Landlord and Tenant Update: Mandatory “Rent Safe” Scheme Evicted by the States
In December 2021, Senator Kristina Moore lodged a proposition seeking legislative amendments to place the “Rent Safe” scheme (the “Scheme”) – which is currently operated on a voluntary basis – on a mandatory footing.
On 10th February 2022, Senator Moore’s proposition was defeated in the States by 26 votes to 20.
The Proposition
Senator Moore’s proposition invited the States to request the Minister for the Environment to:
- Bring forward forward legislative amendments to make it mandatory for landlords to register under the Scheme; and
- To develop a process for the regular renewal of Rent Safe registrations based on a risk based approach.
On 26th January 2022, Deputy Rob Ward lodged an amendment to Senator Moore’s proposition seeking to extend the scope of the legislative changes so as to make it mandatory for landlords not only to register with the Scheme but also to be accredited under it before they are allowed to rent their properties. That amendment was accepted by Senator Moore.
What is the Rent Safe Scheme
The Scheme is currently voluntary and is operated by the Environmental Health Department. It is designed to promote and ensure minimum standards for residential properties which are leased to tenants.
Whilst all landlords are currently able to register their properties through the Scheme, it is only those who achieve accredited status who are listed on the Rent Safe Register .
In order to join the Scheme, the landlord must first complete a self-assessment form. The property is then inspected by an officer from the Environmental Health Department who produces a report in respect of the property and rates the property based on the report’s findings.
The Rating System
The Scheme operates on a 5-star rating system. In order to be accredited and therefore listed on the Scheme’s register, a landlord much achieve at least a 3-star rating which confirms that the property meets the minimum Rent Safe standards. In order to achieve a 4-star rating, the property must exceed those standard. A 5-star rating is achieved if energy efficiency measures are also in place.
Failure achieve a 3-star rating will mean that property is not accredited and not listed on the Scheme’s register.
The Minimum Standards
In broad terms, the minimum standards are intended to ensure that rental properties are secure, in a good state of repair, adequately lit and ventilated, protected by fire detection systems and generally free from hazards.
They are also intended to ensure that the landlord complies with the requirements of the “myDeposit” Scheme, provides the tenant with an adequate tenancy agreement and inventory and arranges regular checks of any gas and electrical installations by qualified technicians.
The Debate
The Proposition was the subject of in-depth debate by States members.
The general message from the debate was that whilst the intentions behind Senator Moore’s proposition were laudable, the introduction of a mandatory Rent Safe scheme could lead to significant negative unintended consequences, including an exodus of landlords who were not prepared to incur time and cost in dealing with regulatory requirements leading to a reduction in available rented accommodation.
Critics also suggested that making the Scheme mandatory, in its current form, would likely give rise to resourcing issues within the Environmental Health Department. It was suggested that a further 20 staff would need to be hired in order to manage the Scheme if it was placed on a mandatory footing in its current form.
The Minister for Housing and Communities (Deputy Labey) suggested during the debate that any mandatory regulatory scheme in respect of landlords should be introduced in the context of the wider and more comprehensive review of the Residential Tenancy (Jersey) Law 2011 which he had instructed his officers to undertake and only after full public consultation had taken place.
On 4th February 2022, Deputy Labey signed a Ministerial Decision authorising his officers to liaise with the Legislative Drafting Office to prepare a new draft of the residential tenancy law.
The report annexed to that Ministerial decision made reference to the introduction of a “simple streamlined landlord register” which would be “designed to have minimal impact upon landlords and tenants through levels of paperwork, inspections and similar”.
Whilst Senator Moore’s proposition failed to pass muster in the State’s this week, it appears that the debate in respect of the regulation of rented residential properties will continue. To the extent that a mandatory regulatory scheme is to be introduced in relation to landlords, it is likely to be introduced in the context of more comprehensive legislative changes.