What is the Renters' Reform Bill?
You may recall that the Renters' Reform Bill was mentioned back in the Queen’s speech in May 2022, when it was announced that ‘no fault evictions’ would be abolished. Later in June 2022, the government published “A Fairer Private Rented Sector” White Paper in which they detailed their plans for the bill. The new measures proposed are intended to improve the private rental sector.
The main proposed changes include:
· A new ‘Decent Homes Standard”
Landlords will need to consider new statutory provisions to ensure that their properties are free from health and safety hazards, such as fall risks, fire risks, or carbon monoxide poisoning, and that they do not fall into disrepair. Local councils will have the power to enforce these provisions. Given the recent headlines concerning deaths of young children due to mould, it is clear that reform is needed in this area.
· Ending Tenancies
They have advised that ‘no fault’ evictions will be abolished, meaning that landlords will need to rely on one of the specified grounds to evict their tenant. Currently landlords can serve “no fault” notices (Section 21 notices) to end a tenancy. Alternatively, if a landlord can rely on one of the grounds set out in the Housing Act 1998, they can serve a Section 8 notice to evict their tenant. The grounds currently include serious rental arrears and breaches of the tenancy agreement.
The government has confirmed that they will strengthen the grounds for possession where there is good reason for the landlord to take the property back. They plan to give Landlords the ability to evict tenants who disrupt neighbourhoods through antisocial behaviour, and introduce new grounds for persistent arrears and sale of the property.
· New Ombudsman
The bill imposes a new mandatory Ombudsman for all landlords, with a view to resolving disputes without the need for costly court proceedings.
· Rent Review
Landlords will only be permitted to increase rent once a year providing at least 2 months’ notice to tenants and rent review clauses will be prohibited. If tenants believe that the rent increases are disproportionate, they will be able to challenge the increases through the First Tier Tribunal.
How does it affect private landlords?
Private landlords will need to comply with the rules and new system when it is implemented. Whilst the proposed changes are intended to provide greater protection and powers for tenants to challenge poor practices and unjustified rent increases, there are concerns that these changes may drive landlords out of the sector and reduce the number of rented properties further. ‘No fault’ eviction notices were introduced back in 1980s to encourage the supply of private rental accommodation. As a result, some are concerned that the subsequent changes may be more damaging to the market in the long run.
When will these changes happen and how can we help?
The government will implement the new system in 2 stages. Firstly, 6 months’ notice will be given of the first implementation date, after which all new tenancies will be governed by the new rules. There will be at least 12 months between this date and the second implementation date. On the second implementation date, all existing tenancies will be then governed by the new rules. We anticipate that the Act may come into force in this year or next year in 2024.
Once the Renters' Reform Act becomes law, private landlords will have the above notice in order to be able to prepare for the upcoming changes.
If you wish us to advise upon any of the above issues, our team would be happy to help. Please do not hesitate to contact me on firstname.lastname@example.org or 01295 661587.