Sometimes I write a blog piece because I have something specific to say.
This time I’m writing to find out what that point is.
I had a brief Twitter chat with various people yesterday about consumer law and renters, principally whether it is philosophically a good thing.
Let me explain.
Up until 2008 you couldn’t use consumer law in private rental arrangements. This is because consumer protection regulations need to have, at their core, a trader and a consumer. Would a landlord be considered a ‘Trader’ when renting out a house and whereas you could consume a meal in a restaurant or consume the services of an electricity company, how could you consume a house?
When the Consumer Protection from Unfair Trading Regulations 2008 were ushered in, that perspective changed and for the first time renters were able to argue against clauses in rental contracts as being unfair terms under the new law.
The first casualty I remember was the standard “No pets” clause, which usually consisted solely of those 2 words, which was felt to limit people’s consumer rights, so you started to see the wording “No pets without prior permission of the landlord. Such permission not to be unreasonably withheld”.
Clearly there is a difference between a hamster in a cage or the pig on the 5th floor of a tower blog, whose fuzzy picture you can see in the title to this piece. The amended No pets clause aimed to reflect that reality and provide renters with more freedoms, although such freedoms haven’t so far extended to the heinous crime of putting up pictures to personalize your living space, lest you lose your deposit.
In 2014 the regulations were further amended to bring in the notion of “Unwinding tenancies”. In most circumstances, an assured shorthold tenant is bound by the fixed term of the contract and to leave early is to pave the way for the landlord to pursue them for the rent for the remaining term but extending the logic of trader and consumer, if a renter can make a case that the letting was mis-sold to them or aggressive sales practices were used, then the tenant can, within the first 30 days, unwind their tenancy, move out and demand all their money back, after 30 days they can still unwind but cant claim back their money. This facility closes at 90 days.
This new way of looking at rental arrangements recently extended into the Tenant Fees Act, where English law finally caught up with Scotland and realized that in contractual terms, tenants don’t have a contractual relationship with a letting agent. The agent works for the landlord, so it was formally recognized that renters shouldn’t be paying fees for a service that isn’t theirs.
So there is no doubt that consumer law and renting are going to be welded together for the foreseeable future and we will probably see further legislative changes and amendments to reflect that but is this a good thing or a bad thing?
Obviously it’s a good thing for Hamster owners everywhere and clearly it keeps down fees for tenants moving anywhere, even though illegal fees are still being charged by vast swathes of the dodgy letting agent industry.
The CPUT regs also put paid, in theory, to spurious fines and penalties being inserted into contracts and if they do show up, they are at least, unenforceable.
But changes in law also reflect changes in social concepts and in turn influence them, which is why law is important.
Making domestic violence a separate, stand alone criminal offence with it’s own definition may sound like a specialist law but its tremendously important, in that it reflects a sea change in public attitudes towards the crime which will gradually spread out through wider consciousness, even among people who might never know about the legal aspect of it.
People talk widely and stridently about their “Human rights”, without necessarily understanding what the law says on it but if the Human Rights Act had never been conceived of or drafted, the idea would not have had the traction that it has. People are aware that human rights is an enshrined legal concept.
The reason why I have misgivings over the trader/consumer relationship revolves around the trend in recent decades, towards the commoditization of housing, where the notion of homes is gradually being eroded in favour of investment opportunities.
The recent English Housing survey revealed that fewer than 1 in 5 private landlords view their role as housing providers, the large majority seeing themselves as investors. A fact that will surprise few people but from the landlord’s side, this indicates a certain mindset, that the property they are renting out is a business transaction rather than a social responsibility and to my mind, whatever benefits a renter may wring from a consumer approach to renting are still seriously overshadowed by the fact that landlords will tend to buy properties as alternatives to a pensions and subject to the whims and movements of financial markets in the same way that stockbrokers buy and sell shares.
I was listening earlier this week to the BBC radio 4 programme Money Box Live where a landlord was complaining that her tenant refused to move out to allow her to move in with her family, because it suited her life plans.
She seemed incensed that she would be expected to go to court and get a possession order, just to get “Her home” back, completely ignoring the legal principle, set down in section 1 of the Law of Property Act 1925, that a tenancy is a form of ownership of land.
Listening to the programme in the car I could clearly sense studio guest, Nearly Legal’s Giles Peaker, struggling to sit on his hands.
Did landlords primarily see themselves as investors before the 2008 CPUT I wonder, or did this change in perspective come about as a result of this new approach?
And so, I have I think discovered my point.
Whilst there are benefits to the renter in the regulations and laws that have been brought in since the trader/consumer idea was introduced, the dangers of buying into the idea of a home being simply a consumer transaction, like buying a car or a holiday outweigh they advantages.
The overall change in perception, the move away from properties being homes first and foremost is far more dangerous. As generations of new renters grow up against a background of this kind of thinking, society loses the balancing, historic perspective.
Homes should never be commodities, they should never be investment opportunities.
Everywhere I look in London, I see cranes and glass buildings going up and anyone with an eye on housing knows what is happening. A spurt in housebuilding that government can refer to as tackling the housing crisis but which in reality are largely no more than money laundering opportunities for foreign gangsters, to build homes that nobody is going to be able to afford to live in.
One idea that occurs to me is perhaps moving things like unfair terms, unwinding tenancies etc, over into human rights legislation.
Instead of having a consumer right to back out of a tenancy when you have been lied to, it should be a human right to do so . mandatory grounds for possession should also be a breach of human rights.
Numerous attempts have been made in recent years to argue ECHR Article 8 defences in mandatory possession proceedings but they have so far failed, on the basis that the legitimate pursuit of domestic law comes first.
I find myself agreeing with comments made by Gen Rent’s Caitlin Wilkinson at a webinar we participated in yesterday, that part of the problem is the PRS is just too big and when something that big is built on homes as investments, it is bound to have an adverse effect on renters, whose lives and stability are subject to market forces.
We need to get back to seeing the role that housing plays in individual and social health. Instability and insecurity being 2 of the main things that renters complain of.
It would be possible to effect social change by keeping the advantages to renters ushered in by the consumerist approach but enshrining them in human rights regulations to slowly turn the focus on what homes are for back in a direction that serves society better than increasing consumer rights.
by Ben Reeve Lewis
