Draft Residential Tenancy (Jersey) Amendment Law 202- (P.24/2025): third amendment

STATES OF JERSEY

DRAFT RESIDENTIAL TENANCY (JERSEY) AMENDMENT LAW 202- (P.24/2025): THIRD AMENDMENT

Lodged au Greffe on 21st August 2025 by Deputy J. Renouf of St. Brelade

Earliest date for debate: 9th September 2025

STATES GREFFE

DRAFT RESIDENTIAL TENANCY (JERSEY) AMENDMENT LAW 202- (P.24/2025): THIRD AMENDMENT

1  PAGE 53, ARTICLE 6 –

1. In Article 6, new Part 3A, new Article 7A(3) and (5), delete ", capped at 5%".
2. In Article 6, new Part 3A, new Article 7A(5)(a), delete ", but capped at a maximum of 5%".

2  PAGE 65, ARTICLE 19 –

1. In Article 19(1), delete new Article 24(1)(lb).
2. Renumber the remaining new sub-paragraphs and cross-references accordingly.

DEPUTY J. RENOUF OF ST. BRELADE

REPORT

This short amendment is accompanied by a suitably short report.

The Minister's proposals include limiting rent rises to the rate of inflation or 5%, whichever is the lower. This would mean that rents within an existing tenancy could not rise by more than 5%, whatever the rate of inflation (subject to limited exceptions). The effect of passing this amendment would be to remove this 5% cap.

The argument that rent rises should be limited to one a year, with a two month notice to the tenant, and not normally rise above inflation (subject to exceptions outlined in the Proposition) is accepted. However, the imposition of a 5% cap on rent rises is unnecessarily draconian. It fails to recognise that landlord's costs will rise as inflation rises (and in fact often rise above inflation) and asks that landlords bear the full cost of inflation once inflation goes beyond 5%.

The Minister may argue that landlords can agree a rent rise above the 5% cap, so long as they give an acceptable reason. However, the acceptable reasons defined in the legislation are limited. Only if property improvements have occurred, or if the rent has fallen "significantly" behind market rates will a rent rise be justifiable. The gradual erosion of rental income by inflation would not be covered. Only when a "significant" gap had opened between the rent charged to a tenant and the market rate would a rent rise above the 5% cap be justified.

All policy making is a balance, but the 5% cap is an unbalanced policy. At times of moderate to high inflation, it shifts the costs of inflation entirely onto the landlord. Given the wider context of this legislation, which brings considerable change to the rental market in Jersey, removing the 5% cap and sticking with an inflation cap feels like it strikes a more appropriate balance between protecting the rights of tenants and landlords.

Financial and staffing implications

This amendment would have no financial impact for the Government and would require no further staffing implications than already anticipated.

Children's Rights Impact Assessment

A Children's Rights Impact Assessment (CRIA) has been prepared in relation to this proposition and is available to read on the States Assembly website.