The Renters Reform Bill was introduced to Parliament in May 2023 and if passed, will have a major impact on the private rented sector.
As the biggest change to private tenancies in over 30 years, the reforms will affect both landlords and tenants. The aim is to rebalance the rights and obligations of both.
This article provides a brief overview of the proposed changes set out in the Renters Reform Bill 2023.
Some of the key proposals are the:
- Abolition of evictions under Section 21 Housing Act 1988
Section 21 “no fault” evictions are to be abolished. The current section 21 procedure allows landlords to seek possession without having to give a reason for wanting to repossess the property or prove fault on the tenant’s part. Under the new Bill, private tenancies can only end if the tenant chooses to end it or if the landlord has a valid ground for possession under Section 8 Housing Act 1988.
These changes could lead to an increase in the number of section 21 proceedings issued by landlords before the Act comes into force.
- End of fixed term tenancies
The Bill proposes that all assured tenancies will be periodic and there will no longer be shorthold or fixed term tenancies. This means that all assured tenancies will be rolling without a specified end date.
Rent review clauses will be removed from tenancy agreements and landlords will not be able to include increases in line with the Retail Price Index. Yearly increases are still allowed and rent increase clauses can be introduced by using the section 13 notice procedure, although this can be challenged by tenants.
- Strengthening of mandatory grounds
The existing framework under Section 8 will be reformed to strengthen the current mandatory grounds and reformed to include further grounds. Some of the key amendments are:
A new Ground 1A will be added where a landlord can seek possession if they intend to sell the property (this cannot be activated within 6 months of the start of the tenancy, with exceptions)
A new Ground 8A will strengthen the landlord’s position in relation to rent arrears. This ground can be relied on if within a 3-year period ending with the date the notice is served, at least two months/8 weeks rent was unpaid for at least 1 day on three separate occasions (this does not apply to tenant’s receiving Universal Credit).
The current Ground 14 relates to anti-social behaviour of the tenant and will be amended from “likely” to cause nuisance or annoyance to “capable” of causing nuisance or annoyance. This lowers the threshold for landlords to prove anti-social behaviour of the tenant.
Under these changes, landlords can still recover their property and repossess their property where tenants are at fault (e.g. anti-social behaviour and repeat rent arrears)
- Right for tenants to request a pet
This is good news for animal lovers as tenants will have the right to request to keep a pet in their rented property and the landlord must not unreasonably refuse consent to this. As a condition, the landlord will be entitled to request that the tenant takes out sufficient insurance or pays the landlord a reasonable premium for maintaining insurance for any damage caused by the pet.
The request for additional insurance currently conflicts with the Tenant Fees Act. The Bill proposes to insert an exception into this Act so that pet insurance becomes an exception to these rules.
- New Ombudsman and portal
There is a proposed new Ombudsman that private landlords must join where tenants can submit complaints about them / the property. The Ombudsman will have the authority to force landlords to take remedial action, issue apologies or pay compensation of up to £25,000.
A Landlord Redress Scheme is also proposed to be set up which will be compulsory for all landlords to join and failure to register as a member will result in a civil penalty of up to £5,000 or a criminal penalty of up to £30,000 for repeated breaches.
Landlords will need to keep abreast of rental reforms as improvements to their properties may need to be made to meet minimum standards. Tenants will have more flexibility to end tenancies, for example, for poor quality properties or breach of landlord duties.
It is important to note that although the Bill has been introduced to Parliament, it is not currently law and amendments and / or additions will undoubtedly be made. The Bill is expected to be passed under the current Parliament which is due to run until December 2024. Until the Bill is passed, current legislation should be adhered to.
This is a brief overview of the proposed changes to the current legislation. For further information, please contact our Property Litigation and Dispute Resolution Solicitors.
For more information about Bishop & Sewell’s property litigation services please contact Lauren Fernandes in the firm’s Property Litigation and Dispute Resolution team: lfernandes@bishopandsewell.co.uk +44(0)20 7631 4141
The above is accurate as at 08 August 2023. The information above may be subject to change.
The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.
