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Reforming Renters (Reform) Bill – ‘pragmatic’ intrusiveness

03/04/2024

The row about the apparent govt amendments to the Renters (Reform) Bill goes on, principally about the proposed initial 6 month term in which the tenant could not give notice (although also, obviously, about the unspecified delay in introduction of the ban on section 21 for an unspecified period pending a report on the courts’ ability to cope).

Ben Beadle, Chief Exec of the National Residential Landlords Association responded to one such criticism on twitter (‘X’)

It is incorrect to suggest that #tenants will be locked into dangerous properties with proposed changes to the #RentersReformBill – when Minister Jacob Young has committed in his letter before Easter, to look at exemptions for **just that**. It is absolutely right that there are exemptions for dangerous and sub standard properties, but these proposals now strike right the balance. If as Tom says, tenants are unlikely to move after 60 days and Govt cater for dangerous properties, then what’s the problem? Time to stop carping, support pragmatic changes and get the Bill moving. Here’s what Jacob Young said”

Referencing the leaked letter from the Housing Minister, which said, with regard to the proposed 6 month initial term:

“We are considering exemptions, such as the death of tenant, or domestic abuse, or significant hazards in the property”.

Let us assume that ‘considering’ turns into ‘manifesting’, how pragmatic is this?

Death of a tenant – well that is currently a mess anyway in terms of ending tenancies. But who is going to give notice to the landlord? Who could, before appointment as PR (and that takes *ages*)?

‘Significant hazards’ – tenant says “I am leaving after two months because there are significant hazards”. Landlord says “no there aren’t. I want six months rent”. Who adjudicates? Landlord brings a money claim in the county court, tenant has to defend and evidence? It gets referred to an ombudsman and has to be evidenced? In any event, and whatever court or tribunal has to deal with it, there will be a lot of such cases clogging up the systems. It is, let us be honest, a rare thing for a private landlord to admit or agree that the state of their property is hazardous when let, particularly when there is rent at stake.

Domestic abuse – this is probably the worst of all. Tenant says “I need to leave after two months because I am suffering domestic abuse”. Landlord says “You are trying it on, I want the 6 months rent” (believe me, some will).  Then what? The tenant has to somehow evidence their abuse in court proceedings, or some ombudsman dispute or other arbitral tribunal?

This would be frankly intrusive and humiliating, but according to Ben Beadle, it is pragmatic, in order to give landlords the certainty of an initial 6 month term.

When the Bill returns, apparently shortly, there will be very limited further opportunities for scrutiny, amendment or revision. Dropping in potential horrorshows of amends that may well, for example, require a victim of domestic abuse to evidence their abuse to the landlord to justify early notice to quit within the first 6 months, at such a late stage is bad law making. Even worse when it is solely to appease a bunch of Tory backbenchers whom, I think it fair to say, do not have tenants suffering domestic abuse or living with significant hazards uppermost in their list of concerns.

We will have to see the detail of any Govt amends, of course, but it is hard to see any way in which carving out these exemptions would not present huge issues, both for arbitral courts of bodies and for tenants. I think Ben Beadle and I might have different definitions of ‘pragmatic’.

 

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

5 Comments

  1. John-Paul Keates

    Of the many problematic areas of the proposed bill for landlords, the absence of a fixed term was the last thing that needed a change. It’s a sensible change.

    These are homes. People rarely decide to leave their home without a reason. And stopping them doesn’t seem a great idea.

    If a landlord can’t afford a few weeks unexpected void and some remarketing costs, what’re they going to do if the boiler needs replacing?

    Not sure why our chocolate teapot trade body has picked this hill to fight on.

    Reply
  2. Ben Reeve Lewis

    Well said John. of all the hills indeed……………..

    Reply
  3. Ian Narbeth

    I agree that there are many other problematic areas. In particular abolishing s21 will make dealing with antisocial behaviour extremely difficult so the nasty tenant will have his day in court and his victim may have to move home.

    I disagree that abolishing the minimum term is a “sensible change”. One of the reasons for having the Renters Reform Bill is to give tenants more security of tenure. The complaint was that landlords evicted tenants without good reason. Allowing tenants to leave at any time on two months’ notice has nothing to do with that. It does however create problems for landlords, lenders and agents. Landlords will have much less security of income and if they have just paid the letting agent his fee for finding a tenant, will be substantially out of pocket if the tenant leaves early unless agents rebate the fees and expenses pro rata – which does not seem to have been discussed. With a potentially higher turnover of tenants, there will be more wear and tear which will mean more maintenance and redecoration. The cost of that will inevitably be passed on in the form of higher rents.

    Separately, even with a minimum 6 month term it will in future not be possible for tenants to negotiate a lower rent for a guaranteed longer fixed term as the tenant cannot commit to it and landlords will know that.

    Lenders will not be happy that the income stream to service the interest is less secure. That may lead to higher interest rates which in turn may lead to higher rents. Be careful what you wish for.

    The Government continues to interfere with freedom of contract and does not understand how the housing market works. Given what has happened to rents over the past year in anticipation of the Bill, may I suggest tenants’ advocates ponder whether, overall, reducing the minimum term will help the majority of tenants? The statement: “These are homes. People rarely decide to leave their home without a reason.” is true in many but not all cases. Landlords are fearful they will have the capricious tenant who does leave without good reason. In London and certain other locations people who want a “summer’s lease” may sign a lease and give notice the same day. There may not be many but why should landlords have to accept any? If you want landlords to commit to a long term relationship, why shouldn’t tenants do so too? If tenants are granted maximum flexibility (which only some will need) all will have to pay for it.

    Reply
    • Giles Peaker

      Ian

      First off, it is pointless to be fighting lost battles. Section 21 is going, whether under this Govt or the next one. This is a certainty. So, deal with it.

      As John has already pointed out, tenants don’t just leave without reason. The landlord’s (and lender’s) lack of security is not a real problem. The higher turnover of tenant stuff is, bluntly, nonsense. There are also no signs of panicking lenders at all.

      Letting agents will doubtless hate the change because their 6 monthly or annual tenancy renewal fee will go by the wayside. That will save landlord’s money. Agents will be upset. What a pity. I’m fairly sure that landlords won’t be sympathetic.

      As for the rest, tenants being able to negotiate a lower rent for a longer fixed term? Are you serious?

      Which brings us on to ‘freedom of contract’ – all tenancies are governed by statute, and have been since before the second world war, but definitely after, because housing is too socially important to leave to landlords and the market has always been too imbalanced to trust to ‘freedom of contract’. ASTs are creatures of statute, what can be contracted for is constrained by legislation now. But any idea that a tenancy now is the result of an open and balanced negotiation of terms between the parties is a joke. This is not a functioning market.

      As for “If you want landlords to commit to a long term relationship, why shouldn’t tenants do so too?” – well that is the job of landlords, to offer longer term accommodation. If not, go off and do short lets – now without any tax perks for doing so and the huge risk of voids and damage. But if you want the secure long term rent income (as per your second paragraph), what is the problem?

      Reply
  4. Andrew

    “As for the rest, tenants being able to negotiate a lower rent for a longer fixed term? Are you serious?”

    This for a number of reasons does and could happen. Some markets could gravitate to shorter lets as the norm and therefore a fixed year, avoiding the reletting and voids time and costs strengthen a tenant’s position – a rule of thumb is (at least) one month’s rent = one relet. I simply suggest never say never.

    still much might have been addressed with incentives to assured tenancies with these amendments added in. But all governments like a new Act to wave about.

    Reply

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