…says the RLA. Personally I remain convinced that it is a lovely place and we should all move immediately. Why is the RLA less keen you might well ask. Well, the Welsh Government has today published the White Paper I response to the recent updated Renting Homes report produced by the Law Commission (which we wrote about here).
I am not going to follow the fad on television for repeating a mildly edited version of the previous post and then adding a small update at the end. I will only discuss here the new points, changes, and clarifications contained within the White Paper.
The Welsh Government is explicit in in its brief two-page Guide to the White Paper that it is diverging from the English approach to social housing by refusing “to introduce a fixed term flexible tenancy for social housing.” As I have commented elsewhere this seems to indicate a radical philosophical difference between England and Wales in matters of Housing policy. The Executive Summary to the main paper highlights uncertainty and confusion as reducing the willingness of people to move between the social and private sectors, thereby reducing flexibility and social mobility. The Welsh model certainly seems more oriented toward persuasion, flexibility and seduction than the English model which is more compulsive in its style. Wales also seems to be positioning the PRS as a housing partner to the social sector as opposed to the preferred alternative model that seems to underlie the English approach.
Amusingly, the Government also states in the Guide that one of its reasons for introducing the changes is to enhance consumer confidence in the Private Rented Sector. This was actually one of the justifications for introducing tenancy deposit protection. Presumably the Welsh Government considers more trust is required.
Turning to the meat of the white paper itself this is presented with a great deal of belief and passion by the Welsh Government. I am told that the Welsh Housing Minister was extremely passionate when presenting this today in a speech and so there is clearly a great deal of determination to make this work within the Welsh Government.
The White Paper repeats what has already been said before that the Housing Bill later this year will introduce registration and licensing for all PRS landlords and estate and lettings agents. The partnership theme is repeated in several contexts with the paper stating that the objective is not to change the balance between landlord’s and tenant’s basic rights but rather to increase clarity and make things simpler.
The paper makes clear for the first time precisely what will not be covered by the altered regime. The list includes:
- Business tenancies;
- Agricultural holdings;
- Dwellings let with other land;
- Long leases;
- Mobile homes;
- Holiday lets;
- Certain high and low value lets.
This list is a little disappointing as it seems to leave some of the slightly odd and unhelpful exclusions to the Housing Act 1988 untouched.
Specific issues flagged by the paper (see page 28) include:
- New methods of dealing with anti social behaviour and domestic abuse. These are a bit worrying as they sound suspiciously like the proposals from the Westminster Government to make it easier to evict those carrying out anti-social behaviour. Details will be watched with interest;
- A new method of handling joint tenants which will allow a tenant to give notice and withdraw from the tenancy wihtout seriously affecting the other tenants. How this will work inside a fixed term remains to be seen. If it is to allow tenants to escape contracts during the fixed term or replace themselves with unsuitable alternatives it will be very unpopular with student landlords;
- More equality for 16 and 17 year olds by allowing them to rent on the same terms as adults. Again it will be interesting to see how this will work. The current restriction on letting to those under 18 is not that it is prohibited in law. It is just that no landlord will do it because of the common law limitations on title which mean the landlord ends up holding the property in trust for the tenants with all the difficulties this creates for recovery of possession;
- It seems that there will be no change to the landlords repairing obligations under s11, Landlord & Tenant Act 1985. However, they will be required to be written down explicitly in the tenancy agreement so that they are clearer to tenants.
Other changes which are intended to assist landlords include:
- Making the distinction between a tenancy and license clearer and easier for landlords to understand;
- Making it easier for landlords to deal with abandoned property by being permitted for the first time to recover possession without court proceedings in relative safety as opposed to the current method of serving a notice and crossing fingers;
- Making it easier to tidy up joint tenancies by removing jont tenants who have gone from the tenancy agreement;
- By providing some pre-written terms removing the risk of challenge under the UTCCR. I am not sure this is actually a big thing for most landlords who are usually totally unaware of the provisions of the UTCCR!
- Landlords will be obliged to ensure that there are no category 1 hazards under the HHSRS before the letting begins. This will be a big deal for many landlords. The HHSRS is not always well enforced by local authorities and some are prone to finding category 1 hazards in very doubtful cases. There has also been a lot of comment from the Upper Tribunal about the HHSRS system, not all of it complimentary. Imposing a fitness standard is one thing but I am not sure that it should be based on a system of such doubtful value;
Implementation is planned on a “Big Bang” model. That does not mean that a gangly-looking nuclear physicist is involved but rather that there will be a set date where all current tenancies that are covered by the new legislation will convert to one of the new tenancy types. There will then be a period of time for new rental contracts to be issued, presumably so that most tenants will transition seamlessly onto the new agreement style on a tenancy renewal or by moving house. The timetable proposed has this occurring at some point in 2016.
And what of the RLA? Well they say that the changes will cause a detriment to landlords in the PRS in terms of a significant increase in administrative and legal costs. I am personally less convinced. There will undoubtedly be one off costs at the outset and there will be problems for some landlords as they struggle to get their heads around the changes. However, this cost is not in itself a good reason not to make legislative change otherwise we would never change anything. What longer term costs the RLA is alluding to is much less obvious and I would go so far as to suggest that it will be a bit of a case of swings and roundabouts in that the increased cost in one area will be balanced by reduced costs and increased flexibility somewhere else.
The White Paper is in consultation until 16 August 2013 and you can comment on its provisions. Let us know what you are going to say.
Lastly I wanted to say that this is a big achievement for the original team, headed by Professor Martin Partington, who produced these proposals for the Law Commission in 2006. They have come full circle from early interest in their ideas from Government, through a true winter of discontent when they sat in the wilderness (metaphorically, not physically), to a rosy dawn where their ideas will finally see the light of day. All the credit for the positive aspects of these changes goes to them.