The Government’s long awaited Renters (Reform) Bill has now been published. You can read the full Bill by clicking here.
Landlords are concerned, to put it mildly.
The Bill has only had its First Reading. There are a multitude of further stages, both within the House of Commons and the House of Lords before the Bill will be sent to the King for Royal Assent. It is expected to reach this stage towards the end of 2023 or early 2024.
The Government has confirmed that it will provide at least six months’ notice of the first implementation date, after which all new tenancies will be periodic and governed by the new rules. Existing tenancies will be given a further twelve months’ notice from the first implementation date to convert to the new system.
The proposed measures are as follows:
Abolition of section 21 and removal of fixed term tenancies
The idea is to provide more security for tenants, whilst also allowing them the flexibility to move on if and when they need to.
The section 21 notice will be abolished, and in its place the section 8 grounds for possession will be extended significantly for landlords who wish to regain possession of their properties (click here for the full list of grounds). Landlords won’t be able to use grounds for moving in, selling or redevelopment for the first six months of a tenancy.
Grounds can be either mandatory or discretionary. Where court action is required, for mandatory grounds, judges must award possession when a landlord can evidence the ground is met. Discretionary grounds allow a judge to consider whether it is reasonable to award possession, even where the ground is met.
The Government are offering reassurances that the process to remove tenants will be made simpler and quicker.
With the removal of fixed term tenancies, notice periods for tenants will be increased to two months,in line with rent payment periods.
Introduction of a new Private Rented Sector Ombudsman for landlords
This will apply to all landlords, regardless of whether they use an agent. The aim is to provide a free redress scheme for tenants where their landlord has failed to deal with a legitimate complaint.
Membership will be mandatory, and the Ombudsman will have powers to put things right including making landlords pay compensation of up to £25,000 to tenants.
Strengthened protection for tenants against rent increases
Seemingly being introduced as a measure to avoid landlords increasing rents to above market rate to force tenants to leave, it is unclear at this time how this will be different to the current protection tenants have via the First-tier Tribunal, which already allows them to challenge what they believe to be above market rate rent increases.
Creation of a Private Rented Property Portal
The idea of the portal is to help landlords understand their legal obligations and demonstrate compliance.
All landlords and their properties will be legally required to be registered.
Tenants will also have access to the portal, enabling them to make an informed decision before renting a property and allowing them to take effective action to enforce their rights during a tenancy.
Introduction of a statutory right for tenants to request a pet
Landlords will still be able to refuse this request, but only if it is “reasonable” for them to do so, such as a superior landlord prohibiting pets.
If a tenant feels that their request has been unreasonably refused, they can escalate their complaint to the Private Rented Sector Ombudsman.
Should a landlord give consent, in an amendment to the Tenant Fees Act 2019, landlords will be able to require the tenant to buy insurance to cover damage caused by the pet.