Renters' Rights Bill

Written evidence submitted by Tony Wilson to The Renters’ Rights Public Bill Committee (RRB24).

Written evidence submitted by Tony Wilson, a person working for a company that provides training and support service to the private rented sector. This submission was drafted by, with over 35 years’ experience of the PRS.

Executive summary

There are several areas of the bill that need consideration or correction. They are summarized below.

1). Rent repayment orders: liability of landlords and superior landlords

2). Section 12(6) re duty of landlord and contractor to give statement of terms etc.

3). Amendments to Section 13 rent increase and Section 14 of the Housing Act 1988. Tenant right to appeal any rent increase to the tribunal at no cost – and potential effect on tribunal resources

Details

1). We need further or better clarification at what level does a superior landlord pay a rent repayment order if found against them? Do they pay the rent on the superior lease or the rent on the inferior lease. Whichever level it is set at can, the repayment order be split between the sub-landlord and the head landlord? Presumably the total can only be the total rent and not the total rent from both landlords if both landlords are liable. If so, is it apportioned or could both superior and sub-landlord both pay the full rent repayment order (up to the maximum 24 months)?

2) This section requires the contractor (potentially the letting agent) to ‘also’ give a copy of the written statement of terms to the tenant. The use of the word ‘also’ appears to mean that both the landlord and the contractor must each give a copy of the written statement, not one or the other.

However, in Section 15 – 16I (2) ‘Where a landlord fulfils the requirement in section 16D, a local housing authority may not impose a financial penalty on a person who contravenes section 16D only by virtue of subsection (6) of that section.’

This statement seems to confirm that the landlord and the agent have to give a statement.

However, this statement is not reversed if the agent gives a statement and the landlord does not, leaving the landlord liable to a penalty, and this is probably the most comment situation. It should be clarified they need a statement and it does not matter who gives it.

3). Section 8 (10) challenging amount or increase of rent – inserting 14ZA after section 14 of the 1988 Act.

‘(3) The rent payable under the tenancy following the determination takes effect from the date that the appropriate tribunal directs.

(4) The new rent amount is

(a) the open-market rent, if lower than the tenancy rent, and

(b) otherwise, the tenancy rent.

(5) The date must not be earlier than the date of the application.’

The potential effect, without further amendments, are all annual rent increases will be challenged by all tenants every year as they can never get a higher rent and the new rent can only take place from the determination date, delaying the increase. There is a very good financial incentive for tenants to do this.

When determined, any increase is not back dated to the notice date or even application date, but from the determination date. Even if the proposed increase is lower than a ‘market rent’ this does not prevent a tribunal request from the tenant in order to delay the increase. The tenant has nothing to lose in applying to the tribunal as the determined amount will not be higher than they are currently paying and the tribunal is free to use. Therefore, even a very low/reasonable request stands a very high probability of an appeal from tenants simply wanting to delay the increase with the end result that any and all increases are substantially delayed.

The current average timescale from application to tribunal assessment is four to six months and current year to date Government statistics reveal tribunal receipts significantly out stripping receipts ‘In April to June 2024 His Majesty’s Courts & Tribunals Service (HMCTS) recorded a 13% increase in the total for receipts, and a 15% increase in the total for disposals, compared to the same quarter in 2023. Receipts have exceeded disposals over the last year, resulting in a 4% increase in open caseload to 668,000 over the same period’ https://www.gov.uk/government/statistics/tribunals-statistics-quarterly-april-to-june-2024/tribunal-statistics-quarterly-april-to-june-2024#statisticians-comment

The figure of 668,000 is across all tribunals yet the volume of properties in the PRS in England is ‘4.6 million’ as reported in ‘Reforming the Private Rented Sector This is a House of Commons Committee report, with recommendations to government. Fifth Report of Session 2022–23’

I do not see why the vast majority of these 4.6 million tenants in the PRS would not wish to appeal their annual rent increase. Such a route will be highly publicised by various housing charities and I have accounted for the social landlord assured tenants that are not included in these 4.6 million figures. The obvious risk here is the tribunal system is highly likely to grind to a halt unless significant resources are committed to the service. Currently a tiny percentage of cases use a section 13 notice and even fewer appeal it so the volume increase has the potential to be massive.

October 2024.