Problems with the Unwinding Tenancies Legislation

Unworkable housing laws

I wrote recently about how despite many housing laws being good ideas in principle, they are often unworkable when applied to real life situations and the shenanigans of rogue landlords and agents.

This article prompted a Twitter conversation with several other people in my general line of work who were trying to talk to people who had actually exercised their right to unwind a tenancy under reg 27E-F Consumer Protection from Unfair Trading Regulations 2008 SI 2008/1277 as inserted by the Consumer Protection (Amendment) Regulations 2014 SI 2014/870.

In short, if a tenancy was mis-sold to an Assured Shorthold Tenant then the tenant can ‘Unwind the tenancy’ as it is called and demand back all monies paid. There is more devil in the detail but you can read about it elsewhere on this blog.

This only came in from 2014 and a big development in housing law terms, as prior to this you could not back out of an AST once you had taken it up, without being liable for the rent for the remaining term.

And in reality…

With my training hat on it’s also an interesting development, in that as I scribble illegibly on numerous flipcharts in training rooms around the UK I find that most housing people don’t know about it, because it sits under consumer protection, which is the province of Trading Standards officers, who also don’t generally don’t know about it because to them, it’s a housing law issue, for TRO’s and advisers. So it sits, hidden in plain sight, in no man’s land.

My outfit Safer Renting has dealt with around 300 cases in the past three years and I haven’t come across a single case where it’s happened.  The twitter conversation prompted me to consider why that might be.

Evidence needed

Firstly you have to consider whether the property was aggressively sold and I can’t think of a complaint where that has happened. The housing shortage in London means there are more people looking for rentals than selling them, so very little selling of any kind is needed, let alone the aggressive kind, plus the people in the arse end of renting, where Safer Renting operates exclusively, generally source their properties from Gumtree and Spare room.com, just responding to adverts.

This way the dodgy agents and landlords can easily hide behind aliases Mis-selling is the most likely contender and not for the usual examples given, such as the agent says the property comes with its own parking space but doesn’t, in reality, have one. In rogue landlord world, that kind of example makes you giggle. As would the notion of the properties we go into having bidets or wifi.

What I’m thinking and these may not be applicable to mis-selling, is where occupants are tenants but have been given licence agreements, which amounts to around 99% of cases. Also, I wonder if this would apply where the property needs a licence but it doesn’t have one or where it’s a dodgy, unauthorised and illegal rent 2 rent scam. These last two tend to go hand in hand.

In reality

Would a prospective tenant take on a property that needed a licence but didn’t have one if they were to be told about it from the outset?

Well judges and commentators on the infamous provisions of the Gas Safety Regulations invalidating s21 notices where the certificate wasn’t served before the tenant moved in, often say that a tenant must know about the gas safety as a consideration before signing up.

It seems reasonable to presume that a tenant may not sign up if the property was unlicensed, especially if they knew of the impending chaos that always happens when the council finds out.

So I think these factors could well amount to mis-selling but the trouble then is the restrictions on when it can be done.

The law only allows you to unwind within a set time frame and you can only unwind and claim all monies back if you do it in the first 30 days.  But in the examples I give above, these things usually only come to light a way down the line, when it’s too late to unwind.

Other factors

Then there are considerations to be made about what the rogue landlord or agent’s response would be. Harassment? Illegal eviction? I certainly can’t see our lot shrugging their shoulders and handing back the cash willingly.

Plus, there is the housing shortage again. Sourcing new accommodation is expensive and stressful for anyone and many of the clients we deal with have even less choice in the first place because they are often not British citizens, so many normal landlords are nervous of breaching the right to rent, or they are on very low wages or benefits, which the chocolate teapot of not discriminating against tenants on benefits doesn’t address, that’s even if they could afford a normal, self-contained property in London.

Also to be considered is what happens with references if they do source an alternative? I think, at the end of the day, the people forced to live in the highly precarious situations we deal with aren’t outraged at the possibility that they may have been mis-sold. They are just relieved to have found somewhere they can afford. So there is a general ‘devil you know’ tendency out there, which is entirely understandable.

Another example of a law with good intentions that in reality will rarely be called upon by the denizens of rogue landlord world.

Like a drug that might be a highly effective treatment but whose side effects make the illness look attractive in comparison.