Following on from yesterday (17 May) publication of the Renters (Reform) Bill and Part 1 of my overview of what the Bill does, onwards to the rest of it…
Pets! There has been a lot of fuss about this, but as Tessa Shepperson has sagely observed, it doesn’t really make much of a change to existing law. The Bill adds an implied term that the tenant has a right to request to keep a pet and that the landlord cannot unreasonably refuse such a request. Where the landlord’s own lease forbids pets, or requires the superior landlord’s consent, the landlord is to request this. It is not unreasonable for a landlord to refuse permission if their superior landlord had refused consent, or if the landlord’s own lease forbids pets.
The landlord can require the tenant to take out insurance against damage from the pet, or require the tenant to pay the cost of the landlord taking out insurance. This is exempted from the Tenant Fees Act 2019
The definition of a pet – doubtless to be litigated – is an animal kept by a person mainly for:
(a) personal interest,
(b) companionship,
(c) ornamental purposes, or
(d) any combination of paragraphs (a) to (c);
I have no idea what ‘personal interest’ extends to, but look forward to the arguments over ‘ornamental purposes’.
Statement of Terms and other information – the landlord will be required to give the tenant a statement of terms before the start of the tenancy. Details of this requirement will be set out in regulations.
Tenant notices to quit. These have a period of two months (or less if specifically agreed with landlord). Tenant NTQ can be given at any time. Reversing the usual common law position, the tenant NTQ may be withdrawn if tenant and landlord agree in writing to the withdrawal.
Removal expenses under section 11 HA 1988 – only registered providers will have to pay tenant removal expenses after a possession order on ground 6 or ground 9.
On homelessness, section 195A Housing Act 1996 (duty to offer accommodation following re-application after private sector offer) is to be dropped. Presumably on the basis that there will be no 12 month AST to offer in discharge of duty, and no s.21 ending that tenancy to give rise to a re-application as homeless within two years.
Tenancy deposits. Obviously the sanction of not being able to serve a section 21 notice if the landlord has not complied with the tenancy deposit protection requirements will be no more. There are new sanctions in a new section 215 to Housing Act 2004.
With the exception of grounds 7A and 14, the court may make a possession order:
Only if “the tenancy deposit is being held in accordance with an authorised scheme.”
Or only if “such requirements of the scheme as fell to be complied with by the landlord on receiving the tenancy deposit have been complied with (whether or not within the period mentioned by section 213(3)) in relation to the tenancy deposit.” This is the ‘initial requirements of the scheme’ provision, but it appears that the 30 day limit for doing so is disapplied, so late compliance may enable a possession order.
Or only if “the requirements of section 213(5) and (6)(a) have been complied with.” – Provision of Prescribed information, but the 30 days limit for provision of the PI is not engaged. So again, late compliance is possible to enable an order for possession.
These requirements do not apply if the deposit has been returned in full or with agreed deductions, or if a section 214 claim has been determined, withdrawn or settled. The provisions on ‘replacement tenancies’ are to be removed, as replacement tenancies will broadly cease to exist (as will multiple breach deposit claims).
The other current requirements for service of a valid section 21 notice – the EPC, ‘how to rent guide’ and gas safety certificates – do not get any equivalent here. It remains to be seen what, if any, penalties or restrictions for non-compliance will be brought forward, or if the requirements will simply pass away with assured shorthold tenancies. For the gas safety certificates at least, that would seem short sighted if so.
Unlawful eviction – civil penalties by Local Authorities are introduced for unlawful eviction under section 1 Protection from Eviction Act 1977 as an alternative to prosecution for the offence. A maximum of £30,000. This is a good move as it will hopefully result in a more enthusiastic response by LAs to unlawful evictions than the complicated, expensive and uncertain route of prosecution, which in any event usually resulted in a slap on the hand by a Magistrates Court.
‘Meaning of residential landlord’ – on the face of it this is a rather odd part. It defines – for the purposes of the part – a ‘residential landlord’ as the landlord under a relevant tenancy of a dwelling in England that is not social housing. But the purpose of the part is enable regulations to be made that may alter the definition to include a superior landlord where the tenancy is a sub tenancy, may specify particular kinds of tenancies or licenses, or vary the meaning of dwelling. My best guess is that this is preparatory to regulations that will address ‘rent to rent’ set ups, after Rakusen v Jepsen. But we will have to see.
Further parts permitting subsequent regulations to be made are those addressing Landlord Redress Schemes and the Private Rented Sector database.
The redress scheme, once set up, will be compulsory for all landlords or landlords to be. Failure to be a member will result in a civil penalty of up to £5,000 levied by the LA, or a criminal offence if continued or repeated breach, with a further penalty of £30,000. The redress scheme will provide for independent investigation of a tenant or prospective tenant complaint. Decisions may be enforceable as if a court order.
The private rented sector database (trailed as the ‘portal’) will likewise be compulsory for all landlords and prospective landlords. Entries will be potentially be available to the public, at least in part, subject to regulations. Again, there will be a civil penalty by the LA for non-compliance, criminal offence for continuing or subsequent breach, and additional civil penalty of up to £30,000.
Obviously, the regulations will be key for both of these. But in principal this is a nationwide landlord register.
There is a lot of areas of enforcement by local authorities. A duty to enforce the landlord legislation in its area is imposed on the LA. However, it can also take enforcement action on a breach that occurs outside its area! If so, there is a duty to notify that area’s authority. There may be a lead enforcement authority – regulations to follow.
And finally, before looking at the transitional provisions, the Secretary of State must prepare a report within one year on government policy on standards of safety and quality for exempt supported accommodation and for Part VII Housing Act 1996 temporary accommodation.
The Act will apply:
For any new tenancies on or after the commencement date.
For existing tenancies ‘on or after the extended application date’ which is at the expiry of the existing fixed term, or on a date to be set out in regulations.
However, if there is an extant section 21 notice served before the ‘extended application date’, the tenancy will remain an AST until proceedings are either concluded or time barred.
Rent increases made before the ‘extended application date’ on the basis of a tenancy agreement clause remain valid.
Conduct that could give rise to a financial penalty or offence under new 16E (letting on a fixed term, serving NTQ, reletting property after possession on grounds 1A and 1B etc) will not do so after commencement for existing tenancies prior to the ‘extended application date’.
The tenancy deposit provisions do not apply to an existing tenancy that before the ‘extended application date’ was an assured, rather than assured shorthold, tenancy.
The ‘long lease’ provision will come into effect two months after the commencement date. The illegal eviction civil penalties provision will come in on a date to be given by the Secretary of State.
And there we are… No considered reflection from me yet, just working through it was more than enough. But the new and varied grounds of possession looked at in Part 1 clearly need further thought and work.
Some things that have been promised are clearly not in this Bill as it stands. The explanatory notes say this:
The private rented sector white paper committed to address these challenges for both landlords and tenants through legislation, including abolishing section 21 ‘no fault’ evictions and reforming landlord possession grounds. It also committed to:
a. require privately rented homes to meet the Decent Homes Standard, with the intention of giving tenants safer, better value homes and improving the appearance of homes in local areas;
b. make it illegal for landlords and agents to have blanket bans on renting to families with children or those in receipt of benefits – to encourage landlords to make decisions about who to rent to, based on individuals’ circumstances; and
c. increase councils’ investigative powers and introduce a new requirement for councils to report on enforcement activity – with the aim of helping councils and government better target criminal landlords.
The government is carefully considering how to implement these policies and intends to bring forward legislation at the earliest opportunity within this Parliament.
So the Decent Homes Standard, outlawing benefit claimant or children blanket bans, and more on council’s enforcement powers are yet to come.
Of those, making Decent Homes an enforceable standard is the most intriguing (and difficult), both as to the standard and also who enforces it and how.
It is going to be a very interesting period…