The use and abuse of regulations in the property sector

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The use and abuse of regulations in the property sector

The two parliamentary committees in the House of Commons and House of Lords which are responsible for oversight of secondary legislation have both issued reports examining the use of secondary regulation by the government.

Secondary legislation is the mixture of regulations, orders and guidance which is produced by government to give the detail to primary Acts of Parliament. It is important as this material is rarely scrutinised to any great degree and, depending on the primary legislation, can have very wide powers.

Both committees came to very similar conclusions. They both said that government is abusing secondary legislation and guidance and that a new deal between Parliament and executive needs to be struck if there is to be proper accountability of the executive to Parliament. While the reports did not really discuss the property sector it seems to me that the PRS has been especially ill-treated by this process.

Consider some examples. The Immigration Act 2014 introduced the Right to Rent in England. This relies heavily on a Code of Practice which is approved by Parliament, although that approval is not something that involves much real review of the document. However, the Home Office has over time made changes to the operation of the Right to Rent by changing the checks that need to be done on different groups without actually getting those changes approved. It also provides other guidance documents that say slightly different things to the Code and these impose obligations on landlords that are not in the approved guidance. The committees were critical of guidance from government that sought to add further obligations beyond the legislation they purported to explain.

On a different note, ss122 and 123 of the Housing and Planning Act 2016 allowed the government to bring in an obligation on landlords to have safety checks of their electrical system. However, the wording of that legislation is very broad and allows any form of duty to be imposed if they ensure that electrical safety standards are met. The duty can be enforced by a wide range of options. These sections were given effect by the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020. These regulations require landlords to check their fixed wiring installation and allow for enforcement by way of penalties issued by the local authority. But the way the sections of the 2016 Act are drafted the regulations could equally well have required landlords to have safety checks of all their appliances and could have been enforced by prosecutions leading to imprisonment. The committees were similarly critical of the increasingly common habit of government of creating “skeleton” bills where the bill has very minimal details and everything else is left to regulations. This is actually a pretty common problem for the PRS and similar issues can be found in relation to the client money protection provisions for letting agents.

Finally, looking at the Housing Act 2004, there is considerable powers to make alterations to this legislation.

None of these examples pick up the many changes that have been made to landlord’s rights to control their property during Covid. I am not suggesting that the government was not right to make these changes, that’s a different discussion but these changes were largely made without any real debate in Parliament by a number of regulations. In fact, the government tried to impose some of these stays unlawfully before eventually passing regulations to do so.

The PRS is a microcosm of all the issues of concern raised by the committees. It is not the only area where this happens, but it is one in which all the examples can be seen clearly. Ultimately, it is for the government to decide how it will respond to the committees but any improvement in the manner in which legislation is made will be an improvement.

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