Tenancies Reform Bill Fails On Technicality

Tenancies Reform Bill Fails On Technicality

Tenancies Reform Bill Fails On Technicality

UK private rental sector (PRS) and social landlords were able to breathe a sigh of relief on Friday 28th November 2014, when the controversial Revenge Eviction Bill, or to use its correct title, the Tenancies Reform Bill, presented by Lib Dem MP Sarah Teather, failed to progress past its first reading in the House of Commons.

Rather than failing on a vote, the bill failed on a technicality after MP’s Philip Davies and Christopher Chope chose to talk it out, known as filibustering, because there were not enough MP’s present in the House of Commons to vote for the Bill. The debate started at approximately 9.30am and parliamentary procedure dictates that only Bills which remain unopposed after 2.30pm may make further progress.

MP’s who supported the Bill tried bringing forward a closure motion, to end the debate and call for an early vote, however for a successful majority, at least 100 MP’s must support it, but the motion was only supported by 60 MP’s and the debate on the Bill subsequently ended.

In order for the Tenancies Reform Bill to become law by the next election it must pass a second reading stage in the House of Commons, but it is not certain whether the Government will commit more parliamentary time to debate the Tenancies Reform Bill to try to force it through.

UK PRS and social tenants do need to be protected from the small minority of rogue landlords, and so do good, reliable, law abiding landlords.

It is far from fair that the majority of upstanding landlords should be expected to alter legal business practices because of criticism drawn by a few rogue operators within the UK’s private rented sector.

The Tenancies (Reform) Bill proposed restrictions on the serving of section 21 notices even where only a “hazard awareness notice” has been issued by a council. Landlords wouldl also be prevented from serving a section 21 notice where an improvement notice has been served on a rental property relating to category 1 or category 2 Hazards under the HHSRS rating system, or where the rental property requires emergency remedial action.

Tenants would also be able to challenge section 21 notices where they had complained to the landlord or council before the notice was issued, but the council was still deciding whether to even inspect the property in question.Landlords would also not be allowed to serve a section 21 notice in the first four months of a tenancy.

The Bill was unsuccessful in Parliament because there wasn’t enough evidence to support the need for more Government legislation, which would have a detrimental impact on the whole of the UK’s property rental market.

The Residential Landlords Association (RLA) produced a summary of the Tenancies Reform Bill, based on the original submission to Parliament, the aims of the Bill were:

1. No Section 21 Notice to be given for 6 months following service of a statutory notice.
A Section 21 notice cannot be given within the 6 month period which starts with the service of a Housing Act 2004 notice. These are –

  • An improvement notice
  • A hazard awareness notice
  • An emergency remedial notice

It applies where the notice relates to any Category 1 or Category 2 hazard. It ceases to apply if the notice is overturned.

2. Invalidity of a Section 21 notice following a complaint.
A Section 21 notice is invalid if before the Section 21 notice was given the tenant made a written complaint to the landlord or a complaint to the local authority (which can be written or verbal) regarding the condition of the property and since the complaint was made the local authority has served a Housing Act notice (as defined above). The intention is that the notice has to be re-served but only once this is permissible at the end of the period of 6 months from when the Housing Act notice is served.

3. Defence to Section 21 proceedings.
It is a defence to Section 21 proceedings for possession that before the Section 21 notice was given the tenant made a complaint to the local authority which is still pending. This defence only ceases where the local authority decides to take no action. If instead a notice is served by the local authority the Section 21 notice is invalidated (under 2 above).

NOTE: This provision also refers to a complaint being made to the landlord but according to the Explanatory Note it is only meant to refer to complaints to the local authority. As drafted the Bill does not make sense in this context when it talks about complaints to landlords.

4. How the Bill operates
Situations –

  1. Housing Act notice received.

No pending Section 21 notice.

No Section 21 notice can now be given for 6 months.
Note: This applies even if there has been no complaint and, even if there has been, it does not matter whether it was made before or after the Housing Act notice is given.
  1. Housing Act notice received.

Section 21 notice already given.

Complaint made before Section 21 notice given.

Section 21 notice is invalidated if the tenant made a complaint before the Section 21 notice was given either to the landlord or the local authority.

  1. Housing Act notice received.

Section 21 notice already given.

Complaint made after Section 21 notice given.

No impact.
  1. Section 21 proceedings taken in Court.

Complaint made before Section 21 notice given.

Defence to proceedings if before the Section 21 notice was given the tenant made a complaint to the local authority which is still pending and unresolved.Note: The defence ceases if the local authority decide to take no action but if a Housing Act notice is served by the local authority the Section 21 notice is invalidated retrospectively.NB: The draft Bill also refers to a complaint to the landlord having the same effect but this is not referred to in the Explanatory Notes.
  1. Section 21 notice given.

Complaint made after giving of notice.

No Housing Act notice given at the time when the Section 21 notice was given.

No impact.
  1. Section 21 notice given.

No complaint about disrepair.

No Housing Act notice given.

No impact.

NB: It will not be possible to give a Section 21 notice during the first four months of the tenancy as the Bill stands.

5. Extension to common parts
Complaints need not just be about the let property itself but can be about the common parts if the premises let are part of a building e.g. a flat or bedsit where the complaint relates to the structure or exterior or the shared facilities. The provisions of the Bill will only apply if the landlord has an interest in the common parts in question and their condition affects the tenant’s enjoyment of the premises let or the common parts which the tenant is entitled to use.

6. Complaints
A complaint to the landlord must be in writing but need not be when made to the local authority. It is not confined to complaints about disrepair for which the landlord is responsible. A complaint to an agent of the landlord is effective as if made direct to the landlord.

7. Exemptions
The following exemptions apply –

(1) Current lettings when the Bill takes effect – see below.
(2) Where the condition of the property is due to failure by the tenant to use the property in a tenant like manner.
(3) The defence under Item 3 above does not apply if the Court considers that the complaint is “totally without merit”.
(4) The property is genuinely on the market for sale (but this does not apply to a sale to an associate/partner of the landlord or family member).
(5) Housing Associations.
(6) Lenders exercising powers of sale.

8. Amendments regarding Section 21 notices
(1) A Section 21(4) notice can run out at any time (it need not be on the last day of a per4iod of the tenancy).
(2) No Section 21 notice can be given during the first four months of a tenancy (not applicable to statutory periodic tenancies).
(3) Possession proceedings must be begun within 6 months of the date of service of a Section 21 notice.
(4) Section 21 notices must be in a prescribed form.

9. Compliance with requirements
Regulations can be made to invalidate a Section 21 notice if: –

(a) Prescribed requirements are not met in relation to property conditions.
(b) There is a breach of health and safety requirements e.g. no gas certificate.
(c) EPCs are not available when required.

10. Rent paid in advance
Rent paid in advance will have to be apportioned so a refund has to be made where:

  • Under Section 21 the tenancy is ended before the end of a period of the tenancy.
  • The tenant has paid rent in advance for the period.
  • The tenant is not in occupation.

11. Application of the Bill
The Bill will only apply to assured short-hold tenancies granted on or after the date the legislation comes into force and not to a statutory periodic tenancy which begins after commencement when the original tenancy started before commencement. After 3 years however from commencement it will apply to all assured short-hold tenancies even if they started before the Bill comes into force. The Bill only applies in England.

SOURCE: Residential Landlords Association – Click Here for full summary

The phrase “revenge eviction” has been bandied about by housing activists for the last 18 months, with homelessness charity Shelter claiming that as many as 213,000 tenants have been served Section 21 notices, which provides the landlord with the automatic right of possession of a rental property, once the fixed term has expired, without having to give any grounds.

The Tenancies (Reform) Bill would have created a loophole allowing bad tenants to remain in privately rented properties for longer, leading to an increase of rent arrears and putting further strain on local authority resources, leading to longer delays for tenant eviction cases through the courts.

Residential Landlords Association (RLA) Chairman Alan Ward

Residential Landlords Association (RLA) Chairman Alan Ward

RLA chairman Alan Ward commented on the Bill’s failure stating “The RLA doesn’t condone revenge evictions and we want to see effective action to drive criminal landlords out of the private rented sector. However, the Bill was badly drafted and missed its target. It would have punished good landlords and allowed bad tenants, savvy with their rights, to play the system. There is now an opportunity for the campaign groups to work with landlord representatives and local authorities to come up with a workable solution to tackle the small minority who practice retaliatory eviction. Enforcement of current regulations is key. The RLA has already discussed ways in which councils can identify those landlords who operate under the radar with ministers, MPs and local government representatives.”

Alex Hilton Director  Generation Rent

Alex Hilton Director Generation Rent

Alex Hilton, Director of tenant campaign group, Generation Rent, blamed lack of MP support for the Bill failing, saying: “Only 60 MPs were prepared to leave the comfort of their homes to protect the safety of 9 million tenants. Bad landlords now remain free to turf out tenants in awful conditions and tenants will continue to put up with mould, damp and faulty wiring for fear of eviction. This is an outrageous, feudal situation that is untenable. If MPs now don’t reincarnate these provisions in the Consumer Rights Bill we will know they are prepared to throw tenants to the wolves.”

The RLA had previously warned UK private rental sector landlords that the Tenancies (Reform) Bill was a recipe for poor tenant-landlords relations that could lead to a race between tenants seeking to lodge complaints about a rented property and landlords seeking to serve section 21 notices as soon as possible, each intending to protect their own interests.

David Cox ARLA

David Cox ARLA

ARLA Managing Director, David Cox, said “While the Association of Residential Letting Agents agrees that the issue of retaliatory eviction needs to be addressed, ARLA  were broadly supportive of the principles behind the Bill,  but with concerns. As they say however, the devil is in the detail and now that the Bill has been published we have concerns that it exposes landlords to frivolous and vexatious cases. For example, there is a risk that category 2 hazards could be created by tenants in arrears to avoid evictions. We are also concerned that in many blocks of flats and converted houses ‘common parts’ are not under the landlords control but are the freeholder’s responsibility. Therefore, it is not equitable for a landlord to be penalised for something that is outside their control. These clauses need further thought before we could welcome this Bill; as it stands, it will inevitably lead to unintended consequences. ARLA wants to see the issue of retaliatory eviction resolved once and for all, but we must ensure that any legislation designed to tackle this minority of rogue operators does not infringe or restrict the rights of professional landlords and agents or frustrate legitimate possession proceedings.”

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