Renters Reform Bill

Getting rid of “no fault evictions” seems to be included in the manifesto of most, if not all, political parties. We will have to wait and see if the next Government gives priority to the Bill. Whenever the Bill is passed, as things stand it will not come into force for 6 months after the Act is granted Royal Assent and for existing tenancies another 12 months to transition after the Act comes into force.

Some of the “highlights” of the Bill are:-

• Section 21 Notices will no longer exist
• All new Tenancies will be Assured Tenancies. Existing Assured Shorthold Tenancies will convert 12 months after the Act becomes law.
• There will be no fixed term Tenancies. All Tenancies will be periodic.
• There will be a new Ground 8(A) with other Grounds under the Housing Act 1988 being expanded.
• Deposit protection will be linked to Section 8 (in other words unlike currently a deposit will need to have been protected if a Landlord is going to rely on Section 8).
• It is not going to be possible to increase rent by a contractual term in the tenancy agreement. Rent will be increased by Section 13 Notices (likely leading to an increase in rents being referred to the First Tier Tribunal for a determination).
• There will be a new implied term which will allow tenants to have pets in the property unless the Landlord can reasonably object. (Might this lead to an increase in rents with Landlords insisting on obtaining insurance against damage by pets).
• There will be a new Property Ombudsman.
• There will be a new Rental Property Portal for all Tenancies i.e., Landlords will have to register Tenancies through the Portal.
• There will be some form of “decent home standard” for the private sector (perhaps similar to the public sector currently).

The Bill may yet be amended further under a new Government. Prior to the General election:-

1. It had been announced that the abandonment of Section 21 Notice was delayed whilst improvements to the Court service are brought in, to include the digitalisation of the Court system, prioritising certain types of cases (e.g. severe anti-social behaviour of the tenants), an increase in Bailiff recruitment and also an increase in early legal advice being provided for tenants and/or signposting where they can obtain advice.
2. There is an intention to bring in a Ground (for possession) to deal with student lets because landlords letting to students were concerned about that they could not bring a Tenancy to an end each year as students moved on.
3. There is likely to be legislation to enable tenants to have a wider ability to have pets - with Landlords charging tenants for insurance as a result.
4. Rent Repayment Orders - superior landlords are potentially going to be liable for Rent Repayment Orders.

The Bill remains just that and might be amended further but Landlords should consider what they might do to prepare for the Bill becoming law in due course:-

• A review of all current Tenancy Agreements ensuring they are regularised and all documents are in order, evidence of documents being given to tenants available and copies retained, including Gas Safety Certificates, Energy Performance Certificates and How to Rent leaflets plus ensuring deposits are protected and Prescribed Information given to tenants.
• Outside of landlords evicting tenants there is going to be an increase in fines for landlords who do not have EPCs etc in place.
• If a landlord has any concerns or doubts about a tenant, it might be worthwhile considering evicting them now, using the Section 21 procedure, because it would appear inevitable that the Section 21 procedure will be gone at some point once the Bill becomes law.

There is likely to be a significant increase in tenants opposing rent increases and applying to the First Tier Tribunal to have them determined (following service of a s.13 Notice to increase Rent). Landlords should gather evidence now as to local rents and keep on top of that topic to enable them to increase rent when they wish to within the realms of the market rent. This is not anticipated to need expert evidence but evidence gleaned from websites, e.g. Zoopla etc.

If you're a landlord seeking further information and advice on the Renters Reform Bill, please contact us on 020 8290 0440.