Renters (Reform) Bill – a major shakeup of the private rental sector

The Government has yesterday introduced to Parliament the long-promised Renters (Reform) Bill, which looks to introduce the biggest change to private rental sector legislation for decades.

Many of these changes were signposted in the government’s White Paper in June last year. While we are still considering the full text of the bill and its implications, the headlines are as follows:

- The abolition of Assured Shorthold Tenancies in favour of Assured Tenancies, which will have a rental period not exceeding one month

- The abolition of fixed term tenancies

- The abolition of the Section 21 eviction procedure

- New and amended grounds for serving a Section 8 Notice, including:

• 2 months’ notice if the landlord, or a member of their family, wishes to move into the property

  The landlord cannot let the property for 3 months from the expiry of the notice

• 2 months’ notice where the landlord has an intention to sell the property

The landlord cannot let the property for 3 months from the expiry of the notice

• 4 weeks’ notice where the tenant is two months in arrears at the date of the notice and the date of a possession hearing
• 4 weeks’ notice where the tenant has been in two months’ arrears on three separate occasions
• A ground to bring possession proceedings immediately after service of a notice where the tenant’s conduct is “capable” of causing a nuisance

- New obligations and prohibitions on landlords, including:

• A duty to give a “statement of terms” to the tenant before they move in
• A ban on serving a Notice to Quit (as opposed to a Section 8 Notice); a Section 8 Notice which is not in the prescribed form; and using a Section 8 ground which the landlord was not entitled to rely on (including where the landlord is reckless as to whether the ground applies)
• There will be financial and criminal penalties for breaching the above

- A ban of automatic rent review clauses

- Section 13 procedure for increasing the rent is retained, but with some amendments, including increasing the period of a Section 13 Notice from 4 weeks to 2 months

- A right for tenants to bring a Tribunal application within the first 6 months of a tenancy to challenge the rent

- A right for tenants to keep a pet, which the landlord cannot unreasonably refuse

- A requirement that the Court may not grant a possession order in relation to an Assured Tenancy unless the deposit has been protected and the deposit prescribed information given

- A ‘landlord’s redress scheme’ to deal with tenant complaints; a landlord database; and housing standards legislation (all of which will be implemented by future regulations)

The headlines in the press primarily relate to the banning of Section 21 “no-fault evictions”. However, the strengthening of the Section 8 Grounds will cover the large majority of situations in which a landlord would reasonably serve a Section 21 Notice.

There will be a number of additional formalities that landlords will need to comply with, and landlords will also need to tread carefully to avoid the various new offences and financial penalties introduced by the proposed legislation.

The legislation will be subject to revisions before it is finally enacted and it is unclear whether the Government will have the time to pass the legislation before the anticipated general election next year.

How we can help

We at Irwin Mitchell will be carefully considering the legislation and will produce more in-depth articles in the coming week to consider the implications for both landlords and tenants.