RENTERS REFORM BILL
24 Jul 2023
Last month, the Renters (Reform) Bill had its first reading in Parliament. It is due to be the most significant change to the rental sector since the 1988 Housing Act.
In this article, I have summarised some of the major changes proposed by the Government. Please see the Nearly Legal blog, and particularly Giles Peaker’s two blogposts on the Bill, for more information.
The key changes
- There will no longer be assured shorthold tenancies or fixed term assured tenancies. All tenancies (with some exceptions, like Rent Act and secure tenancies), will become periodic assured tenancies with a period of not more than one month.
- 21 “no fault” evictions are to be abolished.
- Landlords will only be able to increase rent every 12 months, and any increases will require two months’ notice (amending s.13 Housing Act 1988). Tenants can either agree to the change or apply to the Tribunal for a determination. Any rent increase clauses within tenancy agreements will no longer have effect. This provision does not apply to assured social tenancies.
- An implied term will be introduced that the tenant has a right to request to keep a pet and that the landlord cannot unreasonably refuse such a request. The landlord can require the tenant to take out insurance against damage from the pet, or require the tenant to pay the cost of the landlord taking out insurance. It will not be unreasonable for a landlord to refuse permission if their superior landlord had refused consent, or if the landlord’s own lease forbids pets.
- Landlords will be required to give tenants a statement of terms before the start of the tenancy.
- It appears that the 30-day time limit for protection of the deposit and provision of the prescribed information will be disapplied. If the Bill is passed in its current form, the court will be able to make a possession order only if “the tenancy deposit is being held in accordance with an authorised scheme”; or if “such requirements of the scheme as fell to be complied with by the landlord on receiving the tenancy deposit have been complied with (whether or not within the period mentioned by section 213(3)) in relation to the tenancy deposit)”; or if “the requirements of section 213(5) and (6)(a) have been complied with”. As before, the requirement regarding the deposit does not apply if the deposit has been returned in full. The provisions relating to deposits for replacement tenancies will be removed as they will become irrelevant.
- Tenants’ notices to quit will have a period of two months if not specifically agreed with the landlord. They can be given at any time and may be withdrawn by written agreement with the landlord.
- As an alternative to prosecutions for unlawful eviction under s.1 Protection from Eviction Act 1977, civil penalties of up to £30,000 will be introduced.
- A redress scheme and private rented sector database will be set up. Registration will be compulsory for all private landlords. There will be civil penalties for non-compliance. The redress scheme will deliver independent investigations of tenants’ complaints.
- The most significant proposed changes to the grounds for possession are as follows:
| Ground | Type of change | Notes |
|---|---|---|
| 1 | Amended | The property is required for the landlord or a family member to live in as their principle or only home. Family members include the landlord’s: parent, grandparent, sibling, child, grandchild (or the child or grandchild of their spouse).
Notice may only be served after six months. If the tenant leaves after notice is served under this ground, the landlord cannot rent the property out for three months. |
| 1A | New | The landlord intends to sell.
Notice may only be served after six months, unless subject to a compulsory purchase order. This ground is not to be used by social landlords. If the tenant leaves after notice is served under this ground, the landlord cannot rent the property out for three months |
| 1B | New | The (social) landlord intends to sell. Used for rent-to-buy agreements.
If the tenant leaves after notice is served under this ground, the landlord cannot rent the property out for three months. |
| 2 | Amended | The mortgagee requires possession to sell.
Removes requirement that the mortgage was entered into before the beginning of the tenancy. |
| 2ZA | New | The landlord has a tenancy from a superior landlord which has had a valid notice served, or the superior tenancy will end within 12 months.
This only applies to the following: registered providers of social housing, supported accommodation providers, agricultural tenancies, or where the landlord company is 50% owned by a local authority. |
| 2ZB | New | The landlord became the landlord under s.18 Housing Act 1988 and the previous landlord was a registered provider of social housing (or one of the other types of landlords/tenancies in 2ZA above).
This ground may only be used during the first six months of the new landlord becoming landlord. |
| 3 | Removed | |
| 4 | Amended | For accommodation previously let by an educational establishment to a student. |
| 5A | New | Employment related accommodation for agricultural workers. |
| 5B | New | Employment related accommodation for employees of registered providers of social housing.
May be used where the tenant no longer fulfils the work-related requirements and the property is needed for another employee. |
| 5C | New (replaces old ground 16). | The landlord is an employer letting to their employee for work-related purposes and the employment and/or purpose has ceased.
This ground is now mandatory. |
| 5E | New | The landlord requires possession to let the property as supported accommodation, where: the dwelling was held for that purpose and the tenant did not enter the tenancy for the purpose of receiving care, support, or supervision. |
| 5F | New | For supported accommodation, if one of the following applies: time-limited support services or funding for those services has ceased; the tenant does not need support services or adaptations; or the property is physically unsuitable for rent. |
| 5G | New | The grant of the tenancy was pursuant to the local authority’s s.193 Housing Act 1996 duty and the local authority has informed the landlord that the accommodation is no longer required under that duty and the notice expires no more than 12 months after the notification.
This is a mandatory ground. |
| 6A | New |
Compliance with enforcement action.
May be used where the landlord would be in breach of an enforcement notice or has inadequate licensing or has been refused licensing, for example regarding overcrowding. This is a mandatory ground. |
| 8 | Amended | With regard to the amount of arrears, the following caveat is to be introduced: if the tenant is entitled to receive an amount for housing as part of an award of Universal Credit under s.15 Welfare Reform Act 2012, any amount that was unpaid only because the tenant had not yet received the payment of that award is to be ignored. |
| 8A | New |
May be used if rent arrears of more than two months or eight weeks have been unpaid on at least three separate days in a period of three years before the service of a notice relying on this ground.
Separate days means that arrears have gone below two months or eight weeks’ rent between each “day” relied on. The same UC caveat as ground 8 applies. This is a mandatory ground. |
| 14 | Amended | This amendment changes “likely to cause nuisance or annoyance” to “capable of causing nuisance or annoyance”. |
| 18 | New |
The tenancy is of supported accommodation and the tenant has unreasonably refused to co-operate with the person providing support services.
This is a discretionary ground. |
- The notice periods for possession will be:
| Ground specified in notice |
Period (beginning with the date of service of the notice) |
|---|---|
| 1A, 1B, 2, 2ZA, 2ZB, 5, 5A, 5B, 5C, 5D, 6, 6A, 7, 9. |
Two months |
| 5E, 5F, 5G, 8, 8A, 10, 11, 18. |
Four weeks |
| 4, 7B, 12, 13, 14ZA, 15, 17 |
Two weeks |
- For grounds 7A and 14, the court will not be able to make an order for possession to take effect within 14 days of service of the notice.
The Act, if passed, will apply:
- To new tenancies, on or after the commencement date.
- To existing tenancies, on or after the extended application date (at the expiry of an existing fixed term or at a date to be set out in regulations). However, if a s.21 notice is served before the extended application date, the tenancy will not be converted to a periodic assured tenancy until proceedings are concluded or become time barred.
What isn’t included in the Bill?
The following aspects remain unclear:
- Whether the requirements for landlords to provide an EPC, How to Rent guide, and gas safety certificates will be included in this Bill or disapplied.
- If and how the promise to “make it illegal for landlords and agents to have blanket bans on renting to families with children or those in receipt of benefits” will make its way into the Bill.
- How enforcement by local authorities will work in practice.
A victory for tenants’ rights?
The Bill has been hailed as such. However, some of the proposed changes will have the opposite effect. Particularly concerning are the changes to the grounds for possession, such as the introduction of ground 8A, which could result in people who have experienced short periods of financial difficulty – even years previously – becoming subject to a mandatory ground. Equally, grounds 5E, 5F and 18 appear to give landlords housing vulnerable people sweeping powers to remove their tenants.
Campaigners are pushing for the imposition of a limit to the amount of rent in advance payable by tenants at the start of a tenancy, and for the notice period to be increased from two to four months. The London Assembly has insisted the Bill is amended to give the Mayor of London the power to freeze and control rents in the capital. Others have expressed concerns about the impact an end to fixed-term tenancies will have on student housing, in a climate in which many students already struggle to find accommodation.
It has been four years since the Government promised to end “no fault” evictions. It may be some time yet before we know what shape the Act will take, and what impact it will have for those of us representing tenants.
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