Renter’s Reform Bill Breakdown

The long-awaited Renters’ Reform bill has had plenty of discussion over the last few months, over how it will aim to provide fairer living conditions and more rights for tenants in the UK. The main point of focus has been on the abolition of Section 21, which would mean landlords can only evict through Section 8 grounds. Though this is an important section of the bill, the Renters’ Reform covers a multitude of topics that will affect the way that landlords, tenants and letting agencies operate. Following our coverage of the Second Reading last week, we’re providing an in-depth update on what the whole bill entails so that you can keep informed on the specifics of this important topic.

Assured Tenancies and Fixed Term Contracts

Fixed-term tenancies will no longer be put in place under this bill, moving all tenants onto periodic tenancies that roll on from month to month. This will act in addition to the abolition of Section 21s or no-fault evictions which allow landlords to evict tenants without needing to provide specific reasoning, in the way you would with a Section 8.

Repossession

Three mandatory grounds are being introduced so that landlords can still retrieve their properties amidst the abolition of no-fault evictions. These grounds concern allowing a landlord to regain possession if they or any family of theirs wish to move into the property, or if the landlord wishes to sell the house. After using any of these grounds, the landlord will not be able to relist or let the property for three months each time. The notice period for the grounds is proposed at two months and they will be banned from using them until the first six months of a tenancy has passed. The Bill states that tenants who are in arrears of at least two months, multiple times in the space of three years, will be subject to an increase on the rent arrears ground, and this will go from four weeks to two weeks. The final part of this clause aims to crack down on antisocial behaviour and allows landlords to begin eviction proceedings immediately, rather than the current system where landlords have to demonstrate that the tenant’s behaviour is likely to cause a nuisance.

Rent Increase

This clause states that landlords can increase the rent annually, in line with market prices, but must provide two months’ notice of the change. However, this can be challenged by the tenant if they feel the proposed rent is above market rates, and they can do this through the First-tier Tribunal.

Pets

Under this bill, landlords will be unable to unreasonably withhold consent when tenants request a pet in the property, and tenants will be able to contest the decision if their request is declined. The Tenant Fees Act 2019 is also set to be amended so landlords can require insurance to cover any damage incurred by a pet in the home.

Landlord Financial Penalties and Offences

If landlords do not abide by their duties or misuse possession grounds, they can be subject to penalty under the Renter’s Reform Bill. A written statement of terms will be required also, that lays out the basic information of the tenancy and both parties’ responsibilities, which can incur a fine if it is not provided. In a bid to encourage compliance, local housing authorities will be able to impose financial penalties of up to £5000. Alternatively, where a landlord or former landlord is found guilty of an offence through the courts, they could face a penalty of up to £30,000, or even prosecution.

Accommodation for the Homeless

As Section 21 is due to be removed, the Bill will clarify that local authorities must continue to consider that someone is threatened with homelessness if they become homeless within 56 days. The reapplication duty will also be removed from homelessness legislation, and it will be the local authority’s responsibility to help secure accommodation for the applicant.

Unlawful Eviction

Financial penalties of up to £30,000 can be issued by local authorities, in cases where they are satisfied beyond unreasonable doubt that the landlord has unlawfully evicted or harassed an occupier of the property.

Landlord Redress Schemes

This part of the bill will enable the government to approve or designate a redress scheme for private residential tenants, as part of their commitment to create a new Ombudsman for the private rented sector. Future, current, and former landlords will also be required to register with the redress scheme, also. If a landlord fails to comply with this, then they could face fines, due to breaching legislation.

Private Sector and Private Landlords

There will be a database established, of existing landlords and properties which will be the basis of the future Privately Rented Property Portal Service. This will record when landlords are subject to banning orders, convicted of other offences, or penalised for breaching legislation. They will have 4 weeks to pay for registration to the platform, comply with the regulatory requirements and register information, such as certificates of HMO applications. Local authorities will have a role in running the database by validating or removing incorrect entries, though there has been discussion about automating the database. Landlords must register properties to the system before they are let or advertised, and penalties for breaching any of the requirements of the database could incur a fee totalling thousands of pounds.

Enforcement Authorities

The Bill states that the enforcement of the prohibitions mentioned will be the duty of the local housing authorities in England, and it will also be their duty to notify other local housing authorities when they plan to enforce action in their region.

Government Policy on Supported and Temporary Accommodation

The Renter’s Reform Bill will require the Secretary of State to publish a report on new National Supported Housing Standards, that will detail how these are to be abided against, developed and enforced.

Proposed to be Included in the Renter’s Reform Bill

Blanket Bans on Renting to Families with Children or those in Receipt of Benefits

There has been talk of the government's commitment to illegalise blanket bans on renting to families with children, and no DSS policies. There has been much consideration on how to implement these policies, and this is sure to be discussed in further detail as it passes through the Commons.

Decent Homes Standard

This is set to be applied to the Private Rented Sector to give renters homes that are a suitable and comfortable standard, due to reports of poor quality living conditions.

Selective Licencing Schemes

This scheme would oblige landlords to identify themselves to the council to secure a license. With this information, the council can directly contact private landlords when necessary and address any complaints swiftly and effectively.

Though there are some standout points of the Bill that have had plenty of discourse, we hope this breakdown can provide some further insight into the specifics of the Renter’s Reform, and the repercussions that you may not have been aware of. It is sure to be dissected and have sections removed or revised, but as it stands, this is what the bill entails and we all must prepare for the potential amendments to legislation. We hope to gather some more clarification on this as it reaches the committee stage towards the end of the year and will continue our coverage of this important topic as and when updates come through.

Maya