Renters (Reform) Bill – June 2023 update
20 Jun 2023
The recent introduction of the Renters (Reform) Bill in Parliament, has sparked considerable discussions among landlords and agents. It is important to note that this Bill is not yet law and is currently undergoing the legislative process in Parliament. As it progresses, we anticipate several changes being made before its potential implementation, which is likely to occur no earlier than 2024.
Ending No-Fault Evictions:
The proposed Bill aims to put an end to no-fault evictions, meaning landlords will only be able to serve notice on tenants when there are legitimate reasons to do so. The government intends to expand the grounds for eviction under section 8, providing landlords with additional justifications for eviction, such as selling the property or personal use. However, these grounds cannot be used within the first six months of the tenancy. Moreover, a new proposed ground for repeated serious arrears is being considered, which would allow mandatory possession when a tenant has been in at least two months' arrears three times within the previous three years. The notice period for existing rent arrears eviction grounds is also proposed to increase to four weeks. It is crucial to note that these changes are not yet law, and landlords can continue to serve section 21 notices on tenants for now.
End of Fixed-Term Tenancies:
The Bill also includes the intention to abolish fixed-term tenancies. Instead, all tenancy agreements will become periodic, rolling on a month-by-month basis without an end date. This means that either the tenant or landlord can terminate the tenancy by providing notice. In theory, tenants will be able to give two months' notice to vacate the property at any time, even shortly after the tenancy commences.
Removal of Rent Review Clauses:
Rent review clauses will no longer be permitted in tenancy agreements. Landlords will only be able to propose a rent increase once a year, providing a 2-month notice period to the tenant. If the tenant disagrees with the rent increase, they will have the option to challenge it through the new Ombudsman Scheme established under the proposed Bill.
Right for Tenants to Request a Pet:
The Bill grants tenants the right to request permission to have pets, and landlords will be obligated to reasonably consider and respond to such requests within 42 days. Landlords can protect themselves by requiring tenants to obtain pet insurance covering any potential property damage. This provision will be included as a permitted payment under the extended Tenant Fees Act 2019.
The Bill suggests that private landlords in England may be required to join a government-approved Ombudsman scheme. This would introduce a landlord redress scheme, allowing former or current tenants to file complaints against landlords, which will then be independently investigated by the Ombudsman. The decisions made by the Ombudsman would be binding on landlords.
Landlords' Digital Property Portal:
In addition to the proposed Ombudsman scheme, a digital property portal is also being considered. This portal would assist landlords in understanding and demonstrating compliance with their legal obligations. Its purpose is to protect both tenants and landlords, enabling tenants to verify their landlord's compliance and allowing landlords to showcase their regulatory adherence.
The Renters (Reform) Bill is currently undergoing debate in Parliament, and many aspects of the proposed legislation, including the grounds for eviction and its impact on student accommodation, remain subject to further discussion. We are committed to keeping you informed about the progress of the Bill and its potential implications. It is evident that these proposed changes aim to bring significant transformations to the private rental sector, although not all of them may be welcomed by the industry.
Please stay tuned for further updates as the Bill progresses through Parliament.