The Renters Reform Bill
It has now been almost five months since the Government published its latest White Paper outlining the proposed reforms to the sphere of landlord and tenant law. With a draft Bill still awaited at this time however (not to mention the fact we have had two new Prime Ministers since then), it leaves open the question as to what exactly landlords should be looking out for when the draft Bill is finally published – if indeed at all.
WHAT WILL BE CHANGING?
It’s first worth reminding ourselves how we ended up in this situation.
In June 2022, the Government published its White Paper: ‘A fairer private rented sector’. At 80 pages in length, the document is both detailed and wide-ranging. Whilst there is no substitute for reading the paper itself, the more notable proposals include the following:
- Firstly, the Government intends to abolish Section 21, meaning no-fault evictions will soon become a thing of the past. Instead, landlords will have to fall back on the various Grounds which are available when a landlord wishes to serve a Section 8 notice instead.
- Secondly, fixed term assured shorthold tenancies will also be abolished. In their place will be periodic, rolling tenancies – something which the Government states it wishes to introduce in order to provide tenants with the greatest flexibility. In conjunction with this, if a tenant wishes to terminate such a rolling tenancy, then this will typically require they give at two months’ notice.
- The Grounds under Section 8 are changing. As regards the various Grounds relating to Section 8 eviction notices, several changes are being introduced here.
The first batch of changes concern completely new eviction grounds. These will include instances where a landlord wishes to sell their property, as well as instances where the landlord themselves (or their family) wish to move into the property. Such Grounds however will require that the landlord give at least two months’ notice to the tenant, as well as the landlord being unable to rely on these grounds during the first six months of the tenancy.
Likewise, another new ground will be instances of ‘repeated serious arrears’, which the White Paper broadly defines as being available in situations where a tenant has been in arrears exceeding two months, and has been so on at least three occasions over the last three years. This will be a Mandatory Ground (meaning the Court must make a Possession Order if the ground is made out), with this remaining the case even if the arrears are nil on the day of the hearing itself.
The second batch of changes concerns amendments to the existing Grounds involving rent arrears. In particular, the amount of notice which tenants are entitled to is now being doubled from two weeks to four weeks. In addition, the paper indicates that –if the reason why the arrears have arisen is due to some delay on the part of the DWP paying the tenant any benefits– then that may impact on whether a landlord can rely on such arrears if they wish to serve a notice.
Another promised change is also to the Grounds relying on anti-social or criminal behaviour, with the notice period for the Mandatory Ground being reduced from one month to something shorter (though the paper fails to say what at this stage).
- Rent review clauses will be abolished. The paper proposes to abolish rent review clauses completely, though will still allow rent increases, provided they are limited to once a year. Tenants will also have the ability to challenge any proposed rent increase and to refer the matter to the First Tier Tribunal.
- A new Ombudsman will be introduced, which landlords must register with. Tenants will be able to refer a complaint to the Ombudsman, for free, and the Ombudsman will have considerable powers at their disposal, which include compelling landlords to issue an apology, provide information, take remedial action, as well as paying compensation up to £25,000.00.
- More money will be invested in the court system. The paper proposes to tackle the existing backlog of cases through greater investment, in particular by recruiting more Bailiffs to deal with the delay involved between their instruction, and their eventual attendance at the property to remove the tenant.
- There will be enhanced repair duties on landlords. At present, all social housing must comply with the ‘Decent Homes Standard’, which sets out the minimum standards properties have to comply with. That is now being extended to all private rental properties as well. What this means in a nutshell, is that private landlords will now have to ensure that properties are free from things which pose a safety hazard, anything which poses a ‘fall risk’, anything which poses a ‘fire risk’, etc.
- There will be a new ‘Property Portal’ which landlord must also sign up to. This is designed to be an online portal which acts as an information bank for both landlords and tenants. Landlords will be required to join this Portal, with local authorities being able to penalise those that fail to register. The paper also indicates that, if a landlord is subject to any enforcement action by the council, then this will also be recorded on the Portal so that tenants can research their landlord before agreeing to enter into a tenancy of the property.
- Landlords will be under a duty to not unreasonably withhold their consent if a tenant wishes to have a pet. Landlords will however at least be allowed to require the tenant to obtain pet insurance as a condition, so that any damage is –in theory– covered.
- Deposits should become easier to ‘passport’. Finally, mention is also made about transferring any deposits which are protected in a government scheme in the event the tenant wishes to move. At the moment, there is usually delay between the scheme releasing an old deposit to a tenant, who needs to money to pay to their new landlord as part of their new tenancy. The paper therefore proposes to introduce a ‘passporting’ system when it comes to transferring deposits.
In summary, the paper proposes a good deal of changes – most of which appear to tip the balance further in favour of tenants rather than landlords.
WHEN WILL ALL THIS BE HAPPENING?
The Government published its first detailed paper back in February 2022 when it confirmed it would be bringing forward a ‘Renters’ Reform Bill’. The proposals were then mentioned in the Queen’s Speech in May of this year, with the latest Government paper being the one published in June 2022. The then-Levelling Up Secretary, Michael Gove, stated that the Bill would be introduced to Parliament by the end of 2022.
We have however of course subsequently had the premiership of Liz Truss.
Whilst nothing was explicitly stated on this point, at the recent Conservative Party Conference, when she was asked whether the Government would still be going ahead with the proposals set out in the Government’s paper, the general answer was ‘no comment’.
Following Liz Truss’s resignation however, the new Prime Minister, Rishi Sunak, has re-appointed Michael Gove to his former post of ‘Levelling-Up Secretary’, with it therefore remaining to be seen if Mr Gove wishes to revive his earlier proposals and ultimately bring forward a draft Bill in line with his White Paper.
In short, the frustrating answer is ‘We simply don’t know when, if at all, these proposals will now be going ahead’.
It is however likely that we will certainly be seeing some reform in this area, though the exact extent remains unclear. The White Paper does however promise that any changes will be introduced gradually. The first changes will be introduced with at least six months’ notice, with the second set of changes taking effect at least 12 months after the first. Landlords therefore at least have the peace of mind of knowing that it will be 18 months before the full raft of changes are fully implemented, which should allow everyone enough time to take what steps they need to in respect of their properties.
If you would like advice regarding any of the above, please contact our Dispute Resolution Team on 01204 377600