Propertymark has made recommendations to improve the Draft Residential Tenancy (Jersey) Amendment Law 202-being conducted on the Channel Island of Jersey.
The island’s residential tenancy law has been in place since 2011 and the draft amendment law has been proposed by the Minister for Housing Sam Mézec with the intention of providing ‘more affordable homes for Islanders and more confidence for the rental sector’ and improving ‘tenancy arrangements for both tenants and landlords.’
Rent increases would be restricted to once every year, with landlords expected to provide at least two months’ notice, should the draft amendment law be enacted.
However, landlords who have made substantial enhancements to their properties could be exempted, as could properties where the rent has dropped significantly below existing market rates. Also, an independent Rent Tribunal would be created to navigate disputes about rent increases.
Furthermore, fixed-term tenancies, which normally last from one to three years, would no longer be available (except for one initial period) and would default to periodic tenancies without a fixed end date, and just one month’s notice would be required for a tenant to withdraw from a tenancy, with no reason necessary.
Landlords would be able to provide shorter notice periods in certain circumstances such as a personal necessity for the property or serious misbehaviour from tenants.
Additionally, landlords would have to give information on the rents they charge on renewal of the biannual Rented Dwelling Licence and to include details of any extra fees or charges in the agreement at the beginning of each tenancy. They would also have to insure their properties to cover any reasonable risk, loss or damage.
Finally, landlords face criminal penalties if they knowingly or recklessly issue false or misleading reasons for stopping a tenancy.
Propertymark wants to see enhanced conditions for renters and improved security and affordability in the private rented sector, but the proposed reforms must be enacted in a fair and balanced manner.
There are many proposed areas within the Government of Jersey’s draft amendment law that Propertymark believes will help provide improved conditions and more security and affordability for renters, like transparency on fees and requiring landlords to have buildings insurance. However, the professional body has concerns with ‘inflation linked rent control’, as the proposal in its existing form is highly likely to force landlords to remove property from the private rented sector, reduce supply, and make rents more expensive for tenants because of limited supply.
Because new landlords have had to pay an extra 3% stamp duty since January 2023, these costs will then get passed on to tenants also in the form of higher rents. Also, the removal of fixed term leases may increase uncertainty for landlords as they may not be sure how much income they will receive within a certain timeframe for a tenancy.
Propertymark has suggested that there needs to be more consistency in time periods for landlords, agents, and tenants.
They have also highlighted that it is not obvious why fixed-term tenancies can still be used but only as a ‘one-off’ where at the end of an initial fixed term, the agreement has to end, or it becomes periodic automatically.
Regarding an independent Rent Tribunal, there needs to be more clarity over whether it will be free of charge to use for both tenants and landlords.
Propertymark has recommended that the Minister for Housing’s should consider effectively enforcing existing laws and analysing them effectively, assessing the role of new reasonable guidance in assisting both landlords and tenants, reviewing all costs and taxes impacting private landlords like stamp duty, and exploring boosting standards through property redress schemes similar to the ones available in the UK like The Property Ombudsman and The Property Redress Scheme.
Gill Hunt, Propertymark Regional Executive for Jersey, says: “While the Minister for Housing’s aim of providing more affordable homes for the people of Jersey is admirable, it is important that existing laws are analysed effectively alongside the role of current guidance in helping both landlords and tenants, and the rate of taxation impacting private landlords.
“There is also much confusion around the changes to fixed-term tenancies, and the negative impact these measures could have on the limited supply of homes. Propertymark looks forward to working with the Government of Jersey in delivering legislation that can improve the lives of Jersey’s islanders without negatively impacting the housing market here.”
