course the immediate objection from property owners would be that the R2R set up is a man of straw. To which one can only say, well yes. So why did you give them control over your property and fail to monitor it?
One would hope that the extension of RRO liability will a) stop a lot of landlords from entering R2R agreements with any but the most solid and reputable providers, and b) kill off the flood of chancers and grifters who infest the r2r world at present. (Note also the personal liability of company directors that is being added.)
@11:53 Giles, I am not talking about owners who let to an R2R merchant. The owner may only find out about the unlawful sub-letting some time later, perhaps when he receives a letter from the Council. OK, he can sue the tenant. 12 months later he might get a judgment. In the meantime, is the innocent owner protected from an RRO or prosecution for having an unlicensed HMO?
If we are talking full blown unlawful sub-let, then there is the obvious reasonable excuse defence. (I don’t think anything is changed on prosecution, just on RROs)
Yes. I would add that as well as section 24, worries about having to upgrade properties to an EPC C made many landlords sell up in the period before that policy was dropped. There is nervousness about it again, although the new government hasn’t officially confirmed what landlords will need to do.
…… the landlord can sue the tenant, Ha, Lol that’s a cracker ;-) ;-) ;-) – you weren’t being serious I take it.
Most offending tenants have nothing to sue for. Truth is that the abilirty to use Sec 21 is the main reason a hell of a lot of tenants were ever ‘ taken a chance on ‘ and offered a tenancy in the first place. That will stop, abruptly.
On the question of the interrelation of a Civil Penalty Notice (CPN) & Rent Repayment Order (RRO): Vadamalayan v Stewart [2020] UKUT 0183 (LC) clarified (§18-19) that there should be no deduction from a RRO for any CPN issued as only §44 of The Housing and Planning Act 2016 (HaPA) was relevant
Yes. I was thinking more of how far the civil penalty could be relied on by the tenant in an RRO application.
If you read chapter 3 para 88 with para 76(2)(b) I’m sure that regs will be added to require the gas safety certificate as one of the docs to be deposited to remain registered on the database. This will mean that the limitations on possession will align with the same restrictions where a deposit is not protected
I’m coming to the database in part 2. However, it is unlikely that the database will be up and running before the new tenancy regime kicks in.
As you know, Giles, gas is one of my pre-occupations and I remain concerned for the safety of rental occupiers. Of course, the requirements for GSR to rely on a s21 Notice were not ideal and we all agree the 1998 Regs are not the happiest piece of drafting (and then some). However, in the face of what the statistics prove is entirely toothless enforcement by HSE via the criminal sanction, at least there was some effort to make landlords comply with the bare minimum of the annual check (or, following Trecarrell, at least one check before occupation and one before s21 notice). If there is a complete removal of sanction for failure to carry out any gas safety check, I say it’s a backward move and potentially jeopardises the safety not only of occupiers but of neighbours. The loss of the EPC / HTR requirement not so much.
I think it likely – without being at all sure – that the regs for the landlord database will require uploading current GSC, EICR etc. If so, that would potentially be effective, even better than now. But there is likely to be an interregnum between new regime and the establishment of the portal.
I can identify some issues.
They say ending fixed terms is partly to stop those being locked into substandard accommodation. If this is so why is purpose built accommodation exempt?
Also this will make it hard for landlords to plan ahead. Tenants and Students might want just to move out or just want to cause mischief.
For example on this and awaabs- its application.
For example a family friend had a troublesome tenant(with asthma allegedly )who shortly after moving in stated mold was ‘everywhere’. His managing estate agent went round next day.
He asked were is this mould and tenant refused to say, so looked without help to find in the end one very very small spec(subsequently treated and removed in). A few small cobwebs behind a wardrobe were met with the tenant decrying with see look how mouldy it is before being told they are cobwebs.
So then a month later same claim of mold everywhere with a report from company claimed it was ‘very dangerous’ briefly and then went straight on to suggest their unique fog technology treatment at a cost of 2k would sort it .
So this concluded later with the tenant saying a further time its still mouldy. So he had the environmental health to
round to inspect the entire house. The conclusion was no problem at all regarding mold or damp. There was other minor issues that were never even raised by the tenant(and some of these were obviously caused by the tenant). The manager talked to the inspector and was met with laughter when asked so the property is not dangerous.
So under this what was said family friend to do? Straight away spend 2k on a problem was not there? After all it is in the interest of damp treatment companies to claim issues are present.
This tenant was found with cigarette packs so any claimed health decline re his alleged asthma may well have been that. The rest of the house mates never backed his assertions. The troublesome from the very beginning was threatening legal action i would also add.
Another example was same family friend had a group of students claiming house damp and moldy everywhere and subsequent ill health. Again the managing agent visited and asked were is this mold and just got the silent treatment. So asked them to provide photos. In the end the photos provided months later to assert the mold/damp were metely a camera strap purported moldy in their view. Also was some shoes which in fact was mud (bit hard to believe they did not know this). Soon after they stated they had reported the issues to the council. Consequently the manager/family friend never heard back from the council whatsoever. This same property had a group of medical students staying 4 years and never had any issues with mold/damp, so I suggest it was fabricated. Under this legislation the family friend might well have had this group just move out. The idea this is to stop people being stuck in substandard accommodation is ludicrous a property can not decline drastically in 12 months. No this is to make it hard for non purpose built student accommodation imv.
If a landlord is expected to go without rent for 3 months before anything can be done? If this was for the hardship cases in x situation perhaps and arguably not enough. But what if the rent is readily affordable or on the low side and the tenant is just having a laugh and no doubt in hearing will go just below the 3 months as happens now. The landlords will have no incentive to charge low rent. So a flexible approach rather than one size fits all. Action on Tenants defaults on rents in Australia can be started in as little as 2 weeks and I don’t see any move to increase it.
Not being able to sell in first 12 months? This seems to apply even if tenants are staying. Given house prices what if landlord passes away and said estate is subject to inheritance tax( which has to be paid in 6 months with interest applying after)?
This is imv is just to make things harder and to bit by bit replace middle class driven rental sector for the mega corporate (build to rent sector) which I suggest will if utilities are anything to go by people won’t be overly happy with the result.
Samuel, I’m a bit lost. The two month tenant notice period is the bit that supposed to help people stop being locked into substandard accommodation.
I don’t understand the relevance of the tenant raising what turned out to be a non-existent problems. No works needed doing, and the tenant wouldn’t have a claim.
Nor do I understand the second example. What tenants move out as a group because of a non-existent problem?
You don’t have to wait three months on arrears. That is just for the mandatory ground. The discretionary arrears grounds remain.
The 12 months is of tenant’s occupation. So the new landlord, or the estate of the deceased landlord, will be able to rely on any period of occupation prior to the death of the landlord. But this is, forgive me, a ridiculous objection. What happens now if the landlord dies during a 12 month fixed term AST?
Well they might move out for various reasons none to do with standards. They may fall out they may want to be closer to the campus, etc. So hardly fair for student landlords could be out of pocket due to this. As said in spirit of fairness it should be applied to purpose built and halls of residence. After all i think I read hackney council failed to do the electrical safety check for a large number of properties. So big landlords can fail so why are purpose built and halls exempt? Or students may just infer they are staying on the don’t and said landlord will same problem. Where currently landlord can do another tenancy.
Even if a tenant were very rich a landlord can not have the property back for considerable time. But a tenant can just leave with less notice.
So treating tenants the same be they rich or vulnerable is not particularly sound
The tenant would not have a claim? Had the council not gone round they may well have done. After all there was the company claiming it is very dangerous remember.
There is ample legislation currently just not enforced this will probably be the same. And just make things harder for landlords or possibly may make a mistake. For eg I read a rent repayment order of around 50% was made when a landlord had a selective licence rather than a hmo one. Hardly proportionate to the supposed harm. People are compensated less for assault. And minor admin mistakes or lost paperwork such as to do with the depositcan have drastic consequences. No one would suggest someone having a unfair dismissal claim thrown out because they got a date wrong but landlords are expected to get it completely correct.
Plus forcing punitive costly improvements relative to the gain.
For eg my family friend has a property of 66 rated epc (just below c) but labour wants C. So to get that the epc suggests solar water heating costing 4k and saving in bills would be only 30 or so a year. When minor adjustments at much less cost save pretty much the same in energy bills
We all want good standards but at what cost relative to the gain is the question
Since 2015 what legislation have been good for good landlords? I can only think gas certificates are like mot
So imv its all stick no carrots. For instance if they want a landlord database why can’t there be a rogue tenant database?
As for the inheritance issue unlike now they would not be allowed to sell it at all
On the inheritance point, that is not true. The property could, like now, be sold with sitting tenants. There is presently no way to get tenants out to sell before the end of a fixed term. So I really don’t get your point.
On student lets and tenants falling out, isn’t the answer to give them individual tenancies of rooms, not a joint one of the whole? Far easier to replace a single departure.
Purpose built halls will still have to comply with licensing, safety requirements etc.
You are actually wrong on unfair dismissal claims. The Employment Tribunal has a very tight and required set of deadlines. Cases are routinely thrown out because not started by the required date.
The EPC C requirement is not yet set in stone, nor are the related rules and exceptions. We will have to see on that.
The rest sounds like a general whinge and excuses for bad practice, I’m afraid.
I think a happy medium would be if it truly is to stop being locked into substandard accommodation. How about subjecting the 2 months notice – to if a property has had a improvement notice as works with section 21 currently. As stated they may be subject to licencing and safety etc but they still have the fixed dates. Why is that not good enough for the private landlord? So if say a student changed his mind about being a student they could leave a private landlord quickly and at less cost than if they changed their mind will purpose built/halls of residence. They could just move because they want to live somewhere else. Signing a tenancy is serious should not thrown away at a whim. After all a landlord (quite rightly) sign and tenancy and then say before the moving in date say I found some one else paying more so your tenancy is null and void.
Having individual tenancies opens it up council tax per the room as has happened a number of times, Also when it comes to deposit deductions if it was individual rooms unless I am mistaken unless you can who did what damage you would not be able to make a deduction.
As stated rent arrears should at least reflect the circumstances of said tenant. Treating them all the same regardless of position in life can surely not be right.
Re epc rules well, before the tories scrapped them I think it was suggesting increasing the cost exemption to 10k.
I maintain this is just is about making it harder for landlords rather than anything else. Take the winter fuel allowance in spirit of fairness they could have removed it as a expense for mps – but they did not.
It isn’t only about being locked into substandard accommodation. Tenancies will be open-ended periodic. So the tenant needs to be able to end it.
This idea that tenants will be ending their tenancies on a whim or to be mischievous strikes me as very far fetched.
Individual room tenancies – these are students, I thought, so what council tax?
Deposits – pretty sure there can be ways around that for common parts.
Rent arrears – why are you talking about treating joint tenants individually on rent arrears – they are jointly liable. Don’t you get the guarantors to sign up to joint liability?
The tenant needs to be able to end it. Alright but why are the landlords allowed an exemption then? Don’t the said tenants deserve that flexibility? You say they tenants won’t leave on a whim on my aforementioned examples in both cases they wanted to leave on purely imaginary problems. All I know for decades the in particular the student rental scene worked fine pretty much and now they are changing its fundamentals all on very very rare examples where there has been a change of circumstances.
In particular for students landlords this is to basically to make life harder for the smaller student landlords to promote the bigger, more expensive and not necessarily any better accommodation. You just have to see parliament is promoting build to rent more. They promoted the utilities being privatized as being better and people don’t think how great they are.
People cite Germany as a model for the rental scene but from what I have read there is 2 significant differences that even I am aware of 1) Tenants up expected to pay for property maintenance of most kinds and furnish places almost always.
2 rental property is cgt exempt after 10 years ownership and presently the mood music if all about cgt going up.
So in summary it seems all the measures are pro tenant without the some of the more pro landlord caveats.
All of it spoken in terms of only bad landlords need worry and good ones not. But the good landlords are effected to. As shown the family friend will all but certainly will be expected to 4k and upwards to get the epc rating to C to save very little in bills. Or chances are get a heat pump at a cost of 8k also. This is when the property is perfectly fine. Where I not living with my parent at present I know I would rather have a slightly lower epc rating than pay considerably more in rent to pay for a epc improvement.
In a purely theoretical scenario have a run down poor standard hmo that is licenced (but it was not at the time) not liable for a rent repayment order but another one which is high standard but merely does not have the ‘licence’ and it is liable for a repayment order.
Re rent arrears was not talking students here just generally speaking you could have a landlord who has a tenant flying round the world and can afford the rent generally just making a mockery of paying the rent it all being treated just the same as someone it is a real struggle
There is a special ground of possession for student HMOs.
I’m sorry, but I am struggling to see tenants not being locked into a 12 month contract as a major challenge to your business model.
Re no fixed-term tenancies of more than 7 years can be assured, they are going to have to amend that to avoid it being abused. With the abolition of s.21 notices, it seems ripe for abuse if landlords are able to insist on tenants taking terms for seven years or more. I, as landlord, grant a 7 years and a day fixed-term. It includes a tenant and landlord right to break at any time after, say, six-months. This gives me (1) a right to forfeit for non-payment of rent, (2) I am not caught by s.11/9A, (3) do not need to protect the deposit and (4) I can terminate by a break-notice at any time after six-months therefore by-passing the new legislation. The tenancy will not be protected under the Local Government and Housing Act 1989 because it isn’t at a low rent.
I accept that this is all dependent on the tenants agreeing to take the seven year term and it may happen rarely, but if everyone starts doing it they may not have much choice and this would not be the first time that in an unequal bargaining relationship a party is required to agree to something they don’t want.
Somebody with the ears of the relevant people please take note. It should not be difficult to sort out (i.e. the exclusion only includes fixed-term with no break or, perhaps better, on exercise of break becomes an assured tenancy if occupied as only or principal home and not at low rent).
Hmm
The lease would of course need to be registered with the Land Registry, and would doubtless be a breach of any BTL mortgage terms, so I suspect such occurrences would be few and far between. But I take the point. Will do what I can to pass on. The ‘no break clause’ seems the easiest way to do it.
Even if registered (bit of a pain but not insurmountable) it could still be terminated early. More likely, even if it wasn’t registered, would still be an equitable tenancy and for all intents and purposes wouldn’t make much difference to anyone. Take your point re BTL mortgage terms, but over time mortgagees, once they understand things, may not have a problem with this arrangement.
Yes, it is worth a quick amend to avoid any cunning plans
The current state of the law wrt to L&T 85 s11, is that if the fixed term is of 7+ years, s11 will still apply if the contract allows the landlord to break the fixed term inside 7 years (L&T85, s13(2)(b)). I hope and expect R(R)B to echo that.
It doesn’t touch that as far as I can see.
In fact, if it does work to avoid security of tenure, BTL mortgage companies might even actively encourage it.
If there is to be an amendment to prevent abuse of a 7+ year lease term with a break option, it will need to differentiate between a truly abusive break (at will) from a conditional break which exists for genuine reasons (eg following damage or destruction)
I’m surprised you didnt mention new mandatory ground for possession 6A – the antichrist of all possession grounds. We’ve been raising Cain about this since last year and I am really surprised it’s still in there. It turns retaliatory eviction into a standard requirement.
Not changed from the R(R)B, so I didn’t add further comment. On 6A I said before
While the logic is there – the properties cannot be legally occupied in their present form of occupation, this does feel like punishing tenants for the landlord’s unlawful actions.
Everyone I know in housing enforcement (and thats a lot of people) immediately says the same thing about it, knowing the possible results enforcement officers may hold back from some action in case it ends up making the tenant homeless and, when word starts circulating, many tenants will be cautious of reporting problems for the same reason and allowing a landlord who has breached a banning order to get mandatory possession in order to avoid being prosecuted by the local authority is just plain barking.
I don’t disagree. But the problem remains, where there is eg a prohibition order, or a banning order, and s.21 is not available, what is the solution? A prosecution of a landlord breaching a banning order where they have no possible way to get tenants out would also be unlikely to be successful…
Would a discretionary ground be the solution? Landlord needs to make a case as to why they need vacant possession in order to comply? Including evidence of discussions with tenants about options for access/temporary decant etc? The last leg of the ground also looks as though natural overcrowding -> everyone in an HMO loses security of tenure.
Currently assured shorthold tenants have the right in the first 6 months of their original tenancy to apply to the F-tT for a rent reduction if their contractual rent is excessive (Housing Act 1988, section 22). I have gone through the RRB and can see no reference to s22 and no parallel provisions that would allow new “assured” tenants to make such an application. (I may well have overlooked it.) Does this mean that the bill, as it stands, simply does not interfere with the contractual rent levels agreed by the parties? If that is the case then ditching s22 is missing a relatively simple opportunity to prevent excessive rents.
I believe the new section 14 (at clause 8 of the Bill) allows for an application in the first 6 months.
Thanks
Where are you finding “purpose built private student accommodation will be exempt from Renters’ Right Bill generally – these will be contractual tenancies or licences”?
Good point. That was my understanding, but doesn’t seem to be in there! I’ll see what I can find out. I’ve changed the post in the meantime.
This is a summary of the main implications for RROs from the RRB:
https://getrentback.org/blog/2024/09/12/rros-the-rrb/
briefly:
RROs can be for TWO YEARS’ rent (doubled)
Tenants have TWO YEARS in which to make an application (doubled)
SUPERIOR landlords are liable for RRO applications
Officers of LIMITED COMPANY landlords may be personally liable for RRO applications
Yep, coming in Part 2. Plus additional RRO offences.
Can you clarify the position for freeholders of flats and RRO, would they be considered as the superior landlord and subject to the RRO?
As it stands, I think technically yes. But in practice, I think that they would either have a full defence, or not be a person managing or in control as not getting rack rent, depending on the offence.
Thanks
Re students, why “per room” tenancies are a problem:
1) Council tax – the hallways outside of the student bedrooms become liable for council tax.
2) Fire safety – Per room tenancies mean higher fire safety standards required as each room could have an external lock. Also, in most instances, the property is then considered under the 2005 Fire Safety Order act (which is a BIG deal in terms of financial/criminal liability).
As a long term landlord in this space, per room tenancies mean that the HMO property is rented to tenants who do not know each other and this causes big management headaches in terms of student mental health, noise, rubbish and general damage to the property.
Renting to a group that knows each other is significantly simpler and avoids points 1 and 2.
In terms of the ability for students to leave early, the response is simple, the rent goes up 30% to cover this scenario – this is what happened in Scotland – expect the same for the rest of the UK… TANSTAAFL
– Thankfully we have the ability to manage exits which is not available in the Scottish rental market – research student rentals in St Andrews if you want to see the impact on this re tenancy changes.
Hmm – I suspect my point 1 may be rendered moot by the “The Council Tax (Chargeable Dwellings and Liability for Owners) (Amendment) (England) Regulations 2023 act” which treats a HMO as a single entity for council tax (i.e. if all tenants are students, irrespective of per room/tenancy, then the whole property may be exempt from council tax)…
Still leaves the 2005 Fire Safety Order act as a remaining risk here…
Simon –
1) I see you’ve changed your view on that.
2) I’d be surprised if a lot of rooms didn’t already have the locks. But I don’t think the 2005 Order adds much to the requirements under the HMO management regs in any event.
3) I would imagine tenants would still start (and continue) as groups. But currently landlords create all sorts of problems for themselves by agreeing a replacement if someone leaves (see here – https://nearlylegal.co.uk/2021/07/surrender-to-the-churn-deposits-and-shared-houses/ ). Individual tenancies removes all that problem.
People do leave early already – as per churn – So what you are really arguing is not for the convenience of the group, but the convenience of the landlord in holding remaining tenants (and their guarantors) liable for the full rent. I take it this is what you mean by ‘manage exits’.
Look at the plus side – if a group of students wanted to keep on for a second year, no further admin! They just can. No new tenancy, no fresh deposit requirements to mess up, no new guarantor agreements to obtain (and no new agency fees…).
On the fire safety local authority officers will look to LACORS guidance and British Standards when deciding which alarm systems, fire doors etc are needed in an HMO. Generally for room lets each bedroom is the main habitable room of the occupier and will need its own smoke alarm and fire door. In lower risk 2 storey houses where all occupiers come as a group fire precautions can be relaxed with solid conventional doors and smoke detectors needed in the means of escape, living room and heat detection in the kitchen, but not the bedrooms. So it is a big difference if a small property is assessed as a “shared house” compared to a “bedsit” or “room let” HMO. If it’s a 2 storey house and there’s a communal living space and the existing occupiers are involved in selecting replacement tenants for example, then LA officers are more likely to treat it as a “shared house” for fire safety provisions even if the rooms are let individually. There is no strict definition of a “shared house” in either the LACORS guidance or the BS. If LA staff see fridges and microwaves in bedrooms it’s more likely to be assessed as a “room let” HMO. Individual tenancies of rooms are only one indicator and it won’t necessarily mean that fire safety precautions will need to change in small student houses if the type of letting changes from a whole house to room let .
I have Street v Mountford on standby and am dusting off AG Securities v Vaughan and Antoniades v Villiers.
I remain very concerned by the changes to Ground 2 which appear to be directed as assuaging mortgagees of former ASTs but are far too wide .
I have a simple solution sell all UK property, buy elsewhere so that you are not the victim of discrimination injustice and constant disinformation and hate propaganda
I have sold a lot of uk properties and bought replacements in Europe The best move I have ever made It is difficult to over estimate how much easier a landlords life is outside of the UK even taking into account the fact that I am managing these properties from the UK
My only regret is having to tell lovely tenants some of which I have housed for over thirty years that they are losing their home
And where in the EU has lesser regulation on renting?
(Not that I don’t believe you, it is just that I don’t quite believe you.)
I just did a quick check on Spain.
It seems gas safety checks are done every 5 years
There is no requirement for electricity safety check
There is no smoke detector requirement.
while you need to provide a epc there is no suggestion of compulsory energy efficiency improvements. (Huge cost relative to gain – eg my family friend has a property that states 4k for solar water heating to save 30 or so in bills. So 100 years to get his money back.
Tenancies can be one year from the beginning then renewed by the tenant.
State of repair is not a reason to get out of tenancy early.
Policy should within reason being about lessening the need for rises but seems its pretty much all pushing landlord to raise rents.
As stated other day a landlord with a tenant with arrears has to go through same process irrespective of whether the tenant is affluent or not. As also stated the purpose built and halls being exempt from the tenancy rules say it all.
Sam – while your energy is commendable, you are doing the wrong thing in trying to find like for like regulation. Spain, for example, has rent control, and extensions of term up to three years (so not one year). Evictions take two years, by law. Additional tenancy fees are banned. There are enforceable regulations on space, hygiene, repair and energy efficiency, and all tenancies require a licence. (The private rented sector is also tiny in Spain compared to the UK).
But there is no point in doing this country by country – you are looking for ‘like for like’ requirements, and there will be many reasons why those do or don’t exist. The point is that they all have a regulatory burden. As Ben says, swings and roundabouts – are you happy to trade not having to have a smoke detector for rent control on increases (within and across tenancies) of, say 2%?
There is as yet no change to the EPC requirements in law. You appear to be going on about something that may or may not happen and that may take various forms if it does. Which seems a bit of, if you’ll excuse me, a waste of energy.
Having also done a quick check on Germany and Italy there is also no suggestion of epc improvements. There is fixed term tenancies for students.
Rent in Germany can only (i say only) go up 20% in first year. Not forgetting rental property is exempt from cgt after 10 years. Compared what with 24 of perhaps 45% with some even suggesting more in uk.
So it does seem a selective approach to only in same ways make it more like Europe.
I see no reference to rent repayment orders anywhere in Europe. Nor obtaining a equivalent hmo ‘licence’. Nor a ‘decent homes standard’. Which i suspect will probably insisting on new bathrooms and kitchens after x years even if the current ones are perfectly fine. So yet more pressure to raise rents.
Broadly speaking expects the same or even of landlords than at least the major European countries.
As the subject of greener grass is on the table again I can recommend the Tenlaw project, a study of various components of comparable landlord and tenant legislation amongst the 27 EU states. It really is. swings and roundabouts situation.
https://portal.research.lu.se/en/projects/eu-commission-grant-agreement-id-290694-tenlaw-tenancy-law-and-uo
And with the latest legislation what would you say the situation be then? Given things like rent repayment orders/Awaabs law/EPC mandatory improvements for even perfectly decent homes. I would suggest it would be the most pro tenant in Europe? Its worth noting being a landlord is not even treated as business in the uk and as such any moderately sized landlord estate is subject to 40% inheritance tax vs 1/2 of europe that levies 0% or considerably less – germany 19% up to 6 mil for every recipiant or italy 4% above a 1 million. So any ‘advantages’ for the landlord are not all that much I would think.
RROs are a penalty for breach of requirements, they need a specific criminal offence to have taken place.
Awaab’s law does not introduce any new repairing obligations, just a timescale within which defects must be addressed (but not, I think we’ll find, works completed). Landlords currently have ‘a reasonable time’ to address defects. Awaab’s Law basically will just say what that reasonable time is.
EPC improvements are not yet law. When proposals come out, then you can direct your energy (sorry) to them.
And tax – what has that got to do with regulation of the PRS? We can all whine about tax.
Hi Giles, If I were in that position far from insisting on a 2% increase per year (presumably?) I would in fact be only to happy have rents considerable less than they are generally speaking. For eg having done random location checks of the housing benefit rates I would be happy with rates even less than that. That would be subject to things like being to evict a deliberate and with no reasonable excuse non payment in much less time. However on the other side I of course propose a longer period for those that have a valid reason.
To not having being obliged to get new kitchens and bathrooms every so often if the current one is perfectly fine and only flaw would be its age. Similarly expensive energy efficiency improvements. Such as as already stated solar water heating/solar panels/ or a new one ‘improvement’ solid wall insulation at a cost of 7k (according to google) to comparatively save very little. To heat pumps (around 3x gas boiler cost and incidentally lowers the epc rating ) .Obviously the modest things such as cavity wall insulation/loft and the like would be fine. Just as with the purpose build and halls of residence will be exempt from the tenancy legislation (when the reasons for it apply just as much to them) it is to my mind very revealing that initially (or maybe still?)the rent control proposals in Scotland were going to exempt build to to rent from the measure. What is any reasonable explanation for that? Sounds like to me that this is all about making harder the smaller akin to small business landlord to make it just big corporate. Whom I am sure will not get fined much relative their income as with the utility companies . Similarly when they made housing benefit/Universal credit go direct to the tenant rather than landlord was that to help or hinder the landlord. While I am at it do you see these big build to rent companies renting to people on benefits?
Look at Lewisham council 1/4 of their homes failed to meet the decent homes standard, yet they have a licensing scheme for landlords over concerns over standards apparently. Nor any real consequence for the council – imagine if it was a private landlord.
As for eviction in Spain taking 2 years I have read numerous cases of uk landlords getting on for that length of time.
You say rent repayment orders are just a breach of requirements and are offenses. That may well be right but is that the right classification for some of them? For example now merely not being on a database/obudsman will be grounds for rent repayment orders which said properties could be perfectly fine a landlord being subject to a penalty much more than any offense or harm which is what it should be about. Similarly with a hmo licence these are more admin mishaps than any issue and may not signify any property defect .
Mps routinely declare their interests late and I am yet to find any time they have had any consequence let alone record. Same with mps that get elected on manifestos which they ironically are not binding and breaking have no consequence.
It should be about actual harm or standard only. For example how is it fair that theoretical hmo landlord who is is always responsive and has high standards could lose many thousands in a repayment order merely because it is not licensed. Where as a hmo landlord who fails in many areas and has lower standard but has a ‘licence’ the tenants would not be entitled to anything? I can imagine there will come a time when a landlord fails in anything it may well be subject to a rent repayment order. And of course there will be more and more legislation expecting more of landlords at the same time.
As for Awaabs law again sounds good in theory but application. Would a landlord be expected rectify every, no matter how small a defects or possibility face hefty penalties? For example if its to believed my family friends property manager told him he a tenant who had a 2 story small hmo licenced property with the usual gas/safety electric cert all fine – epc rated C with emergency lighting and smoke detectors in all the rooms and of course up/down stairs hallway with fire blanket and extinguishers. Windows all double glazed. You know what the complaint he received was? It was the vinyl flooring in the kitchen/bathroom had a small bit which was missing and torn and wanted the entire vinyl flooring replaced. Now tell me should that landlord be expected come forced to do that? In all that can go wrong in housing that was it. So in the end will Awaabs law once advised and promoted as a way of dealing with really serious issues just in reality be a legislative means against any defect. If so, that puts more pressure on the rents. And of course when the word gets out that is so, bad tenants wont deliberately just do petty damage like that to get back at landlords will they? After all that is wear and tear and would not even be a deposit deduction and (I would think) and the deposit scheme would look unfavorably (correctly) at a landlord claiming the cost of the entire vinyl flooring being replaced?
My I do see this as all rather over dramatic.. Having both of us sat in the office with the bill then the 88 Act -. The intention since 1980 was clear to bring in market rents and expand long term tenancies rather than relying on 7 or 7 plus year leases encouraging more build to rent with the additional flexibility of the short term PST then AST to allow other entrants on a small scale. The house owning economy changed and therefore a lot of the “issues” could and can be fixed in amendments in particular to the grounds and limiting the use of ASTs. It was foreseeable too that with some of our prime premises that quickly reached over £20 k a year and those on variable service charges were able to R.T.E. removing them as rented homes as they granted long leases, it has been flawed since day one. Id rather see proper amendment rather than wholesale ” renter’s reform” showboating or simply a consolidating Housing Act 2024 now 2025. e,g, landlord’s moving back requires evidence and could be quickly settled by the FTT on paper and if all ASTs must be registered online at HMLR, a restriction placed on it. Less politics please MPs and as the above comments indicate, more practicality.