After several years of discussion, the Renters (Reform) Bill has finally now been published – and the starting gun has been fired for substantial changes to the private rented sector.
Running to almost 90 pages, the Bill is detailed. Giving an in-depth analysis of the content is tricky in this short Insight – and in any event, the Bill will almost certainly be subject to amendment as it goes through its journey to reach the statute books. But the key headlines for landlords and letting agents, based on the Bill as currently drafted, are as follows:
- As expected, and with just a few short, stark lines confirms the much-publicised intention to bring about the abolition of assured shorthold tenancies.
- The law regarding rent increases will be clarified, with Government proposing that landlords have to serve the statutory notice in all cases when proposing a rent increase. Given that rent arrears may well become the focus of many possession cases going forward (and demonstrating the level of rent that is payable will be important) ensuring rent increases are properly implemented will be helpful for landlords.
- The situation with pets in tenancies has often been discussed. The Bill proposes a term is implied into all assured tenancies that tenants can request to keep a pet, and landlords cannot unreasonably refuse - although landlords will be able to require tenants to either themselves insure against pet damage, or to pay the landlord’s reasonable costs of maintaining that insurance.
- The Bill proposes a duty of landlords to give a statement of terms to tenants before the tenancy commences. The Bill envisages regulations will be made re what is to be included, but there is specific mention of landlords highlighting at the outset any grounds where prior notice before the commencement of a tenancy is needed.
Also as expected, the Bill proposes an extension of the existing possession grounds to include:
- Clarifying and extended the existing Ground 1 (occupation by landlord)
- A new Ground 1A mandatory ground for possession where the landlord wants to sell (only exercisable once the tenant has been in occupation for more than 6 months and subject to some strict rules re what happens if any proposed sale does not proceed)
- A new mandatory Ground 2ZA where a superior landlord is seeking possession
- A mandatory ground 5B where accommodation is linked to employment and possession is needed for a new employee
- A new Ground 8A – a mandatory ground where a tenant has been in rent arrears of at least 2 months/8 weeks on 3 separate occasions (designed to stop those who persistently bring arrears below the 2 month level at the eleventh hour so as to prevent a Ground 8 possession order being made)
- At present, landlords who find themselves in breach of the tenancy deposit legislation and thus unable to serve a valid s21 notice have sometimes preferred to utilise the section 8 notice procedure rather than refund deposits to tenants. The Bill provides for the requirement for tenancy deposits to be secured to be a pre-requisite for obtaining possession orders in most cases (save, broadly, for cases involving anti- social or criminal behaviour)
- The Bill provides for an increased list of penalties against landlords, including the possibility of financial penalties of up to £30,000 for landlords who unlawfully evict of harass their tenants.
- The prospect of landlords having to become a member of a landlord redress scheme and ensure various details are on a landlord’s database also take step closer, although the Bill wording leaves the Secretary of State to make regulations to bring these provisions forward. The signals from the Department of Levelling Up, Housing and Communities seem to be that these regulations will be made – but the unknown is the timescales. These are both sizeable projects to pursue and will undoubtedly take time to establish.
The Bill itself makes no reference to the introduction of the private sector Decent Homes Standard, but the indication is that this will still be something the Government is seeking to legislate on, alongside making it illegal for landlords or letting agents to have blanket bans on ‘no benefits/no children.’
Watch this space for commentary on how this Bill proceeds...
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