Speaking at the National Housing Federation annual conference in Birmingham last week, Falconer said the uncertainty over the notices' legality was a "lawyer-driven issue".
"When I first heard about this I said 'I don't believe any court would accept this'," the lawyer turned politician explained. "But I was told I was the minister and not the lawyer and that I should shut up."
Falconer was referring to the questionable legality of some rent increase notices, first exposed by this magazine (Housing Today, 31 May).
Two housing associations are preparing for a landmark court case over the notices, sparking fears that RSLs across the country may have implemented unlawful rent increases.
The case centres on section 13 of the Housing Act 1988. Under this, a "provision" should contain the exact date and amount of periodic tenancy rent increases, or at least a means of working out the increase.
A statutory form notice must be used, but some RSLs have altered theirs to make them easier to understand, unwittingly falling foul of the law.
And using the first Monday in April every year to issue notices may mean it misses the "first anniversary rule" – the full year legally required.
Housing law experts remain divided on whether millions of pounds of rental income will have to be returned to tenants.
But Falconer was confident the matter could be resolved without litigation, especially annuality issues.
"We can use procedures in parliament which will allow you to correct the anomaly which has arisen," he told delegates. "I very much understand the threat it poses to RSLs but it's a lawyer-driven issue which we should be able to put to bed as soon as possible."
The government was considering a deregulation order to make the notices more "user friendly" without resorting to creating new legislation, the minister explained.
But federation policy officer John Bryant struck a note of caution. "What Lord Falconer said is very reassuring but until a court has given us a definite pronouncement, we shall not know for sure and we believe associations should treat this issue with care," he said.
Falconer also played down fears that rent restructuring would adversely affect the financial viability of RSLs.
"I am confident the great majority of RSLs can achieve both rent restructuring and maintain stock," he said.
The government was committed to reform of rents, and there were no plans to change the "fundamental basis" of restructuring, Falconer added.
Source
Housing Today
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