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What is the Renters (Reform) Bill and what does it mean for landlords and tenants?

The government introduced the Renters’ (Reform) Bill to parliament in May 2023. Now that the Bill has been presented to parliament, MPs will have the opportunity to consider and debate the Bill at a Second Reading. 

Michael Gove has said that “Our new laws introduced to Parliament today will support the vast majority of responsible landlords who provide quality homes to their tenants, while delivering our manifesto commitment to abolish Section 21 ‘no-fault’ evictions.”

The Renters (Reform) Bill sets out the government’s plans to basically change the private rented sector (PRS) and improve housing quality.

The Bill will need to pass through parliament before becoming law. The government first published the full extent of its plans in a white paper.

The Bill confirms plans to abolish Section 32, a process that enables private landlords to repossess their properties without having to establish a fault on the part of the tenant. Instead, landlords will only be able to evict a tenant under reasonable circumstances.

The Bill also recognises that “responsible landlords” face challenges of their own and it’s designed to support these landlords, with more comprehensive possession grounds, giving landlords “peace of mind that they can repossess their property when a tenant is behaving badly, or their circumstances change”.

In place of section 21, the Bill outlines proposals to strengthen section 8. This allows a landlord to end a tenancy agreement early if they have a legal reason to do so.

This includes the introduction of a new mandatory ground for repeated serious arrears. This makes eviction mandatory where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears balance at hearing.

This aims to help landlords who have tenants that pay off a small amount of arrears, keeping them under the mandatory repossession threshold of two months’ arrears. The notice period for the existing rent arrears eviction grounds will increase to four weeks. This will ensure that tenants have a reasonable opportunity to pay off arrears without losing their home.

There is also a new ground that means landlords can apply section 8 to a tenancy if they wish to sell a property, or if they wish to allow their family members to move into a rental property. This can apply after a tenant has been in a property for at least six months.

Assured Shorthold Tenancies are currently the most standard type of rental agreement in the private rented sector. Instead, the Renters (Reform) Bill proposes that all rental properties will be under a periodic tenancy, rolling by every month without having a specified end date. The proposals outline that tenants would then 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”.

In addition, landlords would only be able to evict a tenant under “reasonable” circumstances.

The bill will make it easier for tenants to keep pets in their homes. All tenants will have the right to request a pet in their property, which “the landlord must consider and cannot unreasonably refuse”.

If a landlord denies the tenant’s request, they can challenge this decision. Where there is disagreement, a tenant can escalate their complaint to the Private Rented Sector Ombudsman or through the court, with a final decision based on the evidence provided by both parties.

To support this change, landlords will be able to require that tenants take out pet insurance.

Landlords “may” be required to join a government-approved ombudsman covering all private landlords who rent out property in England, regardless of whether they use an agent. The ombudsman’s decision will be binding on landlords, should the complainant accept the final determination and failure to comply with a decision may result in repeat or serious offenders being liable for a Banning Order.

A new digital Property Portal will also be introduced to help landlords understand, and demonstrate compliance with their legal requirements”. The nature of the portal is however yet to be determined.

This bill is of course just the initial draft. It will go through various readings, and it is highly likely that it is going to be amended. Whatever happens to the bill, the removal of the section 21 no fault eviction will happen.

Author: Tessa Rhodes, Summerfield Browne Solicitors

DISCLAIMER: This article should not be regarded as constituting legal advice in relation to particular circumstances. This article is merely a general comment on the relevant topic. If specific advice is required in connection with any of the matters covered in this article, please speak to Summerfield Browne Solicitors directly.

Published on 10th July 2023
(Last updated 18th July 2023)

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