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By J
10/05/2022

Something to look forward to

The Queen’s Speech was delivered earlier today. As is usually the way, the speech itself didn’t have much to say about anything. What matters – and what contains the details – is the Briefing Pack produced after each speech. It’s available here. It looks like housing law is going to have another interesting year.

There are two major Bills planned for the next Parliamentary session.

The first is the Social Housing Regulation Bill (pg.65). The Regulator of Social Housing (England only – in Wales the Welsh Ministers do the regulation) will be given new intervention and inspection powers, with a more-proactive approach to regulation (short – 48 hours – notice inspections; unlimited fines). Interestingly – there is a clear statement that housing associations will be brought within the scope of Freedom of Information Act 2000. Now that could be a real game changer and is likely to raise some very difficult issues. After all, whether (and to what extent) housing associations are – or should be treated as – public authorities is a huge issue and one that, since R (Weaver) v L&Q [2009] EWCA Civ 58 has been crying out for legislative consideration. It’s an issue that just won’t go away (see also the important discussion in Information Commissioner v (1) Poplar HARCA (2) People’s Information Centre [2020] UKUT 182 (AAC)).

The second, and probably more important, is the long-promised Renters Reform Bill. The end of s.21, Housing Act 1988 is – finally – on the cards. But there will also be “new and stronger” grounds for possession where there are repeated rent arrears and shorter notice periods for ASB claims. I am not wholly clear why it is a good idea to make evictions for rent arrears easier at the time of a cost of living crisis, but I am sure the government will be able to explain that in due course.

There is a promise to make the Decent Homes Standard a legally enforceable standard for PRS tenancies. I’m not sure about this. Decent Homes was a social housing programme and is at least a decade old (see here).  I’m not sure what this is going to add to ss.9A and 11, LTA 1985. Now, one way it might work is if there is a national register of rented properties and all properties must be registered before they can be rented (so the Local Authority has to certify that it meets the Decent Homes Standard) and, lo and behold – we have a promise of a national “property portal”. I wonder… I wonder… I wonder…

Finally, we have a promise of a private sector ombudsman to try and resolve cases without court involvement. I suspect this will cause some division in the housing law world and it will be important to see what the government actually wants this ombudsman to do. Perhaps it might be funded by all the properties in the new national portal paying a registration fee.

In short, there is more to like here than dislike, but much turns on the detail.

What’s particularly interesting is what is not coming in this Parliament. The obvious omission is anything more on leasehold reform. There is *a lot* still to come. We’re waiting for the revitalised Commonhold scheme. We’ve been promised a ban on leasehold houses. We’re told that people who pay estate rentcharges (sometimes called – incorrectly – freehold service charges) will get rights akin to those applicable to residential leaseholders and service charges. There are supposed to be the Law Com reforms on both enfranchisement and RTM legislation. This is a big package of work and it does not appear to be coming in this Parliament.

Linked to that, during the passage of the Building Safety Act (still not published!) the government indicated it might look at making amendments to that Act during this Parliament (in essence, to correct some of the problems that arose as a result of the last minute changes made in the House of Lords). In the absence of a leasehold reform Bill that will be tricky. The legal nerds amongst us (which includes me) will be looking at the Long Title of the Renters Reform Bill to see if it would be permissible to stick small leasehold fixes in that Bill.

 

J is a barrister. He considers housing law to be the single greatest kind of law known to humankind and finds it very odd that so few people share this view.

15 Comments

  1. Mandy Thomson

    You’ve said, “I am not wholly clear why it is a good idea to make evictions for rent arrears easier at the time of a cost of living crisis, but I am sure the government will be able to explain that in due course.” As an advisor to landlords (I work for one of the nationally recognised landlord associations) I can offer an explanation.

    Nearly all the rent arrears cases I hear about from our members are caused by tenants who have the means to pay, but *choose not to*. Many of these tenants are in receipt of state benefits to pay their rent, but are *choosing* not to pass this to the landlord (for example, I’ve been told about tenants who claim not to be able to pay the rent, but can still somehow afford foreign holidays).

    While landlords can apply for direct rent payments when two months arrears accrue, in practice this is often difficult as the landlord may not have collected details such as the tenant’s national insurance number during the application process, the tenant naturally won’t give it to the landlord once the tenancy is established, and Universal Credit won’t readily recognise the landlord as an interested party without these details.

    In addition, tenants who deliberately withhold rent are also likely to commit other tenancy breaches, such as anti social behaviour and damage to the property – both of these grounds are difficult for private landlords to get possession against.

    Reply
    • J

      Sure – one can always find examples of individual cases of tenant abuse. I’m presently involved in one where my landlord client is trying to evict someone who is not paying the rent and has carried out various dangerous works at the property (bypassing the mains electricity!) and who we know owns another property which is presently empty. But those cases are – at least in my experience – relatively rare. Far more common is someone who has fallen into arrears because of something beyond their control – illness, unemployment, etc. In those cases, choices have to be made about where to spend inadequte funds and I can well understand why someone would choose food over rent. That doesn’t make it an admirable or “good” choice and is not to overlook the impact on the landlord; but it is a rational and explicable decision. It’s also likely to be a scenario that becomes even more common over the next few months and years.

      So what to do about that? For my part, I would focus on increasing benefit levels, lowering eligibility thresholds and generally improving the flow of cash into the pockets of such tenants and, in turn, reducing or even eliminating the impact on landlords. That’s the obvious immediate remedy. I don’t see how expanded grounds of possession actually solves that problem.

      Reply
  2. Tom

    Thank you for the update and opinion. The introduction of Section 21 was a significant factor in the growth of the PRS (some would argue it was ‘the’ most significant factor). Without a crystal ball who knows what will happen in the post Section 21 world but my feel is it will accelerate the demise of the sector which nicely fits in with the government’s long-term vision (shift to dependency on the social housing and affordable homes). The interesting thing will be seeing if the government has a plan (for more social housing and more affordable homes) and I am not that confident it does but let’s hope I am wrong (disclaimer: I have been wrong on things in the past!)

    Reply
  3. John (not Jon)

    Surely the increased availability of Buy-to-Let mortgages is what expanded the private rental sector? S21 was just the by-product of lenders’ lobbying. As long as lenders are willing to lend without S21 then there will be a PRS.

    Reply
    • J

      Yes, fwiw, I think the growth of the PRS is due to a combination of factors. Section 21 is one. The end of meaningful rent control is another. The rise of the BTL mortgage. The poor returns afforded by many private pension funds hence making BTL a more attractive investment. They all feed into one another (and I am sure there are other factors I’ve not listed). I don’t understand these complaints that the PRS will die if we end s.21. The houses won’t suddenly vanish. They might leave the PRS and become owner occupied properties but that’s not a bad thing. I do think the gov is trying to change the nature of the PRS and drive out those at the rogue/incompetent end of the landlord spectrum and it does that through a combination of penalties and new regulatory arrangements. But is that a bad thing?

      Reply
  4. Alan

    “all properties must be registered before they can be rented (so the Local Authority has to certify that it meets the Decent Homes Standard)”, this was discussed in our office a few days ago and we calculated that to inspect each rented property each year would require about 105 inspectors just doing these inspections. My fear is that Govt won’t fund Local Authorities for this, or they wont be able to find the workforce and so it will go out to private inspectors and thus looms the shadow of Grenfell and what came out of that, namely, anyone setting themselves up as an Inspector without qualifications or experience.

    Reply
    • J

      As always, money is key.

      Reply
  5. Ben Reeve-Lewis

    “105 Inspectors just to do the inspections”? presumably without addressing any issues that arise from those inspections? There is a great report from 2018 by Dr Stephen Battersby for Karen Buck MP on staffing levels among EHOs, based on the size of the PRS at the last census, which was considerably less than it is now and he estimated 2.4 EHOs for every 10,000 PRS properties in London and 2.2 outside of London and we all know of certain councils who grant licenses without inspections because they lack the staff. When I was Lewisham’s TRO we had 3 planning enforcement officers who had a caseload of 300 cases each. 3 enforcement officers for an inner London borough?!?!?!. As you say J, money is indeed key but if Alan’s authority would need 105 inspectors to cope, we’re talking about off the scale funding, which isnt going to happen.

    The PRS is simply too big to efficiently regulate. The proposed landlord portal will help a lot provided the landlord lobbyists dont persuade govt to restrict the amount of detail that goes into it. They have traditionally fought for landlords privacy. I sat on a consultancy committee at the Home Office for the national database talks over the Housing and Planning Act, I heard their arguments that resulted in no public access.

    Reply
  6. John (not Jon)

    Ben – Are the fines large enough now and recoverable enough, being potentially attachable to the property itself (recent CoA RRO rulings notwithstanding and hopefully to be reversed next year) that it might be worth councils putting rogue-hunting out to tender for private companies to handle? Likewise couldn’t seizing property and rental income under an Interim Management Order be handled more efficiently by a commercially-motivated outsider?

    Reply
  7. Ben Reeve-Lewis

    Safer Renting have been hacking into RROs for the past couple of years with great enthusiasm but off the top of my head I think we have successfully got around £200k in awards but seen only £5k in hard cash. Admittedly the type of landlords we deal with are the solid criminal element, not Timothy and Letitia doing a buy to rent pension plan but they form 80% of our 250 harassment and illegal eviction cases per year, which is not a few bad apples

    IMOs drive us mad. They really are a nuclear deterrent but despite them being a “Duty” 99% of councils shirk it under the same argument “We dont have sklills, knowledge or resources to manage a PRS property” but there is nothing in law that stops them punting the work out to a local letting agent. Can you think of a worse penalty for a criminal landlord than to have control of their property wrested from them along with rental income? but it just doesnt happen. If such threats were real, Safer Renting could broker so many deals and bring landlords to the table

    Reply
  8. John (not Jon)

    “there is nothing in law that stops them punting the work out to a local letting agent”

    This is exactly what I had assumed they would already do. It’s no wonder so many so-called “good” landlords resent paying for HMO licences if councils overlook a seemingly obvious income stream from rogues and criminals that generally aren’t paying such licence fees themselves. And yet people wonder why BoJo wants to pare down the inefficient public sector. Maybe the Government could force councils to get more familiar with implementing IMOs by pressuring them to go after rogue landlords with suspicious wealthy Russian connections.

    How much of that £200k was actually due to harassment or illegal eviction (even if the easier-to-prove RRO reason used was licencing) ? As I’m sure most harassment issues are caused by either genuine or strategic/protest arrears is there at least some consolation in that a portion of that £200k not recovered would be offset by what the tenant owed and presumably got away with not paying?

    Reply
    • Giles Peaker

      I’m sure you didn’t mean to accidentally equate civil debt with criminal offences, let alone justify illegal eviction and harassment, despite you appearing to do so.

      But any rent arrears during the period of the offence are taken into account in the making of an RRO, so the answer to your question would be no, no consolation, because no offset.

      Reply
  9. John (not Jon)

    Not intentionally equating anything to anything else and certainly not meaning to justify criminal behaviour by a landlord. Oops!

    What I was trying to suggest was that in situations where a tenant has got themselves into arrears, either unintentionally, or by the landlord putting the rent up excessively or by the tenant strategically attempting to, for example, pre-pay himself an unprotected deposit and penalty award that he knows he might struggle to recover from a Ltd company if he sued – for any of those reasons for arrears the landlord may behave illegally rather than try to claim the arrears in court and face various counter-claims. But such a landlord is also more likely not to be licensed and an RRO for that is a sure bet compared to proving harassment. Hence in such cases even if the RRO could not in practice be easily recovered, the tenant still has the benefit of having the amount of the arrears effectively written off because the landlord would need to restore the Ltd company in order to sue, yet even then the tenant could obtain an RRO award (minus the non-qualifying arrears, let’s assume less than six months’ worth) and use it, plus perhaps also his actual deposit and penalty claims, as a counter-claim. I hope that explains it better.

    Reply
    • Giles Peaker

      It does, but as I said, arrears (at least during the RRO period and probably before the RRO period) are taken into account in the RRO, so any RRO award will be on rent paid only. This makes an RRO award of potentially limited use against a claim for arrears.

      Reply
  10. Ben Reeve-Lewis

    John IMOs are not an income stream for local authorities. They use the rent to carry out repairs and have to source replacement tenants and any money left over from these liabilities still has to be handed over to the landlord

    Reply

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