The Renters’ Rights Bill holds promise, but beware the tailless rats

“The best laid schemes of mice and men, go often askew”; a warning a century and a half ago by the poet Robert Burns, on how even our most well-intended ideas may fail or falter by virtue of unintended consequences.

It is a parable that perhaps should have been heeded 100 years later in Hanoi, French Indochina (now Vietnam). As rat populations in the city ballooned beyond control amid the construction of a new sewer system, the French colonial rulers devised a solution: a bounty programme. For every severed rat tail – proof of an eliminated rodent – the government would pay a small fee to the exterminator.

Colonial figures soon realised the oversight in their rush to quell the crisis, however. Criminal enterprises had shifted their focus to farming, as the city’s shadowy suburbs became the breeding ground of rats and a new source of income. The result was a city now overrun with more rats than ever – most of them tailless.

This analogy is not without cause. The case for reform in the private rented sector has been mounting for some time, and has been spurred after hundreds of seats went from blue to red over the summer. The new Labour Government has signalled its commitment to renters, armed with a strengthened Renters’ Rights Bill and a haste to act.

But as the Bill passes to Committee Stage, Parliament must recognise the risk of unintended consequences.

The end of Section 21 has always been the centrepiece of this legislation. But even this – as detailed in a recent report we supported from our colleagues at the Renters’ Reform Coalition – runs the risk of a rise in illegal evictions by criminal landlords.

The speed of this Bill is commendable, but caution must persist. Those watching the Second Reading will have noted the Secretary of State’s refusal to commit to publishing an impact assessment. Given the wide-ranging impacts of the Bill, failure to produce one is unwise.

We are, however, greatly encouraged by the announcement of the Bill’s public consultation. Our contribution concerns one key issue: Ground 6A.

Ground 6A is a proposed mandatory ground for eviction that would see renters removed from their homes with no defence to the claim, in instances where a landlord has breached legislation.

The aim of Ground 6A is to provide landlords with a route to vacant possession in order to avoid a range of sanctions that could be imposed by local authority enforcement teams where a breach to housing law has been made and also, theoretically, to offer renters protections from the health and safety hazards or criminal landlord behaviour.

The Ground supposes that, should a local authority decide that a landlord’s leasing of a property is unlawful, that landlord will be subject to further fines or sanctions until the tenants are evicted, which under the new regime they cannot be without Ground 6A’s existence (unless the landlord decides to sell).

However, in reality, it is Ground 6A itself which will force landlords to evict renters or face fines. If evicting renters was the only way to comply with enforcement action and such an eviction was impossible, the landlord would clearly have a ‘reasonable excuse’, which in the Housing Act 2004 provides a complete defence to all of the potential offences they might be charged with.

Once the option to evict tenants because of enforcement action exists, such a reasonable defence completely disappears and eviction becomes the only option, even when tenants have nowhere else to go or when the property is in good condition.

Thus, in effect the worst criminal landlord behaviour is paid for by the renter necessarily losing any tenancy rights whatsoever – a moral and logical contradiction to the intentions of the Bill.

This, therefore, will create an enormous incentive for the worst-offending landlords to evict at no fault of the renter: the very problem that the abolition of Section 21 – one of the core principles of the Bill – is seeking to remediate.

But while this potential policy outcome seems nonsensical and punitive, it is far from the only consequence.

From evidence we’ve gathered, we know it is commonplace for landlords in the shadow private rental sector to routinely warn renters that the council will evict them should they complain. This is spurious and arguably a form of coercion, and without an amendment to this Ground, encourages this kind of exploitation and fatally undermines the whole purpose of the Bill: to protect renters from criminal landlords.

Just when local authorities need their powers of enforcement enhanced, this would likely diminish the effectiveness of their enforcement strategies as the worst conditions are pushed underground.

Prior to the Government’s Amendment 1 to the Bill, Ground 6A would shift the burden and costs of providing appropriate housing away from the non-compliant landlord and onto either the renter or the local authority, with costly temporary accommodation the likely destination. The amendment will order the landlord to pay compensation to the tenant where possession is obtained on Ground 6A.

An improvement certainly, but insufficient in real terms too. For one thing, the possession order is not conditional on the compensation payment being made, so many landlords will simply not pay the compensation in our view.

This would be an offence against natural justice: a landlord is in breach of the law but neither the renter, nor the local authority enforcement teams, are incentivised to pursue action because either, if not both, are faced with the social and financial consequences that should rightly fall to the landlord. Renters are thus faced with the question: do they seek action but face homelessness or continue to live under the criminal conditions of their landlord?  This is not the renters’ justice we expected.

Within the wider framework of the Bill – much of it enormously positive – it may feel finicky to focus all of our attention on the ‘small print’ of Ground 6A. But this, like Hanoi’s rat programme, could create far reaching and unintended consequences, with both renters and local authorities incentivised not to act. The criminal landlord, meanwhile – whose lies are now emboldened by law –  is free to act nefariously and with impunity.

Given the breadth of this Bill, and its public prominence, the new Government must heed the lessons of Hanoi. We do not wish for the Renters’ Rights Bill to leave the Government holding redundant rattails with only hindsight.