Housing law: time for a large Scotch?
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Marc Bloomfield
Nic Madge urges English housing law practitioners to discuss the reform of housing law and to press the government to implement the changes promised in the 2019 Conservative party manifesto. He describes the Scottish private residential tenancy, a model which could be adopted south of the border.
Last summer, the UK government announced its intention to abolish ‘no fault’ evictions in England. On 21 July 2019, it issued a consultation paper, A new deal for renting: resetting the balance of rights and responsibilities between landlords and tenants. The consultation, which ended on 12 October 2019, sought views on repealing Housing Act (HA) 1988 s21, denying landlords the ability to grant future assured shorthold tenancies and improving s8 eviction grounds. In envisaging ‘a generational change’ (page 7), the government’s professed aim was to ensure that tenants were ‘always given an appropriate reason why a tenancy is brought to an end, with landlords able to regain possession more efficiently’ (page 5). The consultation paper stated:
It should not matter whether [tenants] rent in the private or social sector … This new deal – a fair and balanced relationship between landlord and tenant – should extend as widely as possible, covering a range of landlords …
For tenants, this means being able to rent with certainty. Certainty that [they] will not be asked to leave without being given a fair reason …
For landlords, this means being able to rent properties safe in the knowledge that [their] investment is protected, and … knowing [they] can swiftly take action when things go wrong … (page 7).
In its manifesto for the December 2019 election, the Conservative party repeated its pledge to abolish ‘no fault’ evictions and to scrap s21. The Queen’s speech on 19 December 2019 simply stated: ‘New measures will be brought forward to protect tenants.’ Although there have been a series of pandemic-induced emergency measures (outlined by Simon Mullings in ‘Flattening the curve’ at October 2020 Legal Action 14 and Liz Davies in ‘Tackling homelessness in the pandemic and beyond’ at October 2020 Legal Action 10) and although the devolved governments in Wales and Scotland reformed their housing law some time ago, to date, no government bill to implement its proposals in England has been published.
The history
The last comprehensive proposal for housing law reform was published by the Law Commission almost 15 years ago. Renting homes: the final report (Law Com No 297/Cm 6781, 7 May 2006)1I was seconded to the Law Commission to write the scoping study which preceded that project. recommended a new regime built on a consumer approach to the law with identical model contracts for council and housing association tenants with security of tenure and alternative model contracts without security of tenure for private sector tenants. The aim was ‘to make private renting easier, cheaper and more flexible’.
The Law Commission project initially had the support of the then local government minister, Nick Raynsford MP (previously director of the Shelter Housing Aid Centre), but when he moved on, government enthusiasm waned. However, the Renting homes proposals have, in the main, been adopted in Wales by the Renting Homes (Wales) Act 2016. It introduced two new ‘occupation contracts’: secure contracts, modelled on previous secure tenancies governed by the HA 1985; and standard contracts, modelled on previous assured shorthold tenancies governed by the HA 1988.
The aims
In 2017/18, the private rented sector accounted for 4.5m or 19 per cent of households (English Housing Survey, headline report, 2017–18, Ministry of Housing, Communities and Local Government, January 2019, para 1.7, page 6). The social rented sector provided accommodation for 4m or 17 per cent of households (para 1.8, page 6).
There is now a large measure of political agreement that the default position in both the public and private sector should be security of tenure. Few things in life are more fundamental than a secure home. The other side of that coin is that where landlords have a good reason for requiring possession, they should be able to obtain it without undue expense or delay. Good landlords generally want to keep long-term tenants who pay the rent. Few now disagree with the government proposal that there should be one principal form of tenancy giving security of tenure in both the private and public (or social) sectors. As the role of local government in providing housing accommodation has declined, the distinction between private and public sector occupancy has lessened. There must though be proper provision for homeless people who face eviction. Reform of the homelessness provisions of the HA 1996 ought to go hand in hand with reform of the law relating to security of tenure.
The other issue that needs to be considered is rent control. Historically, security of tenure and rent control always went together. Indeed, in the first Rent Act, security of tenure was only introduced because otherwise rent control would be ineffective. Without it, landlords would have simply been able to evict tenants who refused to pay rents demanded in excess of the controlled rent. The rent control provisions of the Rent Acts became controversial and, in the 1970s and 1980s, were the main reason both for landlords seeking to evade those provisions by using so-called ‘non-exclusive occupation’ licence agreements and sham holiday lets, and for the introduction of assured shorthold tenancies.
Rent control has become far less of an issue with a more general recognition of landlords’ entitlement to market rents and a government acceptance that housing benefit should be used to subsidise landlords whose tenants cannot afford to pay market rents. Given the current prevailing political views, that may well be right, but it ignores the hardship caused by the social rented sector size criteria (the ‘bedroom tax’) and caps on private sector rents which are eligible for housing benefit.
A further issue that must be addressed is the ludicrous complexity of housing law. It must be simplified. Twentieth and twenty-first century legislation, from the Increase of Rent and Mortgage Interest (War Restrictions) Act 1915 to the Coronavirus Act 2020, has grafted a complex statutory framework on to the existing body of case law dating back to feudal times. Many of the Acts of Parliament are long, complicated and, particularly in recent years, poorly drafted. The increasing use of often complex and frequently amended statutory instruments to supplement provisions of the Acts obfuscates even further. There are at least a dozen different kinds of residential tenancies. The five volumes of the Encyclopedia of housing law and practice take up 22 inches on the bookshelf and weigh almost 30lbs. LAG’s Housing law casebook has grown to over 1,400 pages. The difficulty that tenants and landlords face in obtaining competent legal advice exacerbates the problem. Government must take the opportunity to provide a new housing code that is easy for all to understand.
The Scottish solution
On the face of it, wholesale reform of housing law is a daunting prospect. However, there is no need to reinvent the wheel. Much of the heavy lifting has already been done by the devolved government in Scotland, where the Private Housing (Tenancies) (Scotland) Act 2016 came into force on 1 December 2017. Its aim was to provide security, stability and predictability for tenants, and appropriate safeguards for landlords, lenders and investors. It created a new form of tenancy, the Scottish private residential tenancy, which replaced assured and short assured tenancies for all new tenancies (pre-existing short assured and assured tenancies continue).
There is security of tenure provided that tenants occupy as their only or main home and that the tenancy is not excluded under Sch 1. Those exceptions to security of tenure are very similar to those in the (English) HA 1988 Sch 1. Scottish private residential tenancies are open-ended, meaning that landlords can no longer force tenants to leave simply because a fixed term has expired. The law provides more predictable rents and protection for tenants against excessive rent increases, and includes the ability to introduce local rent caps for rent pressure areas.
If tenants have lived in premises for more than six months, landlords have to give 84 days’ notice to leave unless they rely on a tenant’s misconduct ground, in which case the minimum period of notice is 28 days. Claims for eviction orders are brought in the First-tier Tribunal. There are 18 grounds for eviction, which have been described by the Scottish government as ‘comprehensive and robust’. Eight of the grounds, where premises are required for another purpose, are mandatory (although as a temporary measure they have been made discretionary by the Coronavirus (Scotland) Act 2020). They include: the landlord’s intention to sell property within three months of obtaining vacant possession; the intention of the landlord’s mortgage lender to sell; the landlord’s intention to carry out significantly disruptive works that would make it impracticable for the tenant to continue to occupy the property; the intention of the landlord to live in the property; and the landlord’s intention to use the property for a non-residential purpose. Ceasing to occupy premises as the tenant’s only or principal home is also a mandatory ground.
A further eight grounds, which mainly relate to tenants’ misconduct, are discretionary. They include: breach of a term of the tenancy agreement; anti-social behaviour; association in the property with someone who has a relevant criminal conviction or is anti-social; and statutory overcrowding. Rent arrears over three consecutive months are a discretionary ground, but if one month's arrears are still owed on the first day of the tribunal hearing, the ground becomes mandatory. The tribunal must though be satisfied that the arrears were not due to a delay or failure in the payment of a relevant benefit.
If tenants are misled into moving out, they can apply to the tribunal for a ‘wrongful termination order’. The tribunal may award up to six months’ rent in compensation.
Landlords are required to register on the Scottish Landlord Register, prepared and maintained by local councils in accordance with the Antisocial Behaviour etc (Scotland) Act 2004. Renting out property without being registered is a criminal offence that may result in service of a rent penalty notice (which prevents the landlord from charging rent) or a fine of up to £50,000. Landlords must give tenants all the terms of their tenancies in writing. The Scottish government has prepared model private residential tenancy agreements, which can be used to do that. Landlords are also required by law to give tenants sets of notes to accompany their tenancy terms. There are six statutory forms of notice that must be used for particular purposes (eg, notice to leave and rent increase notice).
Most Scottish tenants of councils, housing associations and housing cooperatives still have Scottish secure tenancies governed by the Housing (Scotland) Act 2001. There is though no good reason why the Scottish private residential tenancy should not be used as a model for the vast majority of residential tenancies south of the border.
Conclusion
Root and branch reform of housing law in England is long overdue. The economic hardship caused by the pandemic makes this even more urgent. It is time for housing practitioners to discuss the kind of security of tenure that should be provided and to press the government to introduce the legislation promised in its manifesto.
 
1     I was seconded to the Law Commission to write the scoping study which preceded that project. »

About the author(s)

Description: Nic Madge - author
Nic Madge is a writer, photographer and former circuit judge. Follow his Pandemic Portraits project on Instagram @nicmadge.