Renters Reform Bill: what does it mean for landlords?

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Our commercial property experts report…

The UK Government has announced radical plans to overhaul the private renters’ market, with a new bill designed to shift the balance between landlords and the country’s 4.4 million private rented tenants.

The Renters Reform Bill introduces a number of new rights for tenants which private landlords need to be aware of, covering a wide range of issues from rent reviews to security of tenure; from ombudsman complaints to the right to keep pets. This article outlines the bill’s key measures and analyses their implications for landlords.

Decent Homes Standard

By the Government’s own admission, around 1.6 million people currently reside in hazardous, low-quality homes which pose an imminent risk to tenants’ health and safety. To combat this, the new law will extend the ‘Decent Homes Standard’ to the private sector; the regulatory standard only currently applies in the social rented sector.

This will impose a duty on landlords to make sure the properties they rent out are free from serious health and safety risks – such as fire or carbon monoxide poisoning. Homes must be equipped with adequate kitchen and bathroom facilities and noise insulation, have adequate heating and be warm and dry, and have ‘clean, appropriate and usable’ facilities.

Section 21 evictions and tenancy structures

‘No fault’ section 21 evictions, which presently allows landlords to serve an eviction notice on a tenant on a rolling periodic tenancy or at the end of a fixed-term tenancy for no reason, will be abolished under the new law.

More than 20 per cent of private renters who left their homes in 2019 and 2020 did not end their tenancy of their own accord, including 8 per cent who were evicted by their landlord according to Government figures.

To facilitate the abolition of Section 21 evictions, the Government aims to ban assured tenancies and assured shorthold tenancies for all tenants and replace them with a single system of periodic tenancies.

To ensure landlords can recoup the costs of finding a new tenant and are not regularly stuck with empty properties, a tenant who wants to move out will need to give two months’ notice. Landlords will only be allowed to evict a tenant in ‘reasonable circumstances’, which have yet to be defined.

Properties let to students will be covered by this change in the law, but purpose-built student accommodation will be exempt.

Eviction and gaining possession

New mandatory grounds for possession will be introduced for landlords who want to sell the rented property or move into it themselves, although these grounds will not be usable for the first six months of the tenancy.

New mandatory grounds for repeated serious arrears will also be brought in, although new measures are also planned to ensure that tenants who are behind with their rent have a fair chance of paying off their arrears without losing their home.

Rent increases and rent in advance

Rent review clauses will be abolished and landlords will only be allowed to put up their rents once a year. Two months’ notice of any rent increase must be given.

Where a tenant has paid rent in advance, the landlord will have to repay any outstanding amount when the tenancy ends. The level of rent which landlords can require in advance will also be limited.

Mandatory ombudsman

A single Government-appointed ombudsman with jurisdiction over all private landlords in England will be introduced to allow disputes to be settled in a faster, easier and cheaper fashion, without the matter having to go to court.

The ombudsman will have a range of powers including obliging landlords to apologise, provide information, take action to fix outstanding problems with the property, and/or pay compensation to tenants of up to £25,000.

Ombudsman membership will be compulsory for landlords.

Blanket bans

Blanket bans currently imposed by some landlords, such as on families with children or people on benefits, will be outlawed.

Right to keep pets

All tenants will have the legal entitlement to request that a pet shares their home. The landlord is obliged to consider such requests and is not allowed to unreasonably withhold consent. They can, however, require their tenant to have pet insurance to cover any possible damage to the property caused by the pet. A landlord’s refusal can be challenged, but there is not yet any details on how this will work.

New property portal

A new online property portal will be introduced, providing a one-stop-shop and access point with information for landlords, tenants, and local councils.

The portal will outline the responsibilities of landlords, allow tenants to review the compliance of their landlords, and provide local councils with better data to allow them to more easily tackle landlords in breach of their obligations or the law.

Some of the information collated for the Database of Rogue Landlords will form part of the portal, allowing landlords who break the law to be publicly named and shamed.

How we can help

The Renters Reform Bill heralds the biggest shake up of the private rented sector in 30 years. Landlords will need to be ready for when the bill becomes law. Legal advice from a specialist commercial property solicitor is highly recommended to ensure that you are in compliance with all your new obligations.

For further information, please contact Abbie Smith in the commercial property team on 01733 882800 or email [email protected].

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