RENTED HOMES BILL. Steve Clarke Managing Director. To enhance and protect the rights, representations and housing standards of tenants in Wales

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1 RENTED HOMES BILL Steve Clarke Managing Director and housing standards of tenants in Wales 1

2 The Bills are alive? B and housing standards of tenants in Wales 2

3 The five choice barriers to renting Affordability Housing quality (management services and standards) Representation Consumer protection Tenure security 3

4 Growth and public investment Wales 1 in 3 households rent from SH /PRS Private Rented Sector = 184,254 79,160 claiming LHA = 43% Public investment = Subsidy via LHA, Grants & Loans SHG and Land Impacts = huge costs to pubic purse of tenancy failure Responsibility = to safeguard citizens and to ensure confidence in the rented markets Investment models = Innovation, off balance sheet developments! Sources: 2011 census Table KS40EW DWP: HBCTB release June

5 Uk Comparisons Tenancy models: secure, demoted, introductory, assured shorthold, family intervention, rent act + plethora of non statutory agreements England Fixed term flexible tenancy social housing (policy commitment ruled out in Wales) Northern Ireland Single social tenancy since 1983 Scotland Single social tenancy since 2001 Ireland and Scotland have requirement to provide written tenancy agreement 5

6 Laws are like sausages! Its often better to Not see how they are made! We have argued for many years for tenancy reform that seeks to provide better protection for the consumer. Framing legislation utilising principles contained in the European Convention on Human Rights, UK equalities legislation and consumer protection principles is a mature reflective approach and one which many tenants in Wales will benefit from once enshrined in statute. and housing standards of tenants in Wales 6

7 So what are the issues? The current law regarding renting a home is unsatisfactory Its evolved over 150 years while changes have not been retrospectively applied. Differentiates widely on HA, LA and private occupiers Wide range of different legal relationships between landlords and tenants. Tenancies vary greatly according to when they commenced and the status of the landlord concerned Law doesn't work well for victims of domestic violence, joint tenancies Housing law difficult and complex, making advice exclusive and expensive the power is often with the landlord! The courts and voluntary sector organisations workloads are littered with cases where simplifying the tenancy agreement would mean significant cost savings and alleviate stress and anxiety and injustice 7

8 Ingredients of a tenancy If we were to start from scratch..needs to be. Duty to provide a written tenancy agreement in plain language / easily understood and accessible to all easily enforceable for both landlord and tenant balance of rights and obligations of the parties Core rights enshrined in statute Flexible - to evolve without need for further legislation to be fairly and consistently applied You would place it in the context of consumer law Provide protection around unfair terms Property needs to be accurately described Access to redress and reparations if things go wrong You would have the ability to put core heads of the agreement while enabling variations to terms Etc. 8

9 Rented Homes in Wales On 9 April 2013 the Law Commission published the report 'Renting Homes in Wales' (Law Com No 337)'. This report updated the original Renting Homes proposals and is based on the recommendations in "Renting Homes: The Final Report" (Law Com No 297). Aim To simplify housing law, and make it fairer Implementation The new law will be legislated for in 2015 Big bang approach favoured 2016? 9

10 Some of the core elements changing the legal framework for renting a home i.e. Model Contracts secure contract based on the current local authority secure tenancy standard contract based on the current assured shorthold tenancy addressing the anti-social behaviour dealing with domestic abuse a more flexible approach to joint tenancies abandonment of the property by a tenant renting by young people standardising succession rights standardising eviction for rent arrears requiring landlords to ensure there are no Category 1 hazards under the Housing Health & Safety Rating System. Consultation shows clear support for the proposals to simplify housing law by putting in place a fairer, and more effective legal framework for renting a home. 10

11 In summary Greater clarity! 2 Model contracts Secure contract = modeled on local authority secure tenancy for use Local authorities and housing associations Standard contract = modeled on AST private rented sector High level Removes distinction between lease and license = contract Provides certainty in contractual terms / Landlords required to issue contract terms Leveling up of social tenancies to the secure tenancy Addresses unfair terms in contracts 11

12 Succession RSL succession - Succession for tenants are limited with technical differences between providers. Surviving spouse or civil partners of assured tenants of RSLs are entitled to succeed to the assured tenancy. LA succession - Legal differences for LA s, with 1 succession right for surviving spouse or civil partner or a member of the deceased family. In practice things are similar, the death of a joint tenant counts as a succession for the purpose of the statue, so it is rare that a member of a secure tenants family succeeds to the tenancy even in secure tenancies. Extend provisions of succession rights represent a potential enhancement of the rights of current tenants. Eg. Extending right of succession for long term carers (where only and principle home, with qualifying period 12months) and housing standards of tenants in Wales 12

13 Joint tenancy Ability of the joint tenant to Exit a joint contract without terminating the whole contract with the remaining tenant responsible for rent Domestic violence - Prohibitive conduct term for domestic abuse, the perpetrator can be removed from the joint tenancy without ending the tenancy and potentially initiating homelessness for the victim Concerns Proportionality! and proof of fault! Civil levels of evidence should be required to terminate a party to the joint tenancy 13

14 Ground 8. Removal of Ground 8 For the average weekly tenancy, 8 weeks rent arrears at the time of the service of the Notice of Seeking Possession and 8 weeks rent arrears at the date of the hearing of the claim and outright possession must be granted. This does not mean a continuous period of arrears of 8 weeks or more. One can have entirely paid off arrears and then accrued a further 8 weeks, it doesn t matter. The court cannot consider other circumstances such as HB delays (discretion). If the conditions are met, outright possession is mandatory and eviction usually follows promptly. Defence Set asides are rare, a disrepair counterclaim is sometimes used with success where the amount of the arrears are disputed. For these reasons it is often difficult to get legal support to defend a case! And is therefore unjust! Welsh Tenants want leveling up with LA secure tenancy 14

15 Anti-social behavour Prohibitive conduct clause Tenants will be bound by a prohibitive conduct clause regarding anti social behaviour Breach of the contract term could trigger eviction proceedings Judges discretion would remain Tenancy could be demoted from secure to standard Exclusion orders, powers of arrest etc would remain Proportionality test? Court discretion would be tightly structured when dealing with breaches of the term. The court would always need to be able to consider the proportionality of any eviction action in the context of equality and human rights legislation. 15

16 Disrepair Landlords obligations to repair Provisions within the Landlord and Tenant Act 1985 repair obligations would be retained Additionally there will be an obligation not to rent a property with category 1 hazards Issues Already a factor in HHSRS introduced in 2004, but reinforced in contractual terms. Would also wish to see duty to attach any prohibition notice history to the tenancy 16

17 Abolishing 6 month moratorium on evictions PRS Tenants are currently protected by the courts during the first 6 months of their tenancy. Landlords can terminate after 6 months by issuing Section 21's at the beginning of the tenancy. We can then unleash this weapon of mass destruction at any time after 6 months if the tenant is naughty. This guarantees 6mths rental commitment from the tenant and the LA if placed by them. Removing 6 months protection removes a fundamental protection of no fault for a tenant. We believe that this will create a revolving door for people presenting themselves as homeless and provides a get out of jail card for landlords who may discriminate against individuals. 17

18 Understanding tenancy agreements Tenancy agreements are often complicated, written by lawyers this often requires lawyers to interpret provides a rich vein of income normally at the cost to the tenant Currently, tenants often require the intervention of legally trained experts to interpret rights and obligations to resolve disputes Pre tenancy help tenants make sense of their tenancy agreement before its signed During tenancy make it easy to check rights and responsibilities and get advice if needed (less exclusive) 18

19 Unfair terms and conditions Tenancy agreements are often littered with unfair terms upon which the tenant seems obligated to accept, they are not often explained to them. Pre tenancy ensure no unfair clauses can be added to the agreement Any amendments would improve on terms - not diminish Many landlords themselves are not clear about what they are required by law to provide! Make it clear what the landlord has to service and what tenants need to do if they do not 19

20 Core rights Who your landlord is! Should not determine what core rights you have! Core rights should be enshrined in statute regardless of the sector create a level playing field for occupiers renting similar types of housing the same basic tenancy agreement will apply if you move between similar types of housing There is a lack of confidence in the current system where landlords get to write their tenancy agreement without challenge Provides greater comfort in the agreement for renting a home having the core rights and obligations clearly set out in statute with additional contractual rights able to be agreed separately 20

21 The Renting Homes Bill will: give tenants confidence to rent a property; establish no-cost statutory-backed model contracts that tenants can easily understand; enable all landlords and voluntary sector support orgs to provide a more professional service; help avoid costly disputes ; make the process for ending a tenancy clearer; and help landlords benefit from more knowledgeable tenants, especially at the end of tenancies. Help tenants call to account landlords who use legal jargon to wriggle out of obligations 21

22 Summary Rented Homes (Wales) Fairer Cleary understood for both landlord an tenant Consumer protection underpins legal framework Eliminate social stigma in rental contracts More simplistic Streamlined legal framework / Model contracts available to all = Reduction in disputes More efficient Reduce legal costs, encourages collaboration between social and PRS sectors 22

23 Links to Housing (Wales) bill For PRS & letting agents Mandatory registration scheme, adopting a Code of practice for the sector Competent person test, encouraging professional standards of training Improves intelligence of the sector, stamp out! bad landlords Provides for better consumer protection 23

24 Public policy terms It does not fundamentally change the current balance of statutory rights and obligations but makes them much clearer and easier to apply; Will increase the overall efficiency of the rented housing sector; Supports the professionalism of the buy-to-let market; and Avoids problems experienced by accidental landlords. The approach was seen as offering Government much greater scope for the development of new housing policy initiatives. For example, providing opportunities for social landlords to enter new sectors of the housing market. The proposed model contracts could also be used in combination with new equity-sharing schemes. By emphasising the mutual recognition of each party s rights and responsibilities, the recommendations provide a foundation for improving relationships between occupiers and landlords. To enhance and protect the right s, representations and housing standards of all t 24

25 Issues yet to be resolved Illegal eviction? A new challenge of unfair use clause which could e challenged in court This would require landlords to state the reason for terminating the tenancy in a section 21 notice or its equivalent replacement Requirement to provide details of any outstanding prohibition notices to prospective tenants Supported housing! Definitions such as overcrowding 25

26 Tenantiaid Cymru / Welsh Tenants Milbourne Chambers Glebeland Street Merthyr Tydfil CF47 8AT Social media Facebook: Twitter: t: e: steve@welshtenants.org.uk w: m: