Renters' Rights Bill

Written evidence submitted by The Justice for Tenants to The Renters’ Rights Public Bill Committee (RRB60).

Overview

1. Justice For Tenants ("JfT") is a non-profit organisation [1] . We support thousands of PRS tenants each year with advice, carry out hundreds of Rent Repayment Orders ("RROs"), and have contracts in place to support roughly 25% of English local authorities with enforcement via civil financial penalties against criminal landlords and agents.

2. At the time of writing, JfT has provided support to over half of all English local authorities with their PRS enforcement activities in some capacity.

3. The Renters Rights Bill ("RRB") contains proposals relating to many different areas of housing law and enforcement and is a significant piece of proposed legislation. JfT applauds the efforts of the many non-governmental organisations and civil servants on the previous Renters (Reform) Bill and commends the new government for the speedy introduction of the RRB, which will build on much of that work.

4. This submission focuses on matters in respect of which JfT is best placed to provide meaningful insights in light of our particular expertise as described above.

Expanded use of RROs

5. Rent Repayment Orders ("RRO"s) are a vital tool for policing standards in the Private Rented Sector. This innovative ‘sanction-cum-remedy’ has proven effective. For example, research from last year revealed that landlords who commit licensing offences are 66% more likely to have action taken against them by their tenants than by local authorities [2] .

6. JfT welcomes many of the changes outlined in RRB clause 96, which extends the availability of RROs to several additional offences [3] . In particular, the enabling of RROs in the event of the misuse of possession grounds (in specified circumstances) will help to reduce the number of landlords who exploit ‘loopholes’ following the abolition of s.21 ‘no-fault’ evictions [4] .

7. However, we encourage making RROs more widely and readily available than the current proposals. For example, allowing a tenant who has lost their home to bring an RRO against a landlord on the first occasion a no-fault eviction ground is abused. Similarly, we propose enabling RROs for an initial failure by a landlord to sign up to the landlords' database or ombudsman [5] .

8. We suggest that it is tenants, rather than local authorities, who will first be aware when a property is being let or they are facing eviction. Enabling RROs on the first occasion of unlawful activity by a landlord could be achieved straightforwardly by an addition to RRB clause 96.

9. The above amendments would reduce criminality across the PRS and homelessness resulting from the misuse of possession grounds.

Ensuring accessibility of RROs for applicants

10. JfT endorses several proposals in the RRB which will make RROs a simpler tool for applicants to use, and, by extension, a more effective enforcement tool for deterring and punishing criminality in the PRS.

11. For example, extending the limitation period for making RRO applications to two years [6] will ensure that RROs are more widely utilised. The current 12-month time limit has frequently proven to be onerous for applicants.

12. A problem which has emerged under the existing RRO regime is the question of when the limitation period is intended to run from (i.e. when "the offence was committed" per s.41(2)(b) HPA 2016). In particular, we suggest that it is unclear whether the statutory defences relating to continuous offences, e.g. s.72(4) and s.72(5) HA 2004 (which provide a "defence in proceedings" for licensing offences) are intended to operate retrospectively so that ‘no offence was committed’ at an earlier time, despite all the essential elements remaining present [7] .

13. It creates uncertainty if a time limit runs from when certain defences are later established. In particular, the exculpatory defence of ‘reasonable excuse’ provided by s.72(5) and s.95(4) HA 2004, which it appears may have been intended to have a different effect than other prescribed defences [8] . A tenant or local authority may go to considerable lengths to prepare an RRO application to enforce against a landlord’s criminal conduct (having checked the application was in time when it was made), only for it to later be held that the application was late because a landlord produces evidence during proceedings that they had an excuse for small part of the offending period.

14. The above change could be achieved by way of an amendment or explanatory note to s.41(2)(b) HPA 2016, clarifying that the intention was/ is that where a ‘reasonable excuse’ is established ‘in proceedings’, the effect is not that ‘no offence was committed’ at the earlier time (for limitation purposes). A respondent would, of course, still avoid liability for any period of offending in respect of which they were able to successfully establish the defence [9] .

RROs against superior landlords

15. Extending the availability of RROs to include superior landlords is crucial to ensuring the efficacy of the RRO regime and is a very welcome development [10] .

16. However, we suggest that the provisions could be tightened to ensure that superior landlords cannot avoid or minimise liability disingenuously. In light of a recent Upper Tribunal decision [11] , we suggest that it is important to make further provision in respect of two points; first to clarify which tenant’s rent will be used to calculate an RRO [12] , and second to ensure that a superior landlord cannot essentially ‘contract out’ of liability for offences such as licensing breaches.

The relevant rent

17. An available reading of the current provisions is that, in the case of RROs against superior landlords, the relevant ‘rent’ could be argued to be that which is paid by a mesne tenant/ immediate landlord to the superior landlord.

18. This would enable a superior landlord to arrange for a Rent-2-Rent company to be an occupant’s immediate landlord and receive the full rent for the property whilst the Rent-2-Rent paid a lower rent to the immediate landlord. This would reduce the potential maximum RRO award against the superior landlord.

19. Clarifying the relevant rent for the purposes of calculating an RRO award could be straightforwardly achieved by the addition of a further subsection ‘c’ to section 52(3) HPA 2016 (which is inserted by RRB clause 100(7)), for example:

(c) references in this Chapter to a tenant are to be read as references to a person who at the relevant time occupied the relevant housing.

‘Contracting out’ of liability

20. Limiting a superior landlord’s ability to disingenuously purport to defer responsibility for licensing obligations could be achieved by a further subsection ‘c’ (before the existing subsection c) to section 72(4B) HA 2004 (which is inserted by RRB clause 102(3)), for example:

(4B) In proceedings against a person for an offence under subsection (1)(b) it is a defence for them to prove that they-

…

(c) reasonably relied on an agreement making another person responsible for ensuring that;

(i) the building or part of the building concerned would not become an HMO, or

(ii) the HMO was licensed under this part,

and took all reasonably practicable steps to ensure the agreement was complied with, or

21. Without these changes, there is a clear blueprint for superior landlords to benefit from the revenue of an HMO being operated criminally whilst escaping liability by virtue of a single contractual clause with an immediate landlord and no obligation to demonstrate efforts to ensure that such a clause is complied with [13] .

Selective licensing

22. Local authorities with selective licensing schemes tend to have larger teams that are more effective at proactively dealing with criminality within the PRS. Therefore, the benefits of selective licensing can be seen to extend far beyond the significant improvements which can be achieved within the targeted geographical areas to which they apply [14] .

23. However, t he cost of applying for permission from the Secretary of State for a selective licensing scheme that is larger than 20% presents a significant deterrent to many local authorities from applying to introduce a targeted selective licensing scheme . We suggest that the requirement to obtain approval should be removed.

24. Local Housing Authorities should also be able to impose conditions as part of selective licensing schemes. For example, attaching conditions that require landlords to install necessary safety features and amenities.

25. We propose the following amendment to s.90 HA 2004:

"90 Licence conditions

(1)A licence may include such conditions as the local housing authority consider appropriate for regulating all or any of the following-

(a)the management, use and occupation of the house concerned, and

(b)its condition and contents.

( 2)Those conditions may, in particular, include (so far as appropriate in the circumstances)-

(a)conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it;

(b)conditions requiring the taking of reasonable and practicable steps to prevent or reduce anti-social behaviour by persons occupying or visiting the house;

(c)conditions requiring the licence holder or the manager of the house to attend training courses;

(d)conditions requiring facilities and equipment to be made available in the house and to be kept in repair and proper working order;

October 2024.