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By Neil Cobbold

Managing Director, PayProp UK

OTHER FEATURES

Reforms can create a professional PRS - if it’s properly policed

Leading rental payment platform PayProp has welcomed the added protections for landlords and renters outlined in the UK government’s rental reform policy paper, but cautioned that ensuring adequate enforcement will require a clearer commitment to funding and court capacity.

The measures outlined in A fairer private rented sector are due to be included in the upcoming Renters Reform Bill. The promised legislative changes include:

- The removal of Section 21 ‘no-fault’ evictions;

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- Strengthening some mandatory grounds for eviction under Section 8, including repeated arrears;

- Extending the Decent Homes Standard to cover the private rented sector.

- Giving tenants stronger powers to challenge landlords and claim back rent where homes don’t meet the Decent Homes Standard.

- Strengthening the current bans on not renting to tenants with children or those receiving benefits under consumer protection law, by making it explicit under property law.

- Stopping landlords from refusing a tenant’s request to have a pet in the property without a good reason, but allowing them to require the tenant to get insurance to cover any damage.

- Requiring standard tenancy agreements to be a periodic tenancy with no end date.

- Allowing tenants to terminate their tenancy at any point with two months’ notice.

- Preventing landlords from ending a tenancy and evicting a tenant without going to court with a valid reason, defined in law, such as rent arrears, anti-social behaviour or needing to sell or occupy the property.

- Creating a new Private Renters’ Ombudsman to settle disputes between private renters and landlords at a lower cost than going to court.

- Requiring landlords and agents to give tenants two months’ notice of any rent increase and allowing tenants to challenge the rent increase through the Private Renters’ Ombudsman, who can decide if the rent increase is too high.

- Giving landlords access to a new property portal telling them everything they need to do to comply with lettings laws. Local authorities and tenants will also have access to check if a landlord has complied with the measures on the portal.

- Granting local authorities stronger powers to tackle bad landlords and allowing them to levy higher fines.

Evictions: The Scottish example

The biggest change to eviction proceedings contained within the policy paper is the abolition of ‘no-fault’ evictions through the removal of Section 21 of the Housing Act 1988. While this measure has been promised for years by the UK government, Scotland removed ‘no-fault’ evictions in 2017 and continues to set a legislative agenda that the UK government has tended to follow. Along with the removal of ‘no-fault’ evictions, the Scottish government strengthened other rules that allowed landlords to recover properties in cases of rent arrears, anti-social behaviour or needing to occupy or sell the property.

With the abolition of Section 21 of the Housing Act 1988, we are glad to see the UK government committing to strengthening mandatory grounds for eviction under Section 8. However, while we note the commitment to streamlining the court process, there has been no pledge to add court capacity to deal with the number of evictions that may now need to be brought under Section 8, which will worry landlords. 

We also note that the court may need to enforce rulings from the new Private Renters’ Ombudsman, which will add to an already heavy court workload. 

Ensuring fairness for all

While we support the vast majority of the measures in this policy paper, it is important for all in the PRS that they are introduced in consultation with tenants, landlords and letting agents. 

On the new Private Renters’ Ombudsman, we note that the government says, ‘The Ombudsman will have powers to put things right for tenants, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000,’ but makes no mention of if or when a landlord can report a tenant to the Ombudsman. 

There is also no mention of who will fund this service, whether the landlord will have to pay a subscription or if the cost will be borne by the taxpayer.

While increased enforcement action by local authorities against rogue landlords is promised, there is no mention of any additional funding to support this action, only a commitment to fully fund the net additional cost of all new burdens if any are identified. 

While the vast majority of good landlords and letting agents will welcome the introduction of the Decent Homes Standard and have properties that already exceed it, local authorities must have the funds needed to enforce these standards, identify properties that breach them and fine and potentially ban those who rent out substandard homes.

* Neil Cobbold is managing director of PayPropUK *

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    Apart from rent arrears, ASB, wanting to sell the property or move into it themselves why else have landlords ever evicted tenants? If these are all going to mandatory grounds what has actually changed?
    Since the tenant fees ban there has been no incentive for letting agents to evict tenants just so they can charge massive fees to both landlord and tenant for reletting.
    Losing the 'no fault' concept does far more harm to tenants as the Local Authorities will no longer have a duty to help.

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    I don’t really understand why the PRS should be a Profession? As more than 80% of landlords have 1-4 properties they are just investors in property. If you want to create a profession of ‘landlord’ or property letting then it needs to be treated as a trade in the same way as other trades or businesses are. By creating this hybrid version of an investor / regulation it the worst of both worlds and it will just be a mess. Introduce legislation by all means but create the tax environment on the same footing. All the media, NRLA, landlord today etc keep going on about professional landlords when they aren’t and why should they be when the profits and returns aren’t there? As I run our own portfolio the legislation is just an additional cost that we will charge for- the only ones that suffer will be the tenants

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    Professional landlords ? This really meansthe corporate sector, of whom are lobbying to take over the PRS sector, thinking it's full of yuppies.
    Professional landlords did a good job with Grenfell tower ! Councils have pulled down inumerable tower blocks because of their inability to control the tenants, and the corporate sector is about to make the same mistakes. Which will require a tax payer bailout.

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    Who are Pay Prop ? Never heard of them !

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    I have mugged up on pay prop, they are supplying a service for letting agents to manage tenants payments. Etc. Individual charges not a straightforward commission. One would expect letting agents to buy software or use standing orders etc. Seems to me that open rent make this process superfluous and their charges are transparent.

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    Reading all that will come in apart from the headline announcement, has made me even more sure that this will be the start, of the end, of the PRS.

    It is so slanted towards tenants that it’s virtually mocking us.

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    Yes, a communist government !

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    Never any compensation for landlords from tenants who don't keep their side of the agreement!
    I guess many have verry little in terms of cash, assests etc., but perhaps this could be paid via an AOE.

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    So long as they are in work a CCJ + an attachment to earnings should do the trick, never let a debtor off the hook

     
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    Jo. I will tell you what has changed it’s one thing to occupy my property by my agreement and consent. Its a completely different matter to occupy my property as of your right that’s what has changed.
    So now they want to create a situation where the landlord has to pay them back rent is it not enough already to give them back the Deposit and three Deposits that we never received. So now they would like us all to be professional what have we being doing for the last 40 years, so now all those letting platforms / Agents wants every thing done how they think it will suit them, incidentally where was any of them before Section 21 ?.

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    Quite right again Michael. They don't realise that landlords are individuals like tenants - and that frequently tenants are in a much more powerful position than landlords. I am a woman on her own who has been letting sometimes to groups of young and obstreperous men - and that already has put me in a vulnerable position. I wonder whether these reforms are deliberately designed to end the private rental sector by being so grossly unfair to landlords.

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    In the real world it is very often the Tenants move into very nice properties supplied by the Private Landlord , Then over a period of time gradually wreck it . Not maliciously but by the way they live.
    How are we to deal with them.
    It appears the new proposals will require us to fix the damage at our expense and then give them £25000 compensation for the they damage caused.


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