Renters’ Reform Bill

Read on for an update of the Renter’s Reform Bill courtesy of our sponsors, WJ Meade.

The Private Rented Sector has experienced some significant changes in recent years, with new legislation being introduced and reforms on the horizon. Whilst the implementation of the new Energy Efficiency Standards has been delayed (raising minimum EPC ratings from an E to a C), the abolishment of the Section 21 (no fault eviction) has started to come into fruition through the body of the Renters Reform Bill.

When the Renters Reform Bill becomes live, it will cause the biggest shake up to the Private Rented Sector that we have seen for a number of years. Whilst many landlords have only recognised this bill as the ‘abolishment of Section 21s’, there is a lot more involved.

After having studied the first draft of the bill, several guidance documents and attended webinars, I have put together a very compact and straight forward guide to what this law will currently look like. I wanted to give some reassurance and busy some myths about what this is going to look like, but there may be many amendments and could be some time before it comes into force.

Whilst we are still in the early stages of this bill being read (and no amendments have been made yet), I expect this to first come in at some point next year, and then for this to be introduced in stages.

The bill is currently going through the House of Commons, then the House of Lords before being given Royal Assent. During this time, the bill will go through several readings and any amendments needed will be actioned before the next reading. Due to this lengthy process, alongside Parliamentary Recess, I don’t foresee this bill being made law for at least a year, meaning it should either come into force in April 2024 or October 2024. Even when the law is passed, there will still be extended deadlines for some of these reforms, as they will need time to be actioned. It is expected that new tenancies will have to comply six months and existing tenancies will have 18 months to comply after royal assent.

Main action points:

Assured Shorthold Tenancies are becoming Assured Tenancies:

Section 21 will no longer be in place, and instead the Section 8 will have new grounds, along with current grounds being amended. The main grounds which will be used to recover possession that does not involve a breach of tenancy will most likely be:

• Selling the property (two months’ notice).

• Moving back into a property or moving a close relative in (two months’ notice).

• Redevelopment/ large scale refurbishment (two months’ notice).

Fixed terms are going to be scrapped, with rent periods not being more than ‘one month’, meaning a tenancy would only end if the tenant chooses to leave or if the landlord serves notice to terminate a tenancy. This may be amended, as it leaves tenants without security of a fixed term.

Pets:

Although tenant’s right to have a pet have increased, there is a higher onus on the tenant having the correct insurance/ paying for any damage caused by the pet. Landlords will need to have a ‘reasonable’ ground if they wish to refuse a pet, such as their lease does not allow pets. However, ‘pet insurance’ will be regarded as a permitted payment with amendments being made to the Tenant Fees Act 2019.

A New Ombudsman for Private Landlords:

All landlords must sign up to this scheme whether or not they have a letting agent. This will mainly be used by ‘let only’ landlords for tenants to resolve disputes directly with landlords. If you have a managing agent, tenants would usually report to the agent’s ombudsman.

Private Rented Sector Database:

A new property database/ portal will be set up with information about all landlords and their properties. Every landlord/ property will need to be registered. Only necessary information will be made available to applicants such as the EPC rating etc.

Of course, there is a lot more depth to this bill, but the main points have been summarised above. As the bill still in its early stages, there is little more I know than what I have addressed above. However, in terms of timeframe, since the S.21 will be abolished, the court process will have to change, and this could take months, so even though the bill may come into force next year, I do not see how it can be made ‘user friendly’ until at least the end of 2024 and maybe even longer than that.