Landlord Tenant Act Feedback and Consultation

Thank you for the providing the first step in modernizing the housing landscape in Bermuda and starting this long-needed work. I am submitting these points of feedback to support the discussion and to also based on my experience, which is also as a researcher and facilitator of the recent Chamber of Commerce Housing Presentation.

I also note that this is a rather wholesale change with the acts and this process should not be rushed, as it has been on the radar for discussion for years, and having less than 1 month of public consultation, and one round at that from the schedule in the brief, feels that this is potentially will miss over some key aspects. These points do not represent all my final comments, but represent the more material points.

I would strongly recommend to not rush this process and ensure there is adequate time for all considerations to be thought through, so this legislation achieves the correct outcomes.

 Steven M

·       Can you provide more details around the types of landlord tenant complaints received? In the brief, it said that on average, consumer affairs receive on average 2,230 complaints a year, which would represent 15% of all rental units (per 2016 census) each year filing a complaint, be it landlord or tenant, which feels high. Of the 2,230, how many are considered a serious complaint requiring some form of intervention? Based on the Judiciary Annual Report, there were an average of 39 evictions by the court per year over the past 5 years, which indicates a fairly low complaint to eviction rate.

·       To avoid confusion that exists today, the term Annual Rental Value should be amended, as this ARV currently does not reflect market values, and has not reflected market values for some time, especially given the time frame for amendments to the ARV can delayed, as they currently are. The ARV should be renamed to something like Property Assessment Rate or Property Tax Valuation to avoid confusion that arises from this, which allows the land tax base to be amended more readily without it being viewed as a rental amount.

Should the concept of Rent Control be amended?

·       Part 1 - Was there any thought to amend the Rent Control level? Currently at $22,800, there are pro’s and con’s with this, however, given the commentary in the consultation brief, I was looking for an amendment to this level, potentially downward or focused on a narrow scope of properties, not c50% of all properties as it is today..

·       Part 2 – Given the Chamber of Commerce presentation that showed that there was a concentration of Rent Control properties to certain locations and also by the type of property (as per the Land Valuation categorization), is there any thought that Apartments & Condos are treated separately than Houses and Cottages, or some other form of ensuring rent control is targeted correctly?

·       Clause 14(1) highlights that “No landlord shall impose on a tenant a daily late rental fee that exceeds 5% of the monthly rentals payable in the case where the annual rental value of the house or apartment does not exceed $60,000.”

o the language used makes this a point of confusion. If the monthly rent is $6,000 but the ARV is $4,500, is this out of scope?

o Additionally, if the rent is $5,000 a month, is this stating that the late fee, each day is $250 ($5,000 x 5%) and after 30 days, the late fee’s total $7,500 ($250 x 30), in addition to the $5,000 in rent, so total amount owing is $12,500 for the 1 month of rent that is late?

o Would the late fee be assess on the full amount of rent due or on the portion of rent not paid?

·       Clause 15(2) that permits the security deposit to be up to 3 months rent. Given the modernization of this act is to support affordability, this clause seems to be quiet heavy and potentially non affordable for most people. Can you explain the thought process of having up to 3 months of rent as a deposit? Most other countries seem to have a standard of 1 month.

·       Clause 21 does not permit a Landlord from entering the premises in the event of an emergency. In the section on interfering with reasonable enjoyment, there is a reference to “except in cases of emergency”, but there is no language in Clause 21 that permits entry for emergency causes (ie, gas leak, electrical faults, water leaks).

·       Clause 53 does not provide details under what conditions rental amounts for Rent Control can be permitted to be changed. It would make sense, as well as being less bureaucratic, to have a standard allowance for rent increases for units that under rent control, that the Rent Advisory board can outline, such as a standard permitted increase that is viewed amongst insurance, maintenance and other property related costs, and not necessarily just the CPI rate (as the price of beef or foreign travel should not directly impact the cost of a rental unit). Should a landlord wish to apply for a higher rate of increase, then it requires the advisory panel review.

·       Clauses 56-59 outline that issues with matters pertaining to the Rent Control Act are managed through the Rent Commissioner and the Courts. Is there a reason why the proposed Tribunal would not oversee initial disagreements with matters relating to Rent Control disputes (ie, landlord and tenant or landlord and rent commissioner)?

·       Is the notion of month to month leases, in the absence of a written agreement (ie, a verbal agreement only), not an option per the act going forth? Does this align with contract law? Should there remain a provision that defaults to this in the event of a lapsed rental agreement?

·       If all rental agreements are to be in writing, should there be a provision that rent agreements must be filed with the Rent Commissioner with 30 days? This can be a requirement, for any matters brought to the Tribunal, so there is a clear agreement that is in place, duly stamped and also provides a data source for viable information on rental amounts and variations being charged.

·       Further to above point, would there be scope to consider a secured deposit agreement where the Office of the Rent Commissioner is the custodian of the security deposit? This would provide a safe escrow arrangement with the ability for the deposit to be released to the landlord or tenant in the event of a dispute through the Tribunal? Funds could be kept in an interest bearing account that potentially helps partially offset some cost of the Tribunal and staff.

·       The draft legislation did not include a sample lease agreement, that given the view is to have a standard lease available, would be an important part of this consultation. When will this be available?

·       There is no clause within the Tribunal section that states the Landlord or Tenant are not permitted to retaliate against one another should one party refer their rental agreement to the Tribunal. This should be included in the Act.

·       Include a pet friendly clause that requires the landlord to offer reasonable consideration for pets. In return for this consideration, there would be an option for one or more of the following: an increased security deposit, an increase monthly rent to account for a “pet rent” and, if available (not currently) the requirement for pet property insurance, for any damages or excessive cleaning required.

·       Whilst the Rent Increases (Domestic Premises) Control Act 1978 is included in this new legislation, the Rent Increases (Domestic Premises) Control Rules 1972 (which applied to clause 35 in the current act and 58 in the proposed) and Rent Increases (Scientific Research Institutions) Order 1975 are not mentioned. Should these also be included (with prior laws rescinded) as part of this exercise?

·       Relating to enforcement power by the Tribunal, how would any financial compensation be redressed for the tenant or landlord? The Tribunal can order certain actions to be taken, but if the tenant incurs arrears and is deemed to be in fault, how can this arrears be addressed? Should the Tribunal have powers to enforce or refer to court for examination of means or garnishment or other punitive actions for repayment?

·       How do you view the Tribunal working? A practical walkthrough would be advantageous. How often would they meet, would there be full time roles to consider for this? Who will dictate the cadence and agenda for each meeting? If there are 2,230 valid complaints each year, how would the Tribunal clear 185cases a month? Would the tribunal have the power to refer matters to supreme court? Would any court powers be passed onto the Tribunal, such as being able to instruct the Chief Bailiff?

·       For the employment tribunal, the chairperson is to be a practicing lawyer with at least 8 years of service and Bermudian, whereas the requirement here is just for a practicing lawyer with 7 years experience – should these 2 tribunals be aligned from a concept of structure and chair experience?

·       What are the support programs that are being thought of to help ensure there is a social safety net for those tenants that truly fall on hard times and fall behind on rent? At times, the landlord is expected to be part social service whilst having to carry on normal cost incurring measures. Will Bermuda Housing Corporation look to have sufficient emergency housing on hand? Is there a form of short term rental assistance program through Financial Assistance or BHC that can step in for a 3 month period to support whilst a long term plan is identified?