The Secretary of State for Levelling Up, Housing and Communities has told MPs that the Renters Reform Bill WILL be introduced in this parliamentary session, i.e., by May 2023. The Act is due to make major changes to the rental market, many to the benefit of tenants, and it will be important for both sides to understand their new rights and responsibilities. With this in mind, we have set out some of the key points that you should be aware of:
1) Abolishing Section 21 evictions*
*There have been rumours that this proposal may be dropped, but at the current time, it is still part of the government’s proposed changes.
Section 21 evictions are commonly referred to as “no-fault evictions”, and their removal will mean that landlords will only be able to evict tenants in certain circumstances, such as where there is antisocial behaviour or a certain level or frequency of rent arrears.
In addition to the “fault-based” grounds for eviction which are already available to landlords, the bill proposes to add a right for landlords to evict tenants if the landlord wishes to sell the property or if they (or their immediate family) wish to move into the property themselves.
This change is intended to give tenants more stability, but some landlords are concerned that it will make it harder for them to evict problematic tenants.
2) Abolishing fixed-term tenancies
Tenants will no longer be committed to a particular rental term and will be allowed to end their tenancy on 2 months’ notice. Crucially, this is eventually going to apply to both new tenancies and existing tenancies (although it is expected to cover new tenancies first, with existing tenancies brought in line at a later date).
3) Limiting rent increases
Landlords will be able to increase the rent no more than once a year, and only on giving at least 2 months’ notice.
Where the tenant considers that the level of rent increase is disproportionate, they will have the right to challenge the increase in the First Tier Tribunal.
4) Extending the “Decent Homes Standard (DHS)”
The DHS has applied to the social rented sector for 20 years and is now proposed to be extended to the private rented sector (with a few modifications).
Broadly speaking, this will oblige landlords to ensure that their rental property is in a reasonable state of repair and meets certain minimum standards in terms of facilities, comfort and services.
All landlords are already covered by laws requiring them to ensure their property is fit for human habitation.
A new government-appointed “Private Renters Ombudsman” will be introduced, and it will be mandatory for all landlords to be members of this scheme.
The Ombudsman will have powers to consider complaints against landlords and, if appropriate, order them to take remedial action or to pay compensation to the tenant, up to the sum of £25,000.
6) No Department for Social Security (DSS), “no children” and “no pets”
It will be illegal for landlords to have a blanket ban on renting to tenants with children or to those in receipt of benefits.
Landlords will also not be allowed to “unreasonably” refuse a request to have pets at the property. They can, however, insist that their tenant take out pet insurance to cover any potential damage.
7) A new Property Portal
There will be a new digital Property Portal to help landlords understand their legal obligations and to show that they are complying with them.
All landlords will be required to register their property on the portal, which will make it easier for local authorities to take enforcement action against those landlords who are not complying with their obligations.
Will it affect me?
Purpose-built student accommodation is expected to be exempt from the changes, but private student accommodation will not.
If you are a landlord, the answer is almost certainly yes – we strongly recommend that you familiarise yourself with the potential changes so you can prepare for them.
If you are concerned about the changes, it is a good idea to seek legal support. Our specialist team can help guide you in the right direction, for further details, email Christina.email@example.com