Renters could get additional protections in what has been billed as the “biggest overhaul of residential tenancy legislation in more than a decade”, if a proposition lodged by the Housing Minister is passed.
Deputy Sam Mézec has proposed major updates to the Residential Tenancy (Jersey) Law 2011 to “balance the rights and responsibilities of tenants and landlords and introduce more clarity”.
The amendments will be debated in the States Assembly this summer.
If approved, the changes would guard against unsustainable rent increases, allow tenants can challenge rent increases if the proposed rent increase is unlawful, limit the use of fixed-term tenancies, and strengthen notice provisions in periodic tenancies.
The plans have been years in the making, Deputy Mézec said, with a project “looking at the whole of the housing market” starting during his first term as Housing Minister.
“Jersey has a housing crisis”
He explained: “Jersey has a housing crisis, and it affects people in lots of different ways, but in the rental sector, people we constantly hear from are have to suffer things that other countries wouldn’t allow.
“People can lose their homes for no reason or in revenge for trying to do the right thing for themselves. Lots of other countries don’t allow that, and the UK is about to ban it up there.
“Lots of countries have limits on what can be done with rent increases so that they are fair and proportionate. And Jersey hasn’t had that system for many years.
“We did have it in the past, and when we got rid of it, that coincided with the time where rents started going up really high.
“It doesn’t take a genius to work out what might have happened there.”
The proposed new law takes inspiration from provisions that are being put in place in England, as well as provisions that have worked in Europe and some US states, Deputy Mézec said.
Fixed-term vs periodic tenancies
Jersey currently has two types of tenancies: fixed-term tenancies, when tenants sign up for a set amount of time before their contract is renewed, and a periodic tenancy, which doesn’t have a specified end date.
The new law would limit landlords to one period of fixed-term tenancies for each tenant at a given property, after which they would have to move to a periodic tenancy.
Deputy Mézec said: “We’re proposing that fixed-term tenancies can still be used in Jersey, but only as a one-off.
“If they’re to carry on beyond that, they have to be renewed into periodic tenancies, or you can start with a periodic tenancy at the start.
“And the reason I’m proposing that is because I think that that will strike the right balance to protect tenants from being thrown out of their homes for no reason or not a good enough reason, provide tenants with flexibility when they need to move from their homes, potentially because they’ve faced an unfortunate change of circumstance in their life, or because they want to move on and find somewhere better to go to.”
Evicting tenants
Under the proposed new law, landlords will have to give one of an approved list of reasons if they want to serve notice on a tenant. These include:
- If the landlord wants to move into their property
- If the landlord needs a carer and wants the carer to live at the property
- If they are planning on selling the property
Landlords will need to provide three months’ notice if the tenant has been living in the property for less than five years, and six months’ notice if the tenant has lived there for more than five years.
That period can be shorter in “unexpected circumstances” or if the tenants are bad – for example if they are in breach of contract, or for “nuisance behaviour”.
But landlords won’t be able to evict tenants simply for being difficult – for example if they complain about conditions, or ask to see the deposit protection certificate.
If tenants want to leave
Tenants will only have to give one month’s notice before leaving and don’t need to give a reason.
This contrasts with the current situation, in which tenants are tied into contracts even when their circumstances change.
Deputy Mézec said: “I know of people who have been stuck in a rental contract, a couple who then break up, and then the person who’s left in the home finds they’ve got months and months left of a tenancy, paying double the rent personally that they were before.
“I know of people who want and need to go into social housing, but when social housing becomes available, they have to move into it very quickly.”
The new law law would also protect tenants against surprise fees when they break a contract early – as all fees will need to be agreed when they sign a contract.
Asked whether landlords could still require high fees, Deputy Mézec said: “It will be, but good luck finding a tenant if you have a contract that says your assignment fee is going to be an extortionate amount.”
Even during a housing crisis, tenants would be in a better bargaining position, he said.
How will rent controls work?
The proposed new law also provides for limits on how much rent can be increased by.
Under the current law, rents can only be increased once a year and only be increased at RPI, Jersey’s measure of inflation.
But the new law would cap this increase at 5% – so if inflation is higher than 5%, rents can only be increased by 5%.
Landlords will also have to give at least two months’ notice before a rent increase, under the new legislation.
If the landlord has improved the property “or the level of rent charged has fallen significantly behind the market value”, rent can be increased by more than 5% without going to the Rent Tribunal.
A new Rent Tribunal
The new law provides for a Rent Tribunal, which would have a relatively limited remit.
It would be able to review rent increases if tenants complain these have been implemented unlawfully.
The Rent Tribunal would be part of the island’s Tribunal Service.
If approved, it would be chaired by a lawyer and its members would have “a balance of legal qualifications and housing expertise”.
… and more
Landlords will also be required to have buildings insurance under the proposed new law.
They would have to submit information to the government about how much they are charging for rent.
There is also a provision for some restrictions to be waived if there is “mutual agreement”.
Exempt organisations
Social housing providers are exempt from the law’s rent stabilisation measures as they already have written agreements with the Housing Minister.
Why are the changes needed?
In his report, Deputy Mézec cited the housing crisis and the risk of discouraging young people from staying in Jersey.
The current law, which is 14 years old, “does not go far enough” and needs “substantial improvement”, he said, citing the risk of tenants getting evicted for no particular reason.
“Improving conditions for renters and giving them confidence that they can enjoy more security and affordability in their homes has benefits for everyone, including good landlords who have nothing to fear from the changes,” the Housing Minister added.
Who was consulted?
The report included a list of groups that were consulted while drafting the law:
- Environment, Housing and Infrastructure Scrutiny Panel
- Jersey Landlords’ Association
- Chamber of Commerce
- Jersey Hospitality Association
- Jersey Farmers Union
- Jersey Homes Trust
- Les Vaux Housing Trust
- FB Cottages / Clos de Paradis Trust
- Comité des Connétables
- Office of the Children’s Commissioner
- Citizens Advice Jersey
- Homelessness Cluster
- Jersey Bankers Association
- Tribunal Service
- Judiciary
What happens next?
Deputy Mézec said he expected “lots of” pushback when trying to get the new law approved in the States Assembly.
“Let’s be frank, I’m challenging vested interests by doing this, and they won’t go quietly,” he said.
“This will be contentious because I’m proposing a law which will better establish best practice in this part of the market.
“Those who quite like bad practice won’t go quietly and will want to encourage States Members to vote against it.
“That’s why it’s so important that tenants who think this is will benefit them, speak out.
“It’ll be hard for them to do it, but if they if they do as good a job as the other side in advocating for their rights, hopefully they can help persuade States Members.”
When, or if, the law comes into force, there is a provision to minimise negative consequences as the sector transitions.
This means that any pre-existing fixed-term leases will continue, either until the end of the lease or until there is a change to the lease.