The Renters Reform Bill was announced on Thursday 16 June, detailing big changes for landlords and tenants in the UK.
The bill is part of the government’s latest white paper – A Fairer Private Rented Sector. The paper summarises their commitment to “delivering a fairer, more secure, and higher quality Private Rented Sector” and is said to be the “biggest shake-up of the rented sector for 30 years”.
Originally proposed back in 2019, the Renters Reform Bill was mentioned in the recent Queen’s Speech and the government’s Levelling Up White Paper – including plans to “reset the relationship between landlords and tenants” by abolishing Section 21 under the Renters Reform Bill and “end[ing] the unfair situation where renters can be kicked out of their homes for no reason”.
The white paper includes many “robust and comprehensive changes to create a Private Rented Sector that meets the needs of the diverse tenants and landlords who live and work within it”.
- Abolishing Section 21
- New mandatory ombudsman
- Outlawing blanket bans on benefits
- Tenant pet requests and pet insurance
- Changes to rent increases and advance payments
- New Decent Homes Standard
- Reforming eviction grounds for possession
- New property portal for landlords and tenants
Renters Reform Bill – Section 21 Evictions
The Renters Reform Bill will remove ‘no fault’ Section 21 evictions to “provide greater security for tenants while retaining the important flexibility that privately rented accommodation offers”. Currently, a Section 21 notice can be served to tenants on a rolling periodic tenancy or at the end of a fixed-term tenancy to evict with no stated ‘reason’.
Instead, the Renters Reform Bill will abolish Section 21 evictions and simplify tenancy structures. To do this, the government will move all tenants who would previously have had an Assured Tenancy or Assured Shorthold Tenancy onto a single system of periodic tenancies.
Tenants will need to provide two months’ notice when leaving a tenancy, ensuring landlords recoup the costs of finding a tenant and avoid lengthy void periods. Landlords will only be able to evict a tenant in reasonable circumstances, which will be defined in law, supporting tenants with fewer unwanted moves.
Student properties will be included in this reform in order to give students the “same opportunity to live in a secure home and challenge poor standards as others in the PRS”. Purpose-built student accommodation will be exempt.
The government has said they will implement the system in two stages, allowing time for a smooth transition and giving landlords, tenants and agents time to adjust. The white paper has no date for the first stage, but it states that at least six months’ notice will be provided, and there will be twelve months between the two stages.
A new mandatory Ombudsman for landlords and renters
The bill will introduce a single government-approved Ombudsman covering all private landlords who rent out property in England, regardless of whether they use an agent.
The Ombudsman will allow private renters and landlords to settle disputes quickly without going to court. This method will be cheaper than the court and provide landlords and tenants with a “fair, impartial and binding resolution to many issues”.
The new Ombudsman will provide a streamlined service for tenants and landlords, and hopes to tackle the root cause of problems, address systemic issues, provide feedback and education, and offer support for vulnerable people.
Ombudsman membership will be mandatory for landlords. Tenants can put forward complaints and the Ombudsman has the power to “put things right”, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000.
Renters Reform Bill – Blanket bans on benefits
The Renters Reform Bill will outlaw ‘blanket bans’ to families with children or people receiving benefits. ‘No DSS‘ or ‘No benefits’ policies – in which letting agents or landlords would refuse to accept applicants receiving benefits – were ruled as unlawful discrimination by the court.
The court ruled that these blanket bans go against the Equality Act and discriminate against women, disabled and vulnerable people – making it more difficult for them to rent.
The Bill is taking this court ruling a step further, by making it illegal to have blanket bans on renting to families with children or those in receipt of benefits. The government states they will enforce this by:
- Supporting landlords to make informed decisions on individual circumstances rather than relying on blanket bans
- Working with the insurance industry to address landlord and agent misconceptions that it is difficult to arrange insurance for properties where tenants are in receipt of benefits
- Exploring improvements to welfare support information for both tenants and landlords and helping to ensure that those who are unable to manage their rent payments can arrange direct payments of housing costs to their landlord through their Universal Credit (Managed Payments)
- Boosting awareness of the range of local services available to help people who are living on a low wage or are receiving benefits
Renters Reform Bill – Tenants’ right to keep pets
The bill will make it easier for tenants to have pets in their homes. All tenants will have the right to request a pet in their house, which the landlord must consider and cannot unreasonably refuse.
If a landlord denies the tenant’s request, they can challenge this decision, but there are currently no details on how this will be enforced.
The Tenant Fees Act 2019 will be amended to include pet insurance as a permitted payment. This means landlords will be able to require tenants to have pet insurance so that any damage to their property is covered.
Dogs and Domestic Animals Accommodation Protection Bill
Last year, the Dogs and Domesticated Animals Accommodation Protection Bill was put forward to parliament to help responsible pet owners find suitable rental properties. The bill has not been progressed, but included plans to ensure all pet owners have a certificate of responsible animal guardianship.
The idea is that tenants can’t have a dog or domestic animal in their rental property unless they hold a responsible animal guardianship certificate and can care for the animal. If living in the rental accommodation puts the animal at risk, or causes danger or nuisance to people nearby, they will not be allowed.
Whilst this bill has not been approved by parliament, the proposed right to request pets in the Renters Reform Bill is a step in the same direction.
Renters Reform Bill – Changes to rent increases and rent in advance
The Renters Reform Bill will end the use of rent review clauses and only allow rents to increase once per year. Landlords must give 2 months’ notice of any rent change.
These changes hope to “prevent tenants being locked into automatic rent increases that are vague or may not reflect changes in the market price”.
If a tenant pays multiple months’ rent in advance, landlords will be required to repay any upfront rent if a tenancy ends earlier than the period that tenants have paid for.
The Renters Reform Bill will also limit the amount of rent that landlords can ask for in advance. This power will be used if the practice of charging rent in advance becomes widespread or disproportionate.
A Decent Homes Standard for the PRS
The Decent Homes Standard is a regulatory standard in the Social Rented Sector, but does not currently apply to the PRS. The white paper states that private rented homes will be required to meet the Decent Homes Standard, as part of the government’s Levelling Up mission to halve all non-decent homes by 2030. Under this new standard, private rental properties must have:
- No serious health and safety hazards, such as risks of fall, fire, or carbon monoxide poisoning
- Adequate kitchen and bathroom facilities
- Decent noise insulation
- Clean, appropriate and usable facilities
- Adequate heating and be warm and dry
The Department of Levelling Up, Housing and Local Communities hope that the Decent Homes Standard will “raise standards and make sure that all landlords manage their properties effectively, rather than waiting for a renter to complain or a local council to take enforcement action”.
The Housing Health and Safety Rating System (HHSRS) is also being reviewed and will conclude in autumn 2022.
Renters Reform Bill – Eviction and gaining possession
The Renters Reform Bill will improve the grounds for possession so they are “comprehensive, fair and efficient”.
Recognising that landlords’ circumstances change, the government is introducing new mandatory grounds for eviction for landlords who want to sell their property and/or move (themselves or family) into the rental property. This cannot be used for the first six months of the tenancy (similar to how Section 21 now works).
New mandatory grounds for repeated serious arrears will also be introduced. 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.
Eviction will be 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 the hearing. This supports landlords facing undue burdens, while ensuring tenants with longstanding tenancies are not evicted due to one-off financial shocks that occur years apart.
The notice period for the existing rent arrears eviction grounds will increase to four weeks and will retain the mandatory threshold at two months’ arrears at the time of serving notice and hearing. This will make sure that tenants have a reasonable opportunity to pay off arrears without losing their home.
Renters Reform Bill – New property portal for landlords and tenants
The government will introduce a new Property Portal to make sure that tenants, landlords and local councils can access the information they need.
The portal will provide a single ‘front door’ for landlords to understand their responsibilities, tenants will be able to access information about their landlord’s compliance, and local councils will have access to better data to crack down on criminal landlords.
They also intend to incorporate some of the functionality of the Database of Rogue Landlords, mandating the entry of all eligible landlord offences and making them publicly visible.
What do you think of the Renters Reform Bill?
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