Renters (Reform) Bill 2023 – What landlords and tenants need to know

Autumn Statement 2023 houses of parliament

The Renters (Reform) Bill is a proposed piece of legislation, introduced by the Government on 17 May 2023. The Bill recommends landmark rental reforms that – once enacted – will have a big impact on landlords and tenants throughout England.

Renters (Reform) Bill timeline

Originally proposed back in 2019 and fleshed out in the 2022 fairer private rented sector white paper, the Renters (Reform) Bill was introduced to parliament on 17 May 2023. It contains sweeping changes, aimed at improving the rental system for both the 11 million private renters and 2.3 million landlords in England.

Amendments were made to the Bill upon its second reading in parliament on October 23, 2023, including delaying plans to abolish Section 21 until changes are made to the courts process.

Passage of the Bill was rolled over to the next parliamentary year, which began with the King’s Speech on November 7, 2023. Subsequent amendments were made to the Bill (announced by the Government on 15 November, 2023) to be considered at Committee stage in the House of Commons.

A delay to the second reading of the Bill means it’s now unlikely to receive Royal Assent until spring 2024 at the earliest, and won’t come into force until six months later. We will continue to update this timeline as the Bill progresses through parliament.

Why is the Renters (Reform) Bill being introduced?

The Bill is designed to “bring in a better deal for renters”, including abolishing Section 21 ‘no fault’ evictions, as mentioned – meaning landlords can only evict on fault-based grounds and reasonable circumstances – and ending fixed-term tenancies. Tenants will also have the right to request a pet, which landlords cannot unreasonably refuse – though they can require tenants to take out pet insurance.

The Bill also recognises that “responsible landlords” face challenges of their own and aims to “celebrate the overwhelming majority of landlords who do a good job”. It’s designed to support these landlords, with more comprehensive possession grounds, giving landlords “peace of mind that they can repossess their property when a tenant is behaving badly, or their circumstances change”.

Housing Secretary, Michael Gove, says: “Our new laws introduced to Parliament today will support the vast majority of responsible landlords who provide quality homes to their tenants, while delivering our manifesto commitment to abolish Section 21 ‘no-fault’ evictions. This will ensure that everyone can live somewhere which is decent, safe and secure – a place they’re truly proud to call home.”

What are the proposed changes?

Almost all the recommended reforms in the Government’s original white paper have remained in the Bill, though some will be enacted at a later date. We recommend you read the Renters (Reform) Bill in more detail to gain a full understanding, but here’s a summary of key information for landlords and tenants:

Renters (Reform) Bill – Section 21 Evictions

The Renters (Reform) Bill proposes abolishing ‘no fault’ Section 21 evictions and delivering a simpler, more secure tenancy structure. This is designed to “provide tenants with greater security, supporting them to put down roots in their community, whilst ensuring landlords remain confident that they can regain their property where they need to”.

Once implemented, the Bill will end fixed-term tenancies and move to periodic tenancies, which do not have an end date. Once the Bill has been implemented, any new tenancies (that would previously have been Assured Tenancies or Assured Shorthold Tenancies) will be governed by the new system. Existing tenancies will move to the new system after the second implementation date, which will take place at least 12 months later.

Tenants will be required 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, helping to avoid unwanted moves.

In place of section 21, the Bill outlines proposals to strengthen section 8, allowing landlords to end a tenancy agreement early if they have a legal reason to do so. Where a landlord seeks possession using section 8 grounds, the process to end a tenancy will be similar to the current section 21 process. Landlords will need to serve notice to tenants on the prescribed form with the required notice period. If a tenant doesn’t leave, landlords will need to go to court and provide evidence that the ground applies.

Prior to the bill’s second reading, on 23 October 2023, a leaked letter was reported in the media, with Housing Secretary, Michael Gove, stating “we will not proceed with the abolition of Section 21 until reforms to the justice system are in place“. This stance was later confirmed by the Government, and could potentially cause delays to the bill being passed.

Renters (Reform) Bill – Grounds for gaining possession

The Renters (Reform) Bill will ensure the grounds for possession are “comprehensive, fair and efficient” and “cover all circumstances under which a landlord might reasonably expect possession”. Grounds can be either mandatory or discretionary. For mandatory grounds, judges must award possession when a landlord can evidence the ground is met. Discretionary grounds allow a judge to consider whether it is reasonable to award possession, even where the ground is met.

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. Landlords won’t be able to use grounds for moving in, selling or redevelopment for the first six months of the tenancy, meaning responsible renters will enjoy enhanced security and peace of mind after moving into a property.

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 of two months’ arrears at the time of serving notice and hearing. This will ensure that tenants have a reasonable opportunity to pay off arrears without losing their home.

A new mandatory Ombudsman for landlords and renters

The Bill will introduce a single government-approved Private Rented Sector Ombudsman to “provide fair, impartial, and binding resolution to many issues and prove quicker, cheaper, and less adversarial than the court system”. This will cover all private landlords who rent out property in England, regardless of whether they use an agent.

A landlord redress scheme would enable a former or current tenant to make a complaint against a landlord, which would then be independently investigated. This 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 Ombudsman has the power to “put things right for tenants”, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000.

The Bill outlines conditions on what the redress scheme should include and suggests that Ombudsman membership will be mandatory for landlords. However, more details are required regarding how and when the scheme will be set up.

Renters (Reform) Bill – Tenants’ right to keep pets

The bill will make it easier for tenants to keep pets in their homes. All tenants will have the right to request a pet in their property, which “the landlord must consider and cannot unreasonably refuse”.

The Government recognises that there are situations where it will always be reasonable for a landlord to refuse a request – including where their superior landlord prohibits pets. If a landlord denies the tenant’s request, they can challenge this decision. Where there is disagreement, a tenant can escalate their complaint to the Private Rented Sector Ombudsman (see below) or through the court, with a final decision based on the evidence provided by both parties.

To support this change, landlords will be able to require that tenants take out pet insurance. This will provide landlords with reassurance that any damage caused by a pet to their property will be covered, and that responsibility for preventing and resolving damage will reside with the tenant.

The Tenant Fees Act 2019 will be amended to include pet insurance as a permitted payment. The tenancy deposit can also be used for damages, although landlords should not attempt to recover costs twice for the same damage. In rare cases where the insurance and deposit do not cover the cost of the damage, a landlord can take the tenant to court to recoup additional costs.

Renters (Reform) Bill – 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. Rent increases will be through one mechanism, replacing the existing section 13 process under the Act, and landlords must give 2 months’ notice of any rent change.

The Government hopes these changes will “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 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.

Renters (Reform) Bill – New property portal for landlords and tenants

The government will introduce a new digital a new Property Portal to “help landlords understand their legal obligations and demonstrate compliance”. It will also provide better information for tenants, enabling them “to make informed decisions when entering into a tenancy agreement”.

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. Additionally, local councils will have access to better data to crack down on criminal landlords.

The Government also intends 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.

Further proposed reforms for the Private Rented Sector

The private rented sector white paper committed to further reforms to support both landlords and tenants, including a new Decent Homes Standard and outlawing blanket bans on families with children or receiving benefits. The Government remains “fully committed to implementing these reforms and will bring forward legislation at the earliest opportunity”.

A Decent Homes Standard for the PRS

The Decent Homes Standard is a regulatory standard in the Social Rented Sector. The Renters (Reform) Bill recommends this standard is applied to private rented homes, as part of the government’s Levelling Up mission to halve all non-decent homes by 2030. Although the Government stated they remain committed to this course of action, ongoing consultation is required before this will be introduced.

When this standard is introduced, private rental properties will need to 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 hopes 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”.

Local Authorities will be given new enforcement powers to require landlords to make properties decent, with fines up to £30,000 or a banning order in the worst cases. Tenants will also be able to claim up to 24 months rent back through rent repayment orders – up from 12 previously.

Councils will also be given stronger powers to investigate landlords who rent substandard homes, providing them with the tools they need to identify and take enforcement action against the criminal minority and help drive them out of the sector.

Renters (Reform) Bill – Blanket bans on benefits

The Renters (Reform) Bill proposes outlawing ‘blanket bans’ on 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 recommending taking this court ruling a step further, by making it illegal to have blanket bans on renting to those in receipt of benefits or who have children – ensuring families aren’t discriminated against when looking for a home to rent and protecting the most vulnerable. Landlords will still be able to carry out referencing checks to make sure a tenancy is affordable and have the final say on who they let their property to. This will apply to England and Wales and will be extended to Scotland via a further amendment at Report Stage.

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 – When will the changes be implemented?

Once the Renters (Reform) Bill has received further parliamentary readings and, ultimately, been given Royal Assent, the Government will implement the Bill in two stages, “ensuring all stakeholders have sufficient notice to implement the necessary changes”.

The Government will provide at least 6 months’ notice of the first implementation date, after which all new tenancies will be periodic and governed by the new rules, including the changes to renting with pets. The date of this will be dependent on when the Bill has received Royal Assent.

To avoid a two-tier rental sector and to make sure landlords and tenants are clear on their rights, all existing tenancies will transition to a new system on the second implementation date. We will allow at least 12 months between the first and second date.

Time is now tight for the Renters (Reform) Bill to receive Royal Assent before parliament is dissolved for the next General Election, so a predicted date for its implementation is unclear. We will continue to update this article as the Bill progresses.

What do you think of the Renters (Reform) Bill?

What are your thoughts on the Renters (Reform) Bill? How will this impact you as a landlord or tenant? Share your take in the comments below.

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