Rent increase challenge rules spark court backlog fears

Tenants challenging rent increases under new reforms could overwhelm courts, warns industry experts.

An article in The Times explains under the Renters’ Rights Act, tenants will be able to challenge any proposed rent increase at the First-Tier Tribunal (FTT).

Under the reforms, the tribunal will no longer be able to set a rent higher than that proposed by the landlord, even if it finds the market rent is higher. It will also be able to delay rent increases by up to two months in cases of hardship.

Landlords in limbo

The Times reports that any rent increase upheld by the tribunal would take effect only from the date of its decision, rather than when the landlord first served notice. This means that even unsuccessful challenges could delay higher rent payments for months, leaving landlords in limbo.

Geoffrey Vos, Master of the Rolls and head of civil justice in England and Wales, warned the Housing Law Practitioners’ Association that the rules under the Renters’ Rights Act could create “an incentive for tenants to apply to the FTT in respect of every increase in order to delay its implementation”.

Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), told The Times: “With just 34 judges sitting on it, the tribunal is unlikely to cope with such an influx of cases once the act comes into force.

“It is one of many aspects of the act where warm words are not being matched by any evidence of the detailed work needed to ensure it works in practice.”

Court capacity could be overwhelmed

As previously reported on Property118, the NRLA has written to the Justice Select Committee, warning that court capacity could be overwhelmed by the Renters’ Rights Act.

The NRLA pointed out that landlords are having to wait weeks for court hearings to regain possession of their properties.

The NRLA said in the letter: “At Report Stage of the Renters’ Rights Act, the Housing Minister told the Commons that: “Court readiness is essential to the successful operation of the new system”. We agree with the Minister.

“However, the government has yet to define what it means by the courts being “ready”. Without that clarity, it is unclear what the planned digitisation of possession cases is intended to deliver or how success will be measured.”