Landlords: Your Guide to the Renters Reform Bill
The government has announced that the Renters' Reform Bill will be introduced in this parliamentary session. Wide-ranging proposals outlined in its Fairer Private Rented Sector White Paper include abolishing section 21 and introducing a single system of periodic tenancies.
The suggestions are wide-ranging but it's worth pointing out these are currently proposals for potential future rule changes. Nothing has been finalised yet.
It's still very early days in the process of reforming any of the rental rules but we are keeping a close eye on things and will update you as and when things become clearer.
The government has outlined its proposals for the Renters' Reform Bill, which will be introduced in this parliamentary session, detailed in its Fairer Private Rented Sector White Paper.
This paper builds on the Levelling Up White Paper and sets out the government's plans to fundamentally reform the Private Rented Sector and level up housing quality. The proposed reforms for the private rented sector in England go much further than initially expected, with the government calling it "the biggest shake-up of the private rented sector in 30 years”.
You can download a full overview in our e-book, Renters' Reform Bill: Your guide to the "A Fairer Private Rented Sector" white paper.
As expected, the proposals include abolishing section 21, requiring private rented properties to meet the Decent Homes Standard and establishing a new ombudsman covering private landlords and a new property portal. The government has also put forward several new proposals, including making all tenancies periodic; doubling the notice periods for rent reviews; making it illegal for landlords to have blanket bans on renting to families with children or those in receipt of benefits; and improving the rights of tenants to have pets in properties.
The government says the Fairer Private Rented Sector White Paper "marks a generational shift that will redress the balance between landlords and 4.4 million private rented tenants. It provides new support for cost of living pressures with protections for the most vulnerable, and new measures to tackle arbitrary and unfair rent increases." At the same time, the proposals to introduce Private Renters’ Ombudsman, improve grounds for possession under section 8, and introduce a new property portal will provide " the estimated 2.3 million private landlords with greater clarity and support".
Here is a summary of the proposed changes:
▶ Section 21 "no fault" evictions to be abolished
Section 21 will be abolished, so that landlords will only be able to evict a tenant in reasonable circumstances, which will be defined in law. "Removing Section 21 will level the playing field between landlord and tenant, empowering tenants to challenge poor practice and unjustified rent increases, as well as incentivising landlords to engage and resolve issues," says the White Paper.
▶ Periodic tenancies to become standard
All tenants who would previously have had an Assured Tenancy or Assured Shorthold Tenancy will be moved onto a single system of periodic tenancies. Tenants will need to provide two months’ notice when leaving a tenancy, to "ensure landlords can recoup the costs of finding a tenant and avoid lengthy void periods". Landlords will only be able to evict a tenant in reasonable circumstances, which will be defined in law.
▶ Notice periods for rent increases to be doubled
In a move to combat the cost of living crisis, rent increases will be limited to once per year and the minimum notice landlords must provide of any change in rent will be increased to two months. It will end the use of rent review clauses, "preventing tenants being locked into automatic rent increases that are vague or may not reflect changes in the market price" and says that "any attempts to evict tenants through unjustifiable rent increases are unacceptable".
▶ Minimum housing standards to be introduced
Minimum housing standards for the private rented sector (PRS) will be introduced by widening the application of the Decent Homes Standard, which currently only applies to the social housing sector. Under the Decent Homes Standard, homes must be free from serious health and safety hazards and landlords must keep homes in a good state of repair so renters have clean, appropriate and useable facilities. The government will also expand Rent Repayment Orders to cover repayment for non-decent homes. Periodic tenancies will also enable tenants to end a tenancy without remaining liable for the rent in unsuitable and unsafe accommodation.
▶ Tenants given more rights to keep pets in properties
The government will legislate to ensure landlords do not unreasonably withhold consent when a tenant requests to have a pet in their home, with the tenant able to challenge a decision. At the same time, the government will amend the Tenant Fees Act to Act 2019 to include pet insurance as a permitted payment. This means landlords will be able to require pet insurance, so that any damage to their property is covered.
▶ Bans on renting to families with children or those on benefits to be outlawed
It will become illegal for landlords or letting agents to have blanket bans on renting to families with children or those in receipt of benefits ("No DSS"). The White Paper says that, "while most landlords provide a professional service to their tenants, there is evidence that some landlords and agents are actively discouraging, or even preventing people in receipt of benefits or with children from renting their properties". The government will also explore whether action is needed to support other vulnerable groups that may struggle to access PRS accommodation, such as prison leavers.
▶ A new Ombudsman covering all private landlords
A single government-approved Ombudsman covering all private landlords who rent out property in England - regardless of whether they use a letting agent - will be introduced and membership will be mandatory. The Ombudsman will have powers to "put things right for tenants", including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000.
▶ New Property Portal for private landlords and tenants
A new digital Property Portal will be introduced to "provide a single ‘front door’ to help landlords understand, and demonstrate compliance with their legal requirements". The government says that "too often tenants find out too late that they are renting a substandard property from landlords who wilfully fail to comply, and councils don’t know who to track down when serious issues arise". It notes that the portal will also "support good landlords to demonstrate regulatory compliance and to attract prospective tenants".
If you have any questions about this please get in contact with us.
*source goodlord.co and gov.uk