The Renters’ Rights Bill – House of Lords Committee Stage – Summary of Days 2 and 3
It continues to be enlightening to follow the Lords’ discussion of proposed amendments to the Renters’ Rights Bill (the Bill). One gets a real sense of the main political parties’ motivations and priorities in relation to the rental sector and how ‘the other place’ is likely to seek to deal with the amendments so far agreed by the second House.
So far, members have discussed proposed amendments to the Bill on subjects including two-month notice periods, repossessions during school holidays and fixed tenancies for students. Given the detailed reading and lively debate on these (and other) topics, it is unsurprising that an extra two days of Committee Stage deliberation have already been scheduled.
In this summary we consider some key amendments agreed to (or discussed) by the Lords on the 24 and 28 April.
Removal and proposed wholesale amendment of clause 3 – effect of superior leases and subletting
It had been intended that this clause should address a real concern for leaseholders whose leases permit them to sub-let their dwelling only by way of a fixed-term tenancy and therefore not on a periodic assured tenancy (which this legislation will effectively change all short-term tenancies to). Without the Bill specifically and adequately addressing this, leaseholders may be prevented from continuing to sub-let without breaching the terms of their own leases. This is something that we are fielding questions about already from concerned clients. It is not clear from the existing clause how the Government intends to deal with the issue.
The Conservative Baroness Scott of Bybrook wanted to be assured of clarity from the outset, advising that,
“on these Benches, we would prefer those specific tenancy types which underlie the right to sublet—such as fixed-term assured tenancies or assured shorthold tenancies—to remain.” “how the Government will ensure that tenants in sublet arrangements are not left in legal limbo?”
In perhaps the most exciting segment of debate during day two, with lots of Latin and Greek bandied about, Baroness Taylor of Stevenage (the main member in respect of the Bill) spoke on behalf of the Government to indicate that it would be removed and replaced by a new Part 2 when the Bill returns to the Commons that would be inserted into Schedule 6 in order to make,
“transitional arrangements which ensure that pre-existing legal instruments will continue to operate and that parties to such instruments will not be found in breach of their terms following the implementation of our tenancy reforms.
The risk arises because such instruments may make express reference to certain tenancies – such as assured shorthold tenancies – which will become obsolete as a result of the Bill. Mortgages, for example, sometimes require letting only on assured shorthold tenancies, which would be impossible for a landlord to comply with after commencement. In the case of mortgages, insurance contracts and Section 106 planning obligations, landlords will be able to continue to let their properties without being found in breach of their terms where they were able to do so before the reforms. Provision is made so that parties will not be prevented from making changes or modifications to their agreements of their own volition.”
The Lords debated the Bill for several hours on 28 April, until 10.45pm. Although no proposed amendments were agreed to, some important aspects of the proposed legislation were discussed in real detail and it is clear that many meetings are happening behind the scenes.
The Court system
The first tranche of proposed amendments on day two concerned a widely held concern that an already creaking court system would not be able to cope with the demands brought upon it by the new legislation. The first proposed amendment, sought by the Conservatives, would require the Lord Chancellor to assess the operation of the possession process before Royal Assent to ensure that the court service has the capacity to deal with increased demand expected because of the Bill. Many others followed this line, though some allowed the review to occur after the legislation has come into force.
Baroness Scott of Bybrook referred to the fact that the Conservatives,
“fully support the ambition to strengthen security and fairness in the private rented sector. That commitment was made clear in the previous Renters (Reform) Bill. Within that, the previous Conservative Government set out that Section 21 would not be abolished until meaningful court reform had been undertaken and sufficient progress achieved.”
She said that the Bill had removed these safeguards and that we must remember that
“delay is not neutral. It is not a benign inconvenience. It is a deeply disruptive force in people’s lives. For a landlord, it might mean months without rental income, with mortgage arrears mounting. For a tenant, it means living in a state of uncertainty. That silence—those weeks and months of not knowing—is not just stressful but debilitating. It leaves tenants feeling powerless and unable to plan their future and move forward.”
The Cross Bench Peer, Lord Cromwell agreed and referred to the forthcoming general digitisation of the court system when he said:
“the courts simply not being ready to take on the burden that is coming to them. There is no credible timescale to transform the clogged courts and tribunals system. However, my main reason for speaking is to put on record and advise the House that I attended a meeting—with the Minister and other noble Lords, some of whom are present today—with those responsible for the court digitisation, which has been held out as the kind of techno magic that will transform the speed of court processes.
This was illuminating, but it left attendees, a good number of whom have very considerable experience of our legal system, very doubtful about this still-evolving IT system. The view from the people I spoke to was that it would take at least five years to bed in.”
Baroness Grender, a Liberal Democrat then stood in support of tenants and pointed out that only about 0.3% of tenancies end in repossession in the courts.
Baroness Taylor of Stevenage acknowledged the widespread concern about how the court system might stand up to what some fear will be a barrage of possession claims and advised that she expected the Government to have some hard answers to those questions.
Other amendments of note either withdrawn or not stood (discussed)
A proposed amendment which would only judges to only make Orders for possession in respect of accommodation which houses children of school age during the school holidays was withdrawn, as was an amendment questioning the Government’s reasons for preventing a tenant and landlord from agreeing a rent value higher than the rent set by the Tribunal as well as those concerning how rent increases should be dealt with and to curtail a tenant’s right to challenge a rent rise in the First-tier Tribunal, as well as a landlord’s ability to collect rent in advance at the outset of a tenancy. In addition, the Green Party’s proposal to establish a living rent commission to allow local mayors to bring in rent controls that match the conditions in their area, which Baroness Jones of Moulsecoomb advised she was ‘delirious’ to introduce to the House, was also withdrawn after some politely heated debate.
Three further days of Committee stage debate are currently now scheduled, on the 6, 12 and 14 May, with amendments such as those concerning tenants’ rights to keep pets, protections for shared leaseholders and the private renter sector database up for discussion next.
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