29 June 2023 by

Renters (Reform) Bill

The Government introduced the Renters (Reform) Bill to Parliament on 17 May 2023 and it follows the White Paper, “A Fairer Private Rented Sector”, released in June 2022. You can find our article on the White Paper here.

The Bill proposes significant changes in the private residential rented sector, with the biggest proposal being the abolition of Section 21 “no fault” evictions.

We set out the key points of the Bill below.

Amended grounds for possession

Under the new regime, the Section 21 route will be abolished, and it is intended that the grounds under Section 8 of the Housing Act 1988 grounds will be tweaked with new grounds added.

  1. Landlord or close family member moving in – Ground 1 is amended to allow a landlord to recover possession to allow them or a close family member to move into the property as their main residence. There is now no longer a need to serve notice at the beginning of the tenancy in order for this ground to be relied upon. The tenancy will need to run for 6 months before this ground can be relied upon.
  2. Landlords who wish to sell their property – Ground 1A has been introduced to allow landlords to recover possession of their property if they are intending to sell. Again, the tenancy will need to run for 6 months before this ground can be relied upon.
  3. Repeated serious rent arrears – Ground 8A has been introduced to allow a landlord to evict a tenant where the tenant has been in at least two months’ rent arrears three times within the previous three years. The Court must evict the tenant regardless of any arrears being cleared at the date of the hearing.
  4. Anti-Social behaviour – Ground 14 has been amended so that it includes ‘behaviours capable of causing a nuisance or annoyance’ rather than ‘likely to cause a nuisance or annoyance’, thereby arguably lowering the threshold and making it easier to evict tenants for anti-social behavior. However, this ground is still at the discretion of the Court and the Court will still consider reasonableness.
  5. Increase in notice period – The notice period for the existing rent arrears eviction ground will be increased from 2 to 4 weeks.

ASTs and fixed terms to be abolished

Assured short hold tenancies, which have been the standard for residential tenancies, will be abolished and the proposal is that future tenancies will be periodic tenancies.

This means a tenancy will now only end if the landlord evicts the tenant using one of the grounds in Section 8 of the Housing Act 1988 or if the tenant exercises a break clause in the tenancy.

Rent increases

Landlords will be limited to one rent increase per year, with rent review clauses no longer permitted in tenancy agreements. The minimum notice period a landlord must give to a tenant when increasing the rent is 2 months.

The tenant may accept the increase or dispute it at the Tribunal. The Tribunal will then determine the open market rent of the property.

Pets

A tenant will be able to request permission to keep a pet, which cannot be unreasonably refused by the landlord. However, the landlord can require the tenant to take out pet insurance, to cover any damage caused by the pet, or alternatively pay the landlord’s costs of taking this out.

Financial penalties

A number of financial penalties have been introduced:

  1. If a landlord relies on Ground 1 (as set out above) and lets the property within a three month period following possession, they could be fined up to £5,000 by the local authority or prosecuted.
  2. A landlord will now be required to provide the tenant with a written statement of terms, which will includes terms of the tenancy and any other further information prescribed by regulations. A landlord may be fined up to £5,000 by the local authority if they fail to comply with this requirement.

Comment

The intention of the Bill is to remove “no fault” evictions. However, this is not exactly what it achieves. Under the new grounds, a landlord will be able to evict tenants if they either wish to sell the property or move a close family member into the property – both of these grounds are certainly no fault of a tenant.

There are likely to be many changes to the Bill whilst it moves through Parliament. What is clear is that, whilst Section 8 has been amended, it will become more difficult for private residential landlords to recover possession of their property and the Courts are likely to be stretched with possession hearings.

Watch this space for further updates and, if you have any questions, please don’t hesitate to contact our Real Estate Disputes team.

16 June 2023 by Pamela Jarvis

Giving to charities to become less tax efficient

The Spring Finance Bill 2023 includes a new measure which will restrict charitable relief to UK charities only.  This means […]

22 June 2023 by Melanie Carroll

Innovative Lending and Mortgages – What’s new?

Mortgages have been in the press recently.  The main focus has been the increase in interest rates, causing a headache […]

Signup To Our Weekly e-News

"*" indicates required fields

We’ll never share your details with any third party in line with our privacy policy.