In depth look at the Renters Reform Bill
Almost a year since the release of the Fairer Private Rented Sector White Paper and four years after it was first announced by Theresa May, the Renters Reform Bill has been introduced to parliament. This will amend the Housing Act 1988.
We are still reviewing the draft legislation in detail so for now, here are some of the headline points.
Fixed Tenancies to be unlawful
Currently you can have a tenancy that is for a fixed period of time. For example a fixed 12 month contract from the 1st January to 31st December. The new legislation proposes to remove fixed contracts so that all contracts will start on a rolling month to month contract. This would mean that a tenant could serve notice a month after they have moved in if they wanted to leave.
This will also be problematic for student landlords. This market relies on having fixed contracts that follow the academic year.
Abolishing the Section 21 Notice
This is the notice that a landlord can serve on a tenant asking them to leave the property in two months. It is dubbed the ‘no fault eviction’ notice because a landlord does not need to give a reason for serving it.
Shelter claim that 230,000 of these were issued in the last year in order to suggest that landlords are evicting just for the sake of it. The reality is that they will have been issued where a tenant is in rent arrears, displaying anti-social behaviour or being uncooperative. This is because it is a simpler route than having to use the Section 8 process which is laborious and hampered by the delays in obtaining a court hearing.
Under the new laws, landlords will no longer be able to serve a Section 21.
Strengthening Section 8 grounds
It seems as if the grounds on which you can serve a Section 8 notice are to be strengthened. This is a positive change as many of the current grounds are obsolete or not fit for purpose. You will find a list of the proposed new grounds, and their notice periods, at the end of this article.
Student landlords in particular will be affected by removal of Section 21 as they need the assurity that current tenants will leave at the end of the academic year. There are no Section 8 grounds under the proposal that would allow student landlords to end tenancies making them wholly reliable on tenants giving notice.
Notice using grounds of wanting to sell or move back into the property for example, can not be served in the first six months of a new tenancy.
Breaches of deposit protection by landlords
Currently if a tenants deposit is not protected correctly with one of the approved schemes, you cannot serve a Section 21 notice (although you can use a Section 8) without first returning the deposit in full. The draft legislation will shift this requirement to Section 8 notices once the Section 21 is abolished.
Notice by the tenant
The tenant will be required to give two months notice to end at the end of a rent period.
There will be a mandatory requirement to join a single redress scheme. Tenants will have the ability to escalate complaints about their landlord to the scheme who will rule depending on the evidence. New regulations will be written allowing the schemes rulings to carry the same power as a court order.
Landlords will also be required to adhere to the Code of Practice and breaches of this can carry fines of up to £5,000 or in the case of repeated breaches, £30,000.
There will be a cost involved and landlords will be required to pay a fee per property that they register. Letting Agents will continue to be members of their own Ombudsman.
A database will be established which will be open to the public. Landlords will need to register themselves and details of their property. As there will be separate regulations written for this part of the Act, we do not yet have details of other information that will be required.
It is likely though, that this will mean having to upload gas and electrical safety records, Energy Performance Certificate and any licences. A fee will be payable for an entry on the database.
It will be unlawful to market a property to let unless the landlord and property are registered on the database, although it seems as if there will be a 28 day grace period from initial registration to comply with uploading safety records etc.
The new legislation will make it a starting point that landlords must not refuse a tenants request for a pet without good reason. It will be up to the Redress Scheme or a court to decide what a reasonable refusal would be. This would include restrictive covenants by superior landlords (i.e blocks of flats).
Landlords will be able to insist that a tenant takes out pet insurance to cover damage as part of their consent, or the landlord can take the insurance and charge the tenant for this.
The draft legislation does not include rent controls. It does make it clear that rent can only rise in line with the current market value and notice of any increase will need to be two months long. Increases will only be allowed once a year using the Section 13 process. Tenants will still be able to appeal to the First Tier Tribunal.
Some other takeaway points from the draft legislation include that all tenancies will need to be in writing, there will be increased enforcement powers for local authorities and increased penalties for landlords convicted of unlawful evictions under the Protection from Eviction Act 1977.
The court process will be digitalized making it much quicker to obtain a hearing and less arduous.
Advertising with blanket bans including “no children” or “no housing benefits” will also be unlawful and landlords will need to demonstrate that they did not discriminate if favouring one tenant over another.
When will this become law?
As the Bill makes its way through parliamentary process, there will be changes to the current proposals.
The second reading of the Bill is taking place today (18th May 2023). After this the Bill will pass to the Committee Stage where it will be scrutinised by a cross-party committee of MP’s. At this stage evidence for improvements will be heard and new clauses suggested.
From here it moves to the Report Stage at which point all MP’s can suggest changes. The Third Reading swiftly follows before the Bill is then introduced into the House of Lords. The process is broadly similar to the House of Commons.
The final Bill will be produced once both Houses have agreed amendments, and will be sent for Royal Assent.
The Government have confirmed that they will give at least six months notice before implementation. That said, they will have one eye on a general election next year and as this is seen as a vote winner amongst tenants, it is likely this will come into effect in early 2024.
It is natural to be resistant to change and whilst we have known about this for a long time, there is always an initial sense of defiance. Having briefly read the draft legislation I am not so sure that decent landlords need be too concerned. The loss of Section 21 is an annoyance but the reality is that this notice is rarely used except when the landlord genuinely needs the property, or the tenant is misbehaving. The vast majority of landlords have never issued a Section 21 notice.
It is pleasing to see that Section 8 grounds are being strengthened. We have seen a rise in Anti Social Behaviour by tenants in recent years so the ability to end the tenancy more easily will be helpful. Databases and redress schemes will of course carry a cost (tax deductible!) but will improve the standards across the sector.
More detail will come in due course once draft regulations are published to support the new legislation so we will continue to monitor and post updates on our resources page.
Additional Guidance can be found here
Reformed grounds for possession
|Ground||Explanation||Notice period||Mandatory or discretionary|
|Moving in||The landlord or their close family member wishes to move into the property.||2 months||Mandatory|
|Selling||The landlord wishes to sell the property.||2 months||Mandatory|
|Selling (rent-to-buy)||The landlord is a private registered provider of social housing and there is a rent-to-buy agreement.||2 months||Mandatory|
|Mortgage repossession||The property is subject to a mortgage and the lender exercises a power of sale requiring vacant possession.||2 months||Mandatory|
|Superior lease ending||The landlord’s lease is under a superior tenancy that is terminated by the superior landlord.||2 months||Mandatory|
|Possession by superior landlord||After a superior tenancy ends, the superior landlord becomes the tenant’s direct landlord, and seeks to take possession.||2 months||Mandatory|
|Student accommodation||In the 12 months prior to the start of the tenancy the property has been used to house students. This can be used by educational establishments and PBSA only.||2 weeks||Mandatory|
|Ministers of religion||The property is held for use by a minister of religion to perform the duties of their office and is required for occupation by a minister of religion.||2 months||Mandatory|
|Agricultural workers||The landlord requires possession to house someone who will be employed by them as an agricultural worker.||2 months||Mandatory|
|Employment criteria||The social landlord requires the dwelling to let to someone based on their employment eligibility (e.g., key workers).||2 months||Mandatory|
|Employment by landlord||The dwelling was let as a result of the tenant’s employment by landlord, and the employment has come to an end OR tenancy was not meant to last the duration of the employment and the dwelling is required by new employee.||2 months||Mandatory|
|End of employment related criteria||The social landlord must have granted the tenancy because of the tenant’s employment eligibility (e.g., key workers) and they no longer meet those criteria.||2 months||Mandatory|
|Used for supported accommodation||The provider requires possession from a non-supported accommodation resident to relet as supported accommodation.||4 weeks||Mandatory|
|Supported accommodation (mandatory)||The provider requires possession because support services or funding has ended or fallen away; the provision is no longer meeting the tenant’s needs; the placement was ‘move on’ accommodation.||4 weeks||Mandatory|
|Temporary Accommodation||The landlord is ending a tenancy granted because the household is owed the homelessness duty.||4 weeks||Mandatory|
|Redevelopment||The landlord is seeking possession to redevelop at least 6 months after start of tenancy. Must demonstrate changes cannot be done with the tenant living there.||2 months||Mandatory|
|Enforcement action||The landlord is subject to enforcement action by Local Authority or banning order by First-tier Tribunal and needs to regain possession to become compliant. Refused/Revoked HMO licenses etc.||2 months||Mandatory|
|Death of tenant||The tenancy was passed on by will or intestacy. Possession proceedings must begin no later than 24 months after death.||2 months||Mandatory|
|Severe ASB/Criminal Behaviour||The tenant convicted of a criminal offence, breached an IPNA, breached a criminal behaviour order, or convicted of causing noise nuisance.||Landlords can make a possession claim immediately||Mandatory|
|No right to rent||At least one of the tenants has no right to rent under immigration law.||2 weeks||Mandatory|
|Serious rent arrears||The tenant is at least 2 months in arrears at the time notice is served and the court hearing. Exemption for outstanding benefit payments.||4 weeks||Mandatory|
|Repeated serious arrears||Three separate instances of at least 2 months of arrears over a 3 year period.||4 weeks||Mandatory|
|Suitable alternative accommodation||Suitable alternative accommodation is available for tenant.||2 months||Discretionary|
|Any rent arrears||The tenant is in any amount of arrears when notice is served and on the day of their court hearing.||4 weeks||Discretionary|
|Persistent arrears||The tenant has persistently delayed paying their rent||4 weeks||Discretionary|
|Breach of tenancy||The tenant is guilty of breaching one of the terms of their tenancy agreement.||2 weeks||Discretionary|
|Deterioration of property||The tenant has caused the condition of the property to deteriorate.||2 weeks||Discretionary|
|Anti-social behaviour||The tenant or anyone living in or visiting the property has been guilty of causing nuisance or annoyance to the landlord or anyone living in, visiting or in the locality of the property, or has been convicted of using the premises for illegal/immoral purposes, or has been convicted of an indictable offense in the locality.||Landlords can make a possession claim immediately.||Discretionary|
|Domestic Abuse||Social landlords only. Evict the perpetrator of domestic violence if the partner has left the property.||2 weeks||Discretionary|
|Rioting||The tenant or other adult living at the property has been convicted of an indictable offence which took place at a riot in the UK after 13 May 2014.||2 weeks||Discretionary|
|Deterioration of furniture||The tenant has caused the condition of the furniture to deteriorate.||2 weeks||Discretionary|
|False statement||The tenancy was granted due to false statement.||2 weeks||Discretionary|
|Supported Accommodation (discretionary)||The tenant has unreasonably refused to cooperate with the support service provided.||4 weeks||Discretionary|
Please note the date this article was published as the law or the essence may have changed since it was posted. You should always seek independent legal advice if you are intending to rely on any of the contents.
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