The Renters (Reform) Bill has finally been introduced and presented in Parliament, and after much discussion with landlords and agents, it is clear there is much more to be debated.
The most important thing to note is that this Bill is not yet law. This Bill is the first step to bring this proposal into law, and it is likely that we will see many changes made to it as it progresses through Parliament. We do not expect to see it implemented as law until 2024 at the earliest.
This Bill is unlikely to be the final form of the legislation. There are some key changes the government intends to make.
End of no-fault evictions
The proposed Bill intends to end no-fault evictions (section 21 Notices), meaning landlords will only be able to serve notice on tenants when they have reason to do so. The government intend to expand the grounds under section 8, to provide greater reasons for evicting tenants, including if the landlord wants to sell or move back into the property. However, these grounds cannot be used during the first six months of the tenancy. There is also a new proposed ground for repeated serious arrears, providing mandatory grounds for possession where a tenant has been in at least two months’ arrears three times within the previous three years. It is also proposed that the notice period for the existing rent arrears eviction grounds will increase to four weeks.
It is important to note that this is not law yet, therefore, landlords can continue to serve section 21 notices on tenants at this time.
End of fixed term tenancies
The Bill also includes an intention to bring an end to fixed term tenancies. Instead, all tenancy agreements will be periodic, rolling on a month-by-month basis, with no end date. This means the tenancy agreement will only end when the tenant or landlord gives notice. In theory, this means that tenants will be able to give two months’ notice to leave the property at any time, including when the tenancy has just begun.
Removal of rent review clauses
Rent review clauses will no longer be allowed in tenancy agreements. Instead, a landlord will only be able to suggest a rent increase once a year, providing the tenant with a 2-month notice period. A tenant will be able to challenge the rent increase under the new Ombudsman Scheme that is to be set up under this Bill (discussed below).
Right for the tenant to request a pet
The Bill provides the tenant with the right to request a pet and places an obligation on the Landlord that they cannot unreasonably refuse or withhold consent. Consent or refusal must be given within 42 days of the permission being sought.
The new provision will allow landlords to protect themselves by requiring that tenants get pet insurance that covers damage to the property. We will see an extension of the Tenant Fees Act 2019 to include this as a permitted payment.
It is suggested it will become a requirement for all private landlords who rent out property in England to join a government-approved Ombudsman scheme. This will introduce a landlord redress scheme, allowing former or current tenants to make complaints against a landlord, which will then be independently investigated by the Ombudsman. The decision of the Ombudsman will be binding against landlords.
Portal of Landlords
In addition to the new Ombudsman scheme, there will be a digital property portal that will help landlords to understand and demonstrate compliance with their legal requirements. This is intended to protect both tenant and landlord, allowing tenants to know if the landlord is not complying with their requirements, and landlords to demonstrate their regulatory compliance.
The Bill is now subject to debate through Parliament. There remain many unanswered questions about the proposed grounds as well as the impact on student accommodation. As matters progress, we will ensure that we keep you updated on the progress of the Bill and its potential impact. For now, it is clear this proposed law intends to make major changes to the private rental sector, not all of which are likely to be welcomed by the industry.
Published 20 June 2023