Legal expert warns of looming chaos from the Renters (Reform) Bill

Legal expert warns of looming chaos from the Renters (Reform) Bill

10:03 AM, 17th May 2024, About 7 months ago 31

Text Size

The impending passing of the Renters (Reform) Bill spells trouble for tenants and landlords, warns a legal expert.

Ian Narbeth, a commercial property lawyer and BTL and HMO landlord, tells Property118 in a video interview that can be seen below that some Tory MPs have “woken up too late” to the damaging effects the Bill will bring.

Mr Narbeth also explains the big problem that councils are causing by telling tenants threatened with eviction to stay put until the bailiffs arrive.

If a Labour government passes the Renters (Reform) Bill, it may be even worse

The Renters (Reform) Bill has passed its final stage in the House of Commons and is now heading to the Lords.

However, Mr Narbeth warns that damage has already been done. Landlords have been frightened by the prospect of the Bill. He emphasises that the Bill is being brought in because of a few bad landlords in the private rental sector.

He explains: “The small minority of bad landlords who behave badly are the ones causing the problem which is why we are getting this legislation.

“Most landlords don’t want to evict their tenants for no good reason but there are a minority that do. Their tenants justifiably complain and go to people like Shelter and the politicians have been listening to them.”

He says: “The abolition of Section 21 is coming, and landlords need to realise that Labour will not hold off this legislation.

“If the Tories get this Bill passed before the Election, then it’s done, and Labour should leave it alone. If they don’t pass it, then just think about what Labour might do? They will embellish it and may add in provisions that will not be landlord-friendly. It will be a worse Bill than it is already which is my big fear.”

MPs should just get on and make the best out of a bad job

Mr Narbeth says several Conservative MPs have been slow to grasp the potential pitfalls of the Bill.

He said: “A number of Tory MPs have woken up rather too late to realise the problems the Bill will bring and are trying to delay it.

“Saying that ‘until the courts are reformed, we won’t abolish Section 21’ isn’t going to work. The MPs should just get on and make the best of a bad job. It is a bad job, but the Bill has been promised by the Tories, and they should deliver on it.

“I think Michael Gove thought he would get votes from renters but he’s not going to get any extra due to the delay in passing the Bill and now tenants are finding their rents are going up and there is a shortage of housing.

“The Tories have achieved the worst of all worlds: they have a Bill they shouldn’t have been promoting, it’s not winning them any votes and it will harm tenants and landlords.”

Councils are swamped

Property118 has previously highlighted that there is a common practice for councils to tell tenants to remain in their rented home when facing eviction and after receiving a court order to leave – causing stress not just for the tenant but also for the landlord as they deal with the legal costs and complications.

Mr Narbeth comments: “The issue for landlords is having a tenant who’s not paying rent, making the landlord an involuntary creditor. Each day that passes, the debt grows, and the longer it goes on, the harder it is to get the money back, especially if the tenant disappears.”

The Homelessness Code of Guidance says where applicants are threatened with homelessness, councils must take reasonable steps to help prevent it from occurring.

The first step the guidance says: “Housing authorities should not consider it reasonable for an applicant to remain in occupation until eviction by a bailiff.”

Mr Narbeth explains councils are facing a huge strain in trying to re-house people due to shortages.

He said: “Councils are hoping they don’t have to re-house these tenants, and that something will turn up. Councils are swamped already. They are having to pay for people to live in B&Bs and other short-term accommodation.”  By rejecting those who are “voluntarily homeless” (meaning those who actually obey a court order to leave) councils can wash their hands of a problem.

Furthermore, a lot of landlords are now not willing to rent to the council to house tenants because they end up with the worst tenants going into those properties.

Completely unacceptable

The Housing Minister, Jacob Young recently told NRLA members that councils telling tenants to stay put until the bailiffs arrive is ‘completely unacceptable’.

However, Mr Narbeth says this intervention is ineffective.

He said: “The housing minister saying this is completely unacceptable is too little, too late. It’s a shame it’s taken years for the government even to realise that this has been going on, but we’ve had a revolving door of housing ministers so by the time they’ve got their feet under the table they are out doing another job.

“It is a big problem and Parliament needs to impose sanctions on councils, but I don’t see that happening.”

Long process to evict a tenant

Mr Narbeth says the reality for many landlords is that evicting a tenant takes months or even a year or more.

He tells Property118: “It’s one thing trying to get a tenant out after giving them two months’ notice and then dealing with the prolonged court proceedings.

“It’s a long process. It’s two months for the notice, and then if the tenant doesn’t go, you have to apply to get a court date, which could be in six to eight months’ time.

“If the tenant doesn’t leave after the court order, it might be another six to eight weeks before you can get a bailiff.

“You are looking at nine months to a year, and sometimes a lot longer, to get a tenant out.”

Regarding the current massive backlog of cases in the courts, Mr Narbeth emphasises the urgent need for increased funding.

He said: “If I could wave a magic wand, I would sort out the courts! The courts need more judges, and a lot of court buildings are in disrepair and can’t be used which is a huge problem, so we need to have more courts.

Dealing with Anti-social behaviour will be a lot harder

When it comes to evictions and dealing with problem tenants, Mr Narbeth explains that anti-social behaviour is a major issue.

He tells Property118: “Anti-social behaviour is a big problem, and landlords are in the firing line to try and sort it out. One of the main reasons for introducing selective licensing was to deal with anti-social behaviour. By abolishing section 21 evictions, Parliament will take away the most effective tool landlords have for dealing with it.

“If you have to prove anti-social behaviour in court, you need to provide evidence.

“The person giving evidence will be the one on the receiving end of the anti-social behaviour. This could be the neighbour who’s very frightened because the tenant is abusive.

“Can you expect the victim to wait six to nine months and then turn up in court in the hope that the anti-social tenant will be evicted?

“The answer is no as a lot of people will not put themselves through that. If the person on the receiving end of the anti-social behaviour is a tenant, they will likely move out to escape a nasty situation.”

Mr Narbeth explains the Renters (Reform) Bill changes the criteria for proving anti-social behaviour, but it does little to help.  “MPs have just not thought this through at all. They claim they will make it easier to evict for anti-social behaviour but it’s a tiny, tiny change.

“Instead of having to prove conduct likely to cause nuisance or annoyance, it will be conduct capable of causing nuisance or annoyance.

“I can’t imagine people are going to be arguing about the subtle difference. By the time a case gets to court, there will actually be anti-social behaviour.

“I fear this is going to be a problem and the weak and the vulnerable neighbours and other tenants who are affected are going to be the ones that suffer.”

Mr Narbeth says that when s21 goes, there will be no easy way to deal with problem tenants. Approaching a guarantor may help but it’s only a partial solution to the problem. The guarantor may persuade the tenant to moderate their behaviour or to leave.

“However, some guarantors will not want to get involved in the situation.”

EPC targets scrapped

Prime Minister Rishi Sunak scrapped EPC targets last Autumn which would have required landlords to ensure their properties had a minimum EPC rating of C.

The mooted deadline was 2025 for new tenancies and by 2028 for all tenancies.

Landlords would have had to spend thousands of pounds to try to upgrade their properties.

Mr Narbeth says: “Given that upgrading EPC ratings has not been and probably will never be required for owner-occupied properties, a fair solution is that landlords must declare what the EPC rating is. Tenants can then decide whether to pay the asking rent.

“Many properties are difficult, and some all but impossible, to upgrade at reasonable cost. Without vacant possession, it is even harder and more expensive. The suggested figures in EPC certificates vastly under-estimate the true cost and don’t take rental voids into account.

“The clumsy hand of government proposed Draconian fines for landlords and the requirement to spend substantial sums every five years, regardless of the location or value of the property or whether such expenditure would achieve a C rating.

Fortunately, the Civil Service appears to have realised that rendering hundreds of thousands of properties unlettable would not be good for tenants or landlords.

“Whether Labour has the brains to work this out remains to be seen. Furthermore, once section 21 goes, landlords may be stuck with a tenant but unable to upgrade the EPC rating.”

Tenant charities lumps all landlords in the same boat

Mr Narbeth points out a common frustration among landlords that pro-tenant groups tend to paint all landlords with the same brush.

He criticises the current imbalance, noting the lack of support and understanding for responsible landlords.

He says: “There doesn’t seem to be any kind of slacking off and giving landlords a break. It is all stick and very little carrot.

“We do need housing charities to help tenants who are living in substandard accommodation or have abusive landlords, but Shelter and others tend to lump all landlords together.

“The tenant lobby groups don’t seem to realise that what they are asking for often makes things worse overall.

“There are now so many additional risks in being a landlord and obstacles put in a landlord’s way to get their property back that it increases costs, discourages investors and does not increase the supply of houses. Indeed, the opposite which puts upward pressure on rents.”

He laments: “I don’t see the government doing much to change that situation.”


Share This Article


Comments

GlanACC

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

21:08 PM, 18th May 2024, About 7 months ago

Reply to the comment left by Cider Drinker at 18/05/2024 - 19:24
All 6 of my tenants were more than happy to sign a new AST after being on periodic for many years. One of the advantages is that you can't put the rent up for another year (I didn't put the rent up for the new AST)

Mick Roberts

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

5:52 AM, 19th May 2024, About 7 months ago

Reply to the comment left by GlanACC at 18/05/2024 - 10:20
Yes & they bring something in again next year requiring another AST AAAHhhh.

Mick Roberts

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

5:52 AM, 19th May 2024, About 7 months ago

Reply to the comment left by Cider Drinker at 18/05/2024 - 19:24
My current tenants know I want to sell most of em now. They know I don't want the houses & only keeping the houses for them.
Only way I can carry on soon is if Letting Agent does the paperwork. Or I've got to sell now. With Letting Agent, they get several more years.
But yes u right 'Force' is a strong word. But it's either someone more modern than me with more time energy up to latest regs run em cause I can't cope much more.

Encourage them. Same result. Homelessness from a home of 27 years or accept Govt Councils forcing us into something else.
We being forced against our will. Tenants being forced against their will to have inspections etc. when they din't sign up to this 27 years ago.
Tenants being forced against their will to have their home of 27 years ripped apart for EPC C.

Cider Drinker

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

8:42 AM, 19th May 2024, About 7 months ago

Reply to the comment left by Mick Roberts at 19/05/2024 - 05:52
I hope it all works out for you (and the rest of us too).

Changes to taxation, regulation and selective licensing should be mandatory grounds for possession under Section 8. Then the likes of Shelter (who don’t provide shelter to anyone) and the tenants would know exactly who it is that is making them homeless.

GlanACC

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

10:54 AM, 19th May 2024, About 7 months ago

Reply to the comment left by Mick Roberts at 19/05/2024 - 05:52
Mick , you can get round the upgrade to EPC C if the tenant writes a letter to you refusing the work to be done. You then have to register the letter and the refusal is valid for 5 years

david porter

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

11:18 AM, 19th May 2024, About 7 months ago

first move
get vacant possession
sell property
pay off mortgage
pay any tax
buy unilever
yield is 3,5%
sit back and wack it as dividend arrives in bank account,
result no more nonsense from legislation, tenant,
repair contractors, letting agent
Happiness!

Mick Roberts

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

18:29 PM, 19th May 2024, About 7 months ago

Reply to the comment left by Cider Drinker at 19/05/2024 - 08:42
Yes very good point u say:
Changes to taxation, regulation and selective licensing should be mandatory grounds for possession under Section 8
They've retrospectively changed the rules.on us for something we nor tenant signed up to. So why shouldn't we say Hang on a minute, I wun't have started had that was on. I'm out of here. U playing with people's homes here when u change the rules without asking the tenants with zero problems what they want.

Mick Roberts

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

18:30 PM, 19th May 2024, About 7 months ago

Reply to the comment left by GlanACC at 19/05/2024 - 10:54
Aah so it's a given is it, a refusal and then they leave u alone for 5 years.
I've had many tenants sign to say to Council
You are not coming in my house finding stuff I broke 20 years ago which u then make Landlord do and he then no longer charges me this cheap rent.
I think it may work to a local Council to say I'm not having my house ripped apart for EPC C and I'm having tenants refuse it now. Although we were know, it's not law/rules yet. Also, Landlords have the problem if they refuse it on a free £6000 funding for internal wall insulation, we can only do when empty, but then no funding.

We've asked before if tenant can sign to say
I don't want Selective Licensing. And it's a No.

GlanACC

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

18:37 PM, 19th May 2024, About 7 months ago

Mick, happily my council (the one next to yours) doesn't do this selective licensing lark. I can see that if that were the case you may have to upgrade especially if a £6k grant was on offer. If that were to be the case I would have no choice but to S21 (or whatever) and sell the property.

Mick Roberts

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

18:44 PM, 19th May 2024, About 7 months ago

Reply to the comment left by GlanACC at 19/05/2024 - 18:37
Aah ok u close then.
I've got houses in Gedling Borough Council, Ashfield Council, Broxtowe Borough Council, did have Rushcliffe Council, none did/has Selective Licensing in my roads although Gedling are getting close the way they just put a pin on a map. One side of road has Selective Licensing & one doesn't. It's disgusting how they just have to get the numbers up-Or down.

Yes grants are on offer again people, if anyone wants any details, loads of free stuff, most beneficial is internal wall insulation. Criteria (don't quote me on this) household income below £31.000.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Automated Assistant Read More