Fair Rents (Scotland) Bill or Artificial state manipulation of free market rent?10:34 AM, 6th November 2020
About 4 weeks ago 36
The Government consultation on “A new deal for renting: resetting the balance of rights and responsibilities between landlords and tenants” closes on 12th October. I would urge all landlords to make a submission: Click here. You can also email your submission and any comments to TenancyReform@communities.gov.uk Below is an extract from my submission
1. The Government may already have made up its mind on the matter but there are reasons why section 21 should not be abolished for all tenancies. If the concern was having tenancies of 3 to 5 years, removing section 21 throws the baby out with the bathwater. It is proposed tenants can terminate on two months’ notice but landlords cannot terminate without cause. Coming after everything else that has occurred in the past few years this may be the last straw for many landlords.
2. In recent years Private Rental Sector (PRS) landlords have been demoralised by Government actions. In the last four years we have had:
• Restriction of mortgage interest relief so that from 2020 some landlords will pay tax on zero profit – a tax rate of infinity – or on actual losses;
• Removal of 10% wear and tear allowance;
• Right to Rent checks making landlords unpaid immigration officers. Landlords are threatened with up to five years in prison if they rent to an illegal immigrant. It is understood that a total of about 16 illegal immigrants have been caught as a result of the legislation. Given the amount of extra work required of landlords and the disproportionately harsh punishments, the policy should be re-thought. Similar sentences apply to offences under the Terrorism Act. Is that how much the Government wants to work with landlords?
• 3% extra stamp duty which pushed house prices up and which sucks out of the system money that could be spent on maintaining and improving properties.
• The Tenant Fees Act which instead of just capping or abolishing certain fees, has made all payments illegal unless expressly permitted. It will render landlords liable to fines of up to £5000 for a first infraction if they miscalculate interest for late rent payment and charge so much as a penny too much. It will encourage bad tenants to threaten landlords with severe penalties for trivial mistakes. Until the overpaid penny is repaid the tenant can ambush a section 21 application even if they owe thousands of pounds in rent.
3. Without section 21, landlords will become choosier about their tenants. Despite the No to No DSS campaign, how many landlords will take a chance on the “challenging tenant”: the young person coming out of the care system, the person leaving a homeless hostel or a mother with children leaving a domestic violence refuge?
With the best will in the world some people have troubled lives and not all of them make good tenants. If landlords cannot get “problem” tenants out quickly, they will be less likely to take a chance and will choose the middle class employed tenants every time. Start penalising or prosecuting landlords for not taking on the impecunious, troubled tenant and they may withdraw their rental properties.
4. Section 21 prevents a landlord being tied to an unwanted tenant indefinitely. With the abolition of tenant fees the cost of moving into new accommodation will (we are told) come down. With an efficient market and a plentiful supply of housing, tenants can relocate if they have to.
Yes, there are costs in moving and yes people become attached to their home, but plenty of people have to move for work and they manage.
5. Tenant lobby groups such as Shelter and the CAB assert that tenants can be evicted on only 2 months’ notice. That is wrong. Nobody can be compelled to leave that quickly. In practice if tenants refuse to leave it always takes several more months until the tenant is actually required to vacate.
Government might consider longer notice periods for true “no fault” evictions of longer-term tenants. Something like 2 months notice during the first 2 years, 3 months if the tenant has been there between 2 and 5 years and four to six months notice for tenants who have been there for over 5 years?
6. If, notwithstanding the powerful arguments against, s21 is to be abolished Government should also look at “starter tenancies”. Housing Associations use these. They allow the landlord to assess the tenant and get them out after 12 months if they are unsuitable. PRS landlords will be much happier if they can have a starter tenancy for up to 18 months to assess tenants. Appropriate safeguards can be introduced to safeguard tenants from this exemption being abused. It should also be noted that where there is anti-social behaviour, housing associations can demote a tenancy back to an AST.
7. With Section 21, tenants know they will have to leave if the landlord’s paperwork is in order and, despite the Parliamentary draftsman’s attempts to make a missing comma fatal to a landlord’s application, it works better than a section 8 application. Many cases don’t get to court. Section 8 is a slower process and more cumbersome. The landlord has no certainty of getting possession. It is worth the tenant’s while to take his chances. Even if he loses it will still be weeks before he is evicted.
8. Government should look at establishing a specialist housing court with judges who know the law. Unless the court system is overhauled and vastly speeded up BEFORE section 21 is abolished or restricted even more, a bad situation will be made even worse and delays will increase. There will be more section 8 cases, more paperwork for judges to read, more lawyers to be involved and more cost added to the process. Who will pay that cost at the end of the day?
9. British justice generally encourages advance disclosure of evidence. With s21 claims the law positively encourages tenants to take technical points at court such as that a Prescribed Information Form (which the tenant may have never read) was served a day late, it mis-spelled a name or was signed by only one director, not two.
Tenants should be required to raise points in advance and judges must throw out “ambush” defences that are held back until the last moment. If the tenant offers a spurious defence or no defence or does not turn up at court judges should not act as advocate for the defence and delay the process further.
10. What about tenants who won’t ventilate a property properly? A senior housing officer at one council said that in over 90% of cases where mould is found in rented accommodation it is down to tenants’ lifestyles. They won’t open windows, they dry laundry in the living room with the windows closed. When they have a bath it is like a sauna. Without section 21, the landlord could take months even to gather evidence. All the while the fabric of the house is damaged and the landlord will have a bill for thousands of pounds and rental voids while repairs (unnecessary if the tenant had used the property properly) are carried out. Try recovering £5000 out of a £1000 deposit!
A claim under section 8 requires evidence. What of the tenants who complain about the condition of their property but don’t allow access for the landlord to inspect or his tradesmen to carry out repairs? What of the tenant who leaves his dogs alone all day and they bark continuously? The landlord could use section 8 which takes 12 to 18 months. Then, just before the court hearing the tenant allows access and promises to behave or makes arrangements for the dogs.
Does the landlord go to court, pay hundreds or even thousands of pounds for legal representation only to find the judge says: “Well, provided the tenant gives access/ keeps the dogs under control, I won’t order possession”? Or does he wait till next time and start all over again?
11. With selective licensing, some Councils are trying to make landlords responsible for dealing with anti-social behaviour. In some areas they require landlords to issue s21 notices to deal with problem tenants. Landlords must not be placed between a rock and a hard place of being penalised under a Council’s licensing rules but unable to evict an anti-social tenant.
The courts should have a lower bar for anti-social behaviour than the Environmental Health Officer at the Council. If there is credible evidence of anti-social behaviour from two or more witnesses, judges should be prepared to evict.
12. Special consideration is needed for Houses in Multiple Occupation (HMOs or house share). The following remarks also apply to flats with communal areas where one tenant can seriously upset the neighbours.
13. With four, five, six or more people sharing a house sensible landlords try to pick tenants who will get along together. However, from time to time a house mate is just obnoxious. They pay the rent on time but annoy the other tenants. They play music or the TV loudly or insist on watching offensive programmes in the communal areas. They put the laundry on late at night disturbing others’ sleep. They don’t do their share of chores such as emptying the bins. They never wash up. They “borrow” other people’s milk or coffee and don’t replace it. In all of these cases good tenants may leave or threaten to leave.
Another issue is the personal safety of the landlord and property manager in HMOs. If a tenant threatens the landlord or even is just physically intimidating, it will make life very difficult. It is bad enough where a tenant of the whole property is threatening. With an HMO, the property manager will be visiting the house frequently for check-ins, check-outs, viewings, periodic inspections and general maintenance. Rarely does a month go by without a visit. Without section 21, it could take months to gather sufficient evidence of a tenant’s anti-social behaviour to launch a section 8 claim. Even if the court procedure is vastly speeded up it could still take many more weeks to get to court. If the tenant is meanwhile threatening or intimidating other tenants and the landlord cannot give comfort that action will be taken, tenants will give notice to leave.
Tenants’ circumstances change and loss of a job, relationship breakdown or bereavement may lead to problems with drink or drugs so that the behaviour of a previously respectable tenant becomes unacceptable. If they live on their own or with their own family that is bad enough. In an HMO it is much worse.
Without section 21, how long will it take to get such a tenant out? What about the rights of other tenants, especially women who may feel intimidated by a large drunken male? What about their rights to security and a safe home environment?
14. How are landlords supposed to use section 8 in the circumstances I have described? How do we gather evidence? Can we prove that the awkward tenant borrowed the milk on five occasions, failed to put the bins out and left his messy crockery in the sink? Is that sufficient? How much foul-mouthed swearing in front of others is so offensive a tenant should be evicted? How much hogging the TV remote and watching “Naked Attraction” on TV or late night porn is too much?
Do landlords have to run up substantial legal fees, lose tenants and suffer rental voids because a disobliging tenant won’t change his or her behaviour? Without section 21, that is what HMO landlords are faced with. With section 21 we can tell the other tenants: “Please bear with us. We are evicting the trouble-maker.” Without section 21, it will take too long and the good tenants will be gone before the nuisance tenant is removed.
15. If section 21 is not available, landlords will plead multiple grounds under section 8 to improve their chances of success. The more lurid accusations the better. Tenants will be chased for every last penny of rent. Count Court Judgments will be registered against them. Their dirty linen will be washed in front of the court. Landlords will have to spend more to bring cases and tenants will have to call on Shelter, Citizens Advice etc. to defend them.
It is ironic that just as the Government changes the law of divorce to allow no-fault divorce and avoid claims and counter-claims of bad behaviour it will pit landlords and tenants against each other and encourage landlords to make as many complaints as possible. This will substantially increase the workload for an already over-stretched courts service.
It will also mean that more tenants will find they are treated as intentionally homeless by councils for not paying rent and will be unattractive to private and public sector landlords.
Who will house them?
I predict that abolishing s21 will end up hurting the very people Government is trying to help.
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