Renters (Reform) Bill – What We Know Now
Wednesday 2nd August 2023
Since my last update on this topic Update on the Renters (Reform) Bill – Anti-Social Behaviour Powers for Landlords – Gordons LLP the Renters (Reform) Bill in its current draft has now been released, together with explanatory notes Renters (Reform) Bill – GOV.UK (www.gov.uk).
It still has to pass through a number of stages before it becomes law, but below is a quick overview of what we now know about the proposed content.
Most new tenancies in the private rented sector are fixed term assured shorthold tenancies. Currently, a landlord can end an assured shorthold tenancy by either giving to the tenant a section 8 notice citing a ground for possession, or by giving the tenant a section 21 notice requiring the tenant to give up possession, but without requiring a reason (ground) to be provided.
The Renters (Reform) Bill will make significant changes to the Housing Act 1988.
Changes Introduced by the Bill
- Abolishing section 21
The Bill abolishes section 21 ‘no fault’ evictions and fixed term tenancies. All tenants who would have previously had an assured shorthold tenancy for a fixed period, usually 6 or 12 months, will move onto a single system of periodic assured tenancies.
The tenancy periods will be the same duration as the period for which rent is paid, which will have to be monthly or no more than 28 days long.
This will give tenants more flexibility to end tenancies where they need to, including where landlords are failing to meet their obligations, or properties are poor quality.
Tenants will need to provide two months’ notice when leaving a tenancy. Landlords will only be able to evict a tenant if they can make out one or more of the grounds for possession.
- Changes to grounds for possession
The grounds for possession that landlords must use to evict their tenants are in Schedule 2 of the Housing Act 1988.
Landlords were told that the Bill would strengthen the possession grounds to compensate for the loss of Section 21 notices. The Bill introduces a few new grounds, but it remains to be seen whether they will be fit for purpose from landlords’ point of view. The most relevant changes to the grounds for private landlords are:
- A ground for landlords who wish to sell their property;
- An amendment to the ground for landlords who wish to move into the property themselves, to include close family members. These grounds will not be available in the first six months of a new tenancy, mirroring the protection tenants currently receive;
- A new mandatory ground for repeated serious rent arrears, which can be used where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears balance at hearing. This appears designed to prevent tenants avoiding the current mandatory rent arrears ground by paying just enough to bring the arrears below two months. Landlords will need to keep accurate statements of the rent arrears in order to evidence this ground;
- The mandatory rent arrears notice period increases to four weeks from the current two weeks;
- For the anti-social behaviour grounds (7A and 14) landlords may begin court proceedings immediately after serving the notice, although a court cannot make an order for possession until at least 14 days after the landlord has given notice to the tenant;
- An expansion of the discretionary eviction ground for anti-social behaviour to include any behaviour ‘capable of causing nuisance or annoyance’ rather than the current “likely to”.
- Rent Increases
The notice period for a rent increase will increase from one month to two months. The new rent amount will take effect two months after notice is issued, unless it is challenged by the tenant in the First-Tier Tribunal, or if the landlord and the tenant agree on a different variation of rent.
The aim of this policy is to stop retaliatory rent increases being used as a route to evict tenants.
- Renting with Pets
The Bill requires landlords not to unreasonably withhold consent when a tenant requests to have a pet in their home, with the tenant able to challenge a decision.
Section 16A makes it an implied term of every assured tenancy that a tenant may keep a pet with the landlord’s consent unless the landlord reasonably refuses. Section 16A also sets out the number of days within which a landlord must respond to a written request from the tenant.
Landlords can require a tenant keeping a pet to enter into a contract for pet insurance or take out the insurance and charge the premium to the tenant, to help ensure the costs of any damage to their property is covered.
- Redress Schemes
The Bill enables the government to approve or designate one or more redress schemes which all private landlords who rent out property on an assured or regulated tenancy in England will be required to join, regardless of whether they use an agent.
This will ensure all tenants under relevant tenancies have access to redress services to deal with their complaints, and that landlords remain accountable for their own conduct and legal responsibilities.