The Renters (Reform) Bill: England Update
After the Government’s commitment to reforming the private rented sector over 5 years ago, the Renters (Reform) Bill was introduced to parliament on 17 May 2023. The new Bill is being proposed to reflect the Government’s commitment to improving housing quality and to amend the eviction process. The Department for Levelling Up, Housing and Communities which is overseeing the Bill, issued a statement saying that it will “improve the system for both the 11 million private renters and 2.3 million landlords in England.”
What are the Key Changes?
The Bill introduces a number of proposed changes. If approved, the most significant changes for private landlords are:
- Abolition of assured shorthold tenancies,
- Abolition of fixed term tenancies,
- Abolition of the Section 21 “No Fault” Notice
- New grounds of possession under the Section 8 Notice procedure
- Introduction of a Landlord Redress Scheme for the private rental sector
- Change to the rent increase process
- Increased right to keep pets
Abolition of Assured Shorthold and Fixed Term Tenancies
There will only be periodic assured tenancies with a rent period not exceeding one month. Landlords will no longer be able to offer fixed term assured shorthold tenancies.
Abolition of the Section 21 Notice
The “No Fault” Section 21 Notice will be abolished. As a result, landlords will have to rely on the Section 8 Notice procedure to start the possession process, and will need to rely on one or more of the many grounds for possession.
New Grounds of Possession under the Section 8 Notice Procedure
The Bill significantly amends the existing grounds of possession. The most significant changes include:
- Amended Ground 1: Landlords wishing to move into the property or allow family members to do so
- New Ground 1A: Landlords wishing to sell the property, and
- New Ground 8A: Repeated serious rent arrears.
The Bill also introduces a significant change to the way in which arrears are calculated under grounds 8 and 8A. For the purpose of calculating the arrears, if the tenant is entitled to receive an amount towards their housing costs as part of their universal credit payments, and there is a delay in the tenants receiving the same, any amount unpaid is to be ignored.
Introduction of Landlord Redress Scheme
The Government seeks to introduce a mandatory Landlord Redress Scheme via a new Ombudsman, as a “quicker, cheaper, less adversarial and more proportionate than the court system”. The Scheme will enable tenants to seek redress for free where their landlord has failed to deal with a legitimate complaint about their tenancy. This could include failure to repair, the behaviour or conduct of the landlord or the standard of the property.
Failure to be a member of the scheme may result in a civil penalty of up to £5,000 or a criminal offence for continued or repeated breaches.
The Ombudsman will have powers to make binding decisions including requiring a landlord to issue an apology or provide an explanation in response to the complaint. Perhaps most importantly, the Ombudsman will have the ability to order that landlords pay tenants compensation of up to £25,000.
Change to the Rent Increase Process
Rent increases will be limited to once every 12 months, and must be done via the statutory process under Section 13 of the Housing Act 1988. Additionally, the notice period of a rent increase has increased from one to two months.
The Bill suggests that landlords cannot informally agree rent increases with their tenants, nor can they have rent increase clauses in tenancy agreements.
Increased Right to Keep Pets
The Bill adds an implied term to all tenancies that tenants have a right to request to keep a pet, and that landlords cannot unreasonably refuse this request. Landlord have 42 days to reply to any request.
How long will it take for the Renters (Reform) bill to become law?
It’s very likely that the content of the Bill will be amended as it’s considered by both the House of Commons and House of Lords. However, if approved by both Houses, the Bill may come into effect in the Summer of 2024.
The Bill, if passed in its current form, sets out the significant changes that are to be introduced to the private rental sector in the near future. Looking ahead, landlords will only be able to terminate tenancies by citing one or more of the grounds of possession under the Section 8 procedure. The grounds themselves are to be amended, and the grounds relating to rent arrears appear to be more challenging if tenants are in receipt of universal credit.
For advice on the Renters (Reform) Bill, or any other landlord and tenant matter, please do no hesitate to contact our Landlord and Tenant Team on 02920 808666 or via email at [email protected].