Earlier this week the Government introduced the long awaited Renters (Reform) Bill.  The Bill sets out “once-in-a-generation” reforms to the private rented sector in a bid to ensure “safer, fairer and higher quality homes” for renters. This article looks at what the proposed reforms mean for landlords and tenants. 

What is the Renters Reform Bill? 

A Bill is a proposal for a new law or a proposal to change an existing law, presented for debate before Parliament. The Renters Reform Bill is being viewed as the biggest shake up of the private rented sector in 30 years. Housing charity Shelter calls it a ‘game changer’.

The main proposals in the Bill are:  

Abolishing Section 21 notices, also known as ‘no fault’ evictions 

The banning of s.21 ‘no fault’ evictions are a driving force for the Government with this Bill. Section 21 of the Housing Act 1988 allows landlords to evict tenants without providing a reason. This leaves renters with “a precarious lack of security”. Upon the Bill being passed in to law, tenants will still be allowed to end a fixed term tenancy for no reason but landlords will need to rely on one of the other rights to evict. 

Interestingly, no-fault evictions in Scotland have been outlawed since December 2017.

Expand how and when landlords use section 8 notices

As a balancing measure, the Bill proposes to expand landlords’ rights under Section 8 of the Housing Act 1988. Section 8 requires a landlord to give a tenant notice that they are seeking possession. The notice is commonly referred to as a notice seeking possession (NSP) or a section 8 notice. Under the Bill, the existing grounds for evicting a tenant will be strengthened and additional grounds for possession will be added. It also aims to improve the court process for landlords. Further information on section 8 is provided below under the heading ‘How will landlords evict tenants following the Renters Reform Bill?‘

Abolish fixed term tenancies

Upon the Bill becoming law, all tenancies would be periodic from their first day. This means tenants would be able to end their tenancy at any stage by giving two months’ notice to their landlord. Further, notice periods of more than 2 months would be banned.

Introduce an ombudsman and create a register of landlords

Under the Bill’s proposals, all landlords will be required to sign up to a new Private Renters Ombudsman, as well as a new online property portal. The Government hopes that this will help resolve disputes away from the courts and help landlords understand their legal obligations and demonstrate compliance. From a tenant’s point of view, it aims to provide better information so that they can make informed decisions when entering into a tenancy agreement. It will also support local councils – helping them target enforcement activity where it is needed most

Make it illegal to refuse to rent properties to people who receive benefits or have children 

Similarly, landlords will not be allowed to unreasonably refuse a tenant’s request to keep a pet in the property.

Double the notice periods for rent increases  

Under the proposals, a notice period of 2 months will be required in respect of any rent increase. Further, rent reviews will be limited to one a year.

How will Landlords evict tenants following the Renters Reform Bill?  

Following the Bill being passed in to law, landlords will need to rely on Section 8 notices in order to evict renters. Section 8 requires landlords to identify a specific ground for evicting the tenant. The grounds include damage to property, failure to pay rent or anti-social behaviour.  

To proceed with a section 8 notice, a landlord must complete the following: –  

i) determine the specific grounds upon which the tenant can be evicted,  

ii) prepare a written notice which states the grounds and includes specific details of any breach to a tenancy agreement, 

iii) serve the notice on the tenant, allowing 14 days (dependant on the grounds) for the tenant to respond and rectify any issues highlighted within the notice,  

iv) where the tenant does not rectify any breach of tenancy agreement or grounds state, initiate Court proceedings by filing a possession claim. 

A successful landlord will be granted a possession order which sets out the date by which the tenant must leave the property. Where a tenant refuses to leave in accordance with the possession order, you will need further legal assistance regarding enforcement of the order.  

When will the Renters Reform Bill become law?

The Bill was introduced to Parliament and given its First Reading on Wednesday 17 May 2023. This stage is formal and takes place without any debate. MPs will now have the opportunity to consider and debate the Bill at a Second Reading, though at the time of writing, no date has been announced for a Second Reading. The Bill will then be voted on.

The Bill will have to pass through both the House of Commons and the House of Lords before it is made an Act of Parliament (an Act of Parliament creates a new law or changes an existing law). We therefore do not anticipate the provisions of the Bill taking effect until 2024 at the earliest.

Consequences of the Renters Reform Bill 

Positives 

The overall aim of the Bill is to provide more protection for tenants, which it does through stricter regulations on eviction and the provision of an ombudsman scheme to enforce renters’ rights.  

Section 21 notices are open to abuse and are cited as being one of the leading causes of homelessness in the UK. Outlawing s.21 notices could potentially reduce homelessness whilst also providing greater work and educational stability for working parents and children in the UK.  

Negative 

The Bill has been subject to mixed reviews from MPs and property landlord groups. There is a serious concern that the Bill could lead to private landlords quitting long-term lettings. This would lead to less homes being available to rent, creating a higher demand for rented accommodation and thereby pushing rent up.  

Landlords with student houses have also expressed particular concern over the proposals. Normally, student properties are let for a fixed term based on the academic year. If a student tenant is able to end a tenancy mid way through an academic year by giving 2 months notice, student landlords may struggle to get the property rented out again until the start of the next academic year.

How we can help   

We understand the stress involved in housing disputes, especially where there is the potential of eviction. We have a wealth of experience in acting for both landlords and tenants. We can help you identify the best course of action and advise you through the process of eviction, including complying with the requirements of section 8 and section 21 notices. By taking legal advice we can help you achieve a quick and efficient resolution that works for you.  

 

This article does not constitute legal advice. If you have any queries about the above or if you are a commercial landlord or tenant and would like assistance with section 8 or section 21 notices, please contact us on 0113 266 0735 or at info@bailoransolicitors.com. Get in touch to speak to one of our legal experts.