Rent Reform Bill - To Have A Housing Court Or Not?
The Commons Levelling Up Committee has responded to the Government's White paper on the PRS, outlining a number of concerns that reflect NRLA, PDPLA and Propertymark's own response, most notably the impact on student housing and the increase in unregulated short term lets, but also in respect of a specialist housing court and improved methods of dealing with rent arrears and anti social behaviour, although they are light on detail in respect of the latter at least. There are signs they are listening to PDPLA proposals in this aspect.
Who Said What?
Before we look too closely at the detail it is important to remember that this this is a Committee response, therefore it's not a true reflection of Government intent but it is an important factor in the progress of a Renters Reform Bill, and the committee has influence.
As predicted by industry commentators, the committee finds heavily in favour of repealing the Section 21 'no fault' eviction process, recommending action to help combat what they describe as unfair eviction and insecurity of tenure.
You will see the word "grounds" a few times in this article and elsewhere, so worth a bit of jargon busting
For most landlords evictions, if required, have been done under section 21- meaning, if the paperwork is in order there is no defence. That being the case, many landlords will have never used a section 8 claim, or if they have it is more likely than not that rent arrears are the reason (or Ground) for eviction.
Under the Renters Reform legislation, every eviction will be for a reason, or in the legal Jargon, one or more grounds.
There are a number of such grounds under section 8, some mandatory (the court MUST make an order of possession) an example would be 2 months arrears; some grounds are discretionary (the court MAY make the order, or it could stop some way short)- for example, the rent is persistently late.
It will be for the landlord to establish which grounds are stated, but he she only needs to show that it is valid on the balance of probability (the civil burden) rather than beyond reasonable doubt (the criminal burden of proof).
The key area of concern is how the landlord can cross the threshold of proof in respect of anti-social behaviour, but the grounds must be made out for every case.56
To avoid grounds for eviction being exploited by alleged "bad landlords" and becoming a backdoor to "no fault" evictions, they recommend that the Government:
- increase from six months to one year the period at the start of a tenancy during which the landlord may not use either ground; and
- increase from three months to six months the period following the use of either ground during which the landlord may not market or re-let the property.
The Good News
However it is not all bad, they recognise the case for a review of the impact of recent tax changes in the buy-to-let market to help inform the UK Government of how we can make changes that will encourage investment and make it more financially attractive to smaller landlords.
Retaining fixed-term contracts in the student private rented sector,
The Government should retain fixed-term tenancies in the entire student housing sector but require all landlords letting to students to sign up to one of the existing government-approved codes of conduct. In the longer term, the Government should consider replacing the existing codes with a single national code
Introducing a specialist housing court,
fast-tracking all possession claims in respect of rent arrears and antisocial behaviour
the need for more social house building the report says;
We strongly recommend that the Government introduce a specialist housing court as the surest way of unblocking the housing court process. Whether it does this or not, it is absolutely essential that the Government significantly increase the courts' ability to process possession claims quickly and efficiently and in a way that is fair to both landlords and tenants.
In respect of anti social behaviour they recommend that "the Government should make existing ground 14 mandatory and issue guidance to the courts setting out the precise definition of antisocial behaviour and the circumstances in which they must grant possession. It should also publish equivalent guidance to landlords and tenants on what constitutes antisocial behaviour and the evidential threshold required to prove it in court".
PDPLA's recent policy paper was specifically mentioned in paragraphs 33-34, albeit credited to Alwin's agency, but cited as PDPLA in the references (78, 79, 81, 82) for the keen eyed.
In relation to housing benefits,
the committee notes that LHA has not kept pace and recommends the government should increase LHA rates to realign them with the 30th percentile in each broad rental market area, and commit to conducting a review as soon as possible into whether they should once more be aligned with the 50th percentile.
A landlords ombudsman scheme (with compulsory membership)
The committee recommends that the Government introduce a single ombudsman for the whole of the private rented sector and that mediation be firmly embedded within its remit.
If it intends mediation to be at the heart then it could be a good thing, but it is not clear how it will interact with Local Authority enforcement or housing courts.
Finally, at least for this summary, Introduction of a mandatory, Property Portal, where landlords would be required to upload property information (for example gas safety certificates) the reasons given are;
- to provide councils with a trusted and consistent intelligence source;
- and enable landlords to understand and demonstrate compliance with their legal requirements
The full report can be found here.