The Renters Reform Bill: Empowering Tenants and Supporting Responsible Landlords 18 May 2023
Renters Reform Bill
The UK government’s Renters Reform Bill was introduced to parliament today, 17th May 2023, and is set to revolutionise the private rented sector, bringing about significant changes to benefit both tenants and landlords. In this blog post, we will explore the key measures proposed by the bill and their potential impact on the rental landscape.
Abolishing 'no fault' evictions
Under the new bill, section 21 ‘no fault’ evictions will be abolished, providing tenants with greater peace of mind.
What is a Section 21?
A no-fault eviction, also referred to as a Section 21 eviction, is a provision in housing legislation that enables landlords to evict tenants without providing a specific reason. Once tenants receive a Section 21 notice, they have a period of two months before their landlord can initiate legal proceedings to obtain a court order for eviction.
Comprehensive possession grounds for landlords' rights
While the bill strengthens tenant security by abolishing Section 21 notices, it also recognises the legitimate needs of landlords. It introduces more comprehensive possession grounds under Section 8, allowing landlords to regain possession of their properties in specific circumstances. Whether it’s selling the property or accommodating close family members, landlords will have clear grounds for repossession, ensuring a fair balance between tenants’ rights and landlords’ needs.
Under the bill, a simpler tenancy structure will be introduced, where all assured tenancies become periodic.
What’s the difference between assured tenancies and periodic tenancies?
In England, the majority of tenancies in the private rented sector are Assured Shorthold Tenancies (ASTs). These tenancies can be categorised as either fixed-term or periodic.
A fixed-term tenancy involves a tenant being responsible for paying rent for a specified duration, typically six or 12 months. At the end of the fixed-term, the landlord and tenant can choose to renew the tenancy for another defined period, transition it into a rolling periodic contract, or serve notice to terminate the tenancy. During a fixed-term tenancy, landlords are not permitted to use section 21 for eviction. However, they can rely on other grounds for possession, and a break clause can be included in the agreement, enabling either party to give notice and end the tenancy early.
Periodic tenancies run for an indefinite period with the rent being paid on a periodic basis (e.g., monthly). Currently, under a periodic contract, if a tenant wishes to leave they must provide the required notice, typically one month, and remain liable for rent until the notice period expires. Landlord can use section 21 to terminate a tenancy by giving 2 months’ notice.
Under the Renters Reform Bill, all tenancies will be periodic. Landlords can no longer serve a section 21 for eviction and tenants must give two months’ notice if they wish to leave.
Doubling notice periods for rent increases
To address the challenges posed by the rising cost of living, the Renters’ Reform Bill aims to enhance tenant protection by implementing certain measures. Rent increases will be limited to once per year, ensuring greater stability for tenants. Furthermore, landlords will be required to provide a minimum notice period of two months for any changes in rent, doubling the existing requirement. Automatic rent increases will also be abolished.
Tenants will have the right to appeal against unjustifiable rent increases, and an independent tribunal will assess the actual market rent, ensuring fairness and transparency. Landlords, on the other hand, can still increase rents to the market price, promoting a balanced approach.
Pet-friendly policies and property standards
Recognising the importance of pets in tenants’ lives, the bill grants tenants the right to request a pet in the property. Landlords must consider these requests and can only refuse unreasonably. Additionally, landlords can require pet insurance to cover any potential damage, promoting responsible pet ownership.
Decent homes standard
The government will extend the Decent Homes Standard to the private rented sector, which currently states homes must be free from serious health and safety hazards and kept in a good state of repair so renters have clean, appropriate and useable facilities.
The bill will also make it illegal for landlords to discriminate against tenants on benefits or with children.
Private rented sector ombudsman for quicker dispute resolution
To resolve disputes more efficiently and cost-effectively, the bill proposes the establishment of a Private Rented Sector Ombudsman. Landlords will have access to a fair and impartial resolution process, avoiding lengthy court battles. This initiative aims to provide a faster and less adversarial alternative, benefiting both tenants and landlords.
Privately rented property Portal for improved compliance
The bill introduces a Privately Rented Property Portal, benefiting both landlords and tenants. The nature of the portal is yet to be agreed but seeks to provide landlords with a centralised platform to understand their legal obligations, ensuring compliance and instilling confidence. Simultaneously, tenants will gain access to better information, enabling them to make informed decisions when entering into a tenancy agreement. Local councils will also benefit from this portal, assisting them in targeting enforcement efforts where they are most needed.
When will the Renters Reform Bill become law?
The Renters’ Reform Bill must pass through multiple stages in parliament before coming into law. The exact timeframe for the bill to become law is uncertain, but it is expected to be in the latter part of this year or early next year. The government has assured that there will be a minimum of six months’ notice between the bill becoming law and the implementation of the new rules.
The Renters Reform Bill is set to provide tenants with greater security and empower them to challenge unfair practices. It also aims to ensure that responsible landlords can exercise their rights when faced with problematic tenants or changing circumstances. The bill aims to create a fairer, more balanced rental market that benefits everyone involved. As these reforms take shape, the future of the private rented sector in the UK looks promising, with improved living conditions and enhanced tenant-landlord relationships on the horizon.