‘Substantial change’ guidelines welcome but statutory definition required - Threshold
23 November 2017
The national housing charity, Threshold has given a broad welcome to the guidelines for good practice in the ‘substantial change’ exemption in Rent Pressure Zones, however, it is reiterating its call for the term to be given a legal definition. The guidelines, which provide a list of renovation works ‘likely to constitute a substantial change’ and actions considered to be ‘general upkeep/upgrade repairs’ that are not likely to constitute a substantial change were published today (23.11.17) by the Residential Tenancies Board.
Commenting, Threshold chief executive, John-Mark McCafferty said: “Landlords evicting tenants from their homes on the grounds of ‘substantial renovation’ is an issue that clients have been coming to Threshold with for a number of months now. A landlord may lawfully evict a tenant if he requires vacant possession of the property to carry out ‘substantial renovation or refurbishment’. However, the property is still subject to the four per cent rent cap introduced by the Rent Pressure Zone legislation. There is an exemption to the RPZ legislation where the landlord substantially ‘changes the nature’ of the accommodation. This allows the landlord to set the rent after the change at above the four per cent limit. We have noted, in the absence of definitions of these terms, a growing practice of landlords conflating the two terms. Therefore, the introduction of guidelines to give clarity to both landlords and tenants on ‘substantial change’ is to be welcomed.
“However, we are concerned that these are guidelines only, and the language used is vague, open to interpretation, and offers landlords combinations of works that may or may not constitute a substantial change. This lack of certainty will result in disputes and will not provide much comfort for our clients in these situations. Any sort of guidance is a poor second to a proper legislative statement. This document in particular falls between two stools: it is neither a technical engineering guidance document nor a short unambiguous statement of the law. To be truly effective, the term ‘substantial change’ needs to be given a statutory definition and we call on the Government to do this as a matter of urgency.”
He added: “We are also calling on the Government to introduce measures to ensure that vacant possession is actually required for renovation work to be carried out, and if that is the case, that the landlord accommodates tenants elsewhere while these works are ongoing.
“If minimum standards were enforced effectively through an NCT-type system, landlords would have less scope to use what in some instances is simply necessary maintenance as an excuse for vacant possession. We are proposing a system whereby landlords would be obliged to provide a certificate of fitness to the local authority with regard to minimum standards and fire safety before they could rent out a property.”