New Clause 53 - Restriction on contractual exclusion or limit of rights of tenant under this Act

Renters (Reform) Bill – in a Public Bill Committee at 3:15 pm on 28 November 2023.

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“(1) A covenant or agreement, whether contained in a lease to which this Act applies or in an agreement collateral to such a lease, is void in so far as it purports to exclude or limit the rights of the tenant as provided for by this Act unless such contract terms were previously authorised by a court.

(2) The court may, by order made with the consent of the parties, authorise the inclusion in a lease, or in an agreement collateral to a lease, of provisions excluding or modifying the rights of the tenant under this Act if it appears to the court that it is reasonable to do so, having regard to all the circumstances of the case, including the other terms and conditions of the lease.”—

This new clause would ensure that tenants are protected from being forced by their landlord to agree in writing a shorter notice period than two months by requiring the court to authorise such agreements.

Brought up, and read the First time.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

I beg to move, That the clause be read a Second time.

I was going to apologise to the Committee for the slightly obscure nature of my new clause, but after all that, I think it is the Minister who should be apologising for tabling so many Government new clauses to the Government’s own Bill. Perhaps he will do so when he stands up.

New clause 53 is very consciously a probing amendment, in so far as it seeks to ascertain whether there are any safeguards against what we believe might constitute a potential loophole in Bill that could be exploited by unscrupulous landlords.

Clause 14 sets out rules about the period of notice that a tenant can be required to provide when they wish to end an assured tenancy. Specifically, it provides that a tenant’s notice to quit relating to an assured tenancy must be given not less than two months before the date on which the notice is to take effect. That two-month period is intended, rightly, to provide landlords with sufficient time to re-let the property as required. However, the two-month default period of notice can be set aside where both parties agree as much in writing, whether in the tenancy agreement or in a separate document.

There may be entirely legitimate reasons for individual landlords and tenants to agree a shorter notice period. However, we are concerned that some tenants might find themselves informally pressured to agree a shorter notice period in writing as a precondition of being granted a tenancy. For many landlords, there will be absolutely no incentive to agree a shorter notice period than the two-month default; after all, they are likely to need much of that time, if not all, to re-let their property. However, it is entirely conceivable that unscrupulous landlords, particularly in hot rental markets, would have every incentive to get a sitting tenant out as quickly as possible after the point at which that tenant had given a notice to quit, because they will have no trouble in rapidly re-letting their property, probably at a far higher rent level.

We are therefore worried that the freedom for landlords and tenants to agree notice periods shorter than two months in writing could be used to the detriment of tenants—particularly vulnerable tenants, who in all likelihood will not be aware that two months is the default period and who might come under considerable pressure from their landlord to agree to a shorter period. New clause 53 seeks to protect such tenants by simply requiring the court to authorise any agreement in writing that provides for a notice period shorter than the two-month default. I look forward to the Minister’s response.

Photo of Jacob Young Jacob Young Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

I apologise to members of the Committee for how long it took to get through all those new clauses. However, I do not apologise for the new clauses themselves, because they strengthen the Bill and give additional rights to tenants and landlords under it. I am very proud that we have been able to add them.

I thank the hon. Gentleman for moving new clause 53, which would prevent landlords and tenants from agreeing contract clauses that override statutory provisions protecting tenants’ rights unless a court has preauthorised it.

Subsection (1) is an unnecessary provision. It is already the case that contractual clauses cannot affect statutory rights unless legislation expressly so allows. This is a long-standing principle of our legal system.

Subsection (2) would give the courts the power to authorise the waiver of tenants’ statutory rights under the Bill. That could have unintended consequences. More importantly, subsection (2) would weaken tenants’ rights. It would allow a judge to authorise the waiver of the rights that the Bill grants them. We do not think that this is appropriate or required.

Photo of Matthew Pennycook Matthew Pennycook Shadow Minister (Levelling Up, Housing, Communities and Local Government)

I note the Minister’s criticism of the new clause as drafted, but does he recognise the point it seeks to raise: the concern that vulnerable tenants might come under pressure from a landlord to agree in writing to a shorter notice period that they may not necessarily want but that comes as a precondition of the tenancy? Notwithstanding his concerns about our new clause, will the Government give some more thought to whether it is a potential weakness of the Bill and how that might be addressed?

Photo of Jacob Young Jacob Young Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

I am happy to give the matter more thought in conversation with the Opposition. We intend to give tenants as much information as possible about their rights. That has been discussed at numerous points during the Committee’s consideration. I hope he will consider that assurance sufficient to withdraw his new clause.

Clause, by leave, withdrawn.