All you need to know about the Renter's Reform Bill

The long-awaited Renters' Reform Bill will be introduced to Parliament the week of May 8, 2023, the government has assured the NRLA.

The government is anticipated to disclose the complete text of its Renters' Reform Bill the week after the King is crowned, according to the National Residential Landlords Association. The A Fairer Private Rented Sector white paper, published in June 2022, included recommendations for the Renters' Reform Bill. Here is a summary of what will likely be introduced.

The Renters' Reform Bill: What Is It?

The government's aims to radically restructure the private rental sector (PRS) and raise housing quality are outlined in the Renters' Reform Bill.

The private rental sector in England would undergo "the biggest shake-up in 30 years" as a result of the proposed reforms.

The complete scope of the government's objectives was laid out in a white paper titled A Fairer Private Rented Sector, released in June 2022.

What's been proposed in the A Fairer Private Rented Sector white paper?

The proposals, as expected, call for the abolition of Section 21, the requirement that privately leased homes meet the Decent Homes Standard, the creation of a new property portal and an ombudsman to represent private landlords.

The government has also made a number of fresh proposals, including making all leases periodic, doubling the time between rent reviews, prohibiting landlords' blanket prohibitions against renting to benefit-receiving households or families, and enhancing tenants' rights to keep pets in their homes.

What motivates the introduction of the Renters' Reform Bill?

The white paper A Fairer Private Rented Sector "marks a generational shift that will redress the balance between landlords and 4.4 million privately rented tenants," according to the government.

It offers new protections for the most disadvantaged in times of cost-of-living pressure and new ways to combat arbitrary and unfair rent hikes.

At the same time, the measures to establish a Private Renters' Ombudsman, enhance the conditions for section 8 possession, and establish a new property portal will offer "greater clarity and support to the estimated 2.3 million private landlords."

When will the Renters' Reform Bill be introduced?

The Renters' Reform Bill will be introduced to Parliament in the week following the coronation of the King, beginning on 8 May 2023, the government has now announced through the NRLA.

The overview of the white paper

1. Abolition of "no-fault" Section 21 evictions

Since Section 21 will no longer exist, landlords will only be permitted to evict a tenant under legally prescribed, reasonable conditions.

According to the white paper, repealing Section 21 "will level the playing field between landlord and tenant, empowering tenants to challenge bad behaviour and arbitrary rent increases, as well as incentivizing landlords to engage and resolve issues."

How will the basis for Section 8 change?

However, the government will also change the Section 8 grounds of possession to make them more "comprehensive, fair, and efficient, striking a balance between protecting tenants' security and landlords' right to manage their property".

A new required ground for recurring substantial arrears requires eviction regardless of the amount of arrears at the hearing when a tenant has fallen behind on their rent by at least two months three times in the previous three years.

The ability for landlords and their families to move into a rental property will be made possible by the introduction of a new ground for landlords who seek to sell their property.

The mandatory need of at least two months' worth of arrears at the time of serving notice and hearing will remain in place, but the notice period for the current rent arrears eviction ground will be extended to four weeks.

The current required eviction ground's notice time will shorten in instances of criminal or severe antisocial behaviour.

How will legal processes change?

The government claims it will also propose a package of "wide-ranging court reforms that will target the areas that particularly frustrate and stall possession proceedings" in collaboration with the Ministry of Justice (MOJ) and HM Courts and Tribunals Service (HMCTS).

This will include the number of county court bailiffs, paper-based procedures, inadequate information about court and tribunal procedures, and a lack of case prioritisation.

Additionally, the government wants to "strengthen and embed mediation services for landlords and renters, preventing avoidable evictions".

2. The adoption of periodic tenancies as the norm

The transition to a single system of periodic tenancies would affect all renters who would have previously had an Assured Tenancy or Assured Shorthold Tenancy.

To "ensure landlords can recoup the costs of finding a tenant and avoid lengthy void periods," tenants will be required to give two months' notice when terminating a tenancy.

In accordance with the law, landlords will only be permitted to remove a tenant under reasonable conditions.

In England, when will periodic tenancies be legal?

According to the government, it will give tenants enough time to "benefit as soon as possible from the new system" while aiding tenants, landlords, and agents in their adjustment.

The government will implement the changes in two stages, giving at least six months' notice of the first implementation date, "after which all new tenancies will be periodic and governed by the new rules," according to the Renters' Reform Bill timeline.

All current tenancies will move to the new system on a second implementation date in order to prevent a "two-tier rental sector."

Why are we introducing periodic tenancies?

With a single tenancy system, the government anticipates that "both parties will better understand their rights and responsibilities."?

According to the white paper, it also aims to give tenants "greater security while maintaining the important flexibility that privately rented accommodation offers."

This will make it easier for tenants to move when their circumstances change, such as to take advantage of a new work opportunity, or to leave subpar residences without being held responsible for the rent.

3. Doubling of notice periods for rent hikes

Rent increases will only be permitted once a year in an effort to counteract the rising cost of living, and the minimum amount of notice that landlords must give before raising rent will be increased to two months.

Will rents be subject to review by landlords?

According to the Renters' Reform Bill white paper, rent review clauses will no longer be used, "preventing tenants from being locked into automatic rent increases that are vague or may not reflect changes in the market price," and "any attempts to evict tenants through unjustifiable rent increases are unacceptable."

The government will "ensure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal" in instances where increases are disproportionate, and it will "prevent the Tribunal increasing rent beyond the amount landlords initially requested when they proposed a rent increase."

4. introduction of minimum housing standards

The Decent Homes Standard, which presently only applies to the social housing sector, will be expanded to include minimum housing criteria for the private rental sector (PRS).

What exactly does the Decent Homes Standard cover?

Renters must have access to clean, suitable, and usable amenities, therefore the Decent Houses Standard requires that houses be free from major health and safety concerns and that landlords maintain their properties in a decent condition of repair.

Additionally, the government will extend Rent Repayment Orders to include repayment for substandard housing.

Periodic tenancies also give renters the option to leave unsuitable or unsafe housing without having to pay the remaining rent.

What are the goals of the new standards?

According to the white paper, making private landlords legally obligated to uphold the Decent Homes Standard will increase standards and ensure that all landlords efficiently manage their homes rather than waiting for a tenant to file a complaint or a local council to take enforcement action.

It will equip local councils with the means to uphold the PRS's Decent Homes Standard "so that they can crack down on non-compliant landlords while protecting the reputation of responsible ones".

The government's commitment to upgrade "as many homes as possible" in the private leased sector to EPC Band C by 2030 was also reiterated in the white paper.

5. Increased pet-keeping privileges for tenants

When a tenant requests permission to bring a pet into their house, the government will pass legislation to ensure landlords do not unreasonably object, with the tenant having the right to appeal a decision.

If a landlord accepts a renter with dogs, how will they be protected?

Pet insurance will be added as a permitted contribution under the Tenant Fees Act 2019 that the government will alter at the same time. So that any damage to their property is covered, landlords will be able to demand pet insurance.

Additionally, the government advises landlords "to grant reasonable requests by tenants to redecorate, hang pictures, or replace appliances - provided they return the property to its original state when they leave."

6. Outlawing restrictions on renting to households with children or those receiving benefits

It will no longer be acceptable for landlords or leasing agents to categorically prohibit renting to benefit-receiving households or families ("No DSS").

Why are these regulations being implemented?

According to the white paper, "while the majority of landlords offer professional services to their tenants, there is evidence that some landlords and agents are actively discouraging, or even preventing, people with children or those receiving benefits from renting their properties."

The government will also investigate the need for support for other disadvantaged populations who might have trouble getting PRS housing, like ex-offenders.

7. Establishing a new ombudsman to represent all private landlords

All private landlords renting out property in England, regardless of whether they work with a letting agent, will be covered by a single government-approved ombudsman, whose membership will be required.

What authority does the Ombudsman have?

The ombudsman will have the authority to "put things right for tenants," including ordering landlords to apologise, provide details, take corrective measures, and/or pay up to ￡25,000 in damages.

In cases where "the service or standard of property they provide falls short of the mark," the government also wants to give the Ombudsman the authority to order landlords to pay back rent to tenants.

Should the complainant accept the final finding, the ombudsman's decision will be binding on landlords, and failing to comply with a decision may subject repeat or serious offenders to a Banning Order.

Will landlords have to sign up with the ombudsman?

According to the white paper, requiring landlords who use managing agents to be members of an ombudsman system will lessen the likelihood that a good agent will be dependent on a landlord who will not cooperate in efforts to resolve a complaint.

Additionally, it will make sure that landlords are held accountable for their actions and legal obligations and that renters have access to redress services in "any given situation."

8. Private landlords and tenants can now use a new property portal.

To "provide a single 'front door' to help landlords understand, and demonstrate compliance with their legal requirements," a new digital property portal will be launched.

According to the government, "too frequently, tenants discover after the fact that they are renting a substandard property from landlords who willfully fail to comply, and councils don't know whom to track down when serious issues arise." The portal would "assist good landlords to demonstrate regulatory compliance and to attract potential tenants," according to the statement.

How will the new landlord property portal operate?

The government will "conduct extensive testing of potential solutions for the portal, supported by user research and engagement with representative groups, to ensure the system works for tenants, landlords, and local councils," but it is not yet clear what the portal will look like.

To "support efforts to raise standards in the sector and reduce the number of non-decent rented homes by 50% by 2030," the portal should be adaptable enough to accommodate changes in future policies. A system where landlords and agents must achieve minimal requirements before homes can be rented out could fall under this category.

Will listing properties on the portal be required?

With landlords legally obligated to register their properties on the portal and local councils given the authority to take enforcement action against private landlords who refuse to join the portal, the Property Portal seeks to address these problems.

"Drastically increasing local councils' ability to enforce against criminal landlords," according to the Property Portal. A portion of the functionality from the current Database of Rogue Landlords and Property Agents will be incorporated by the government.

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