Further to my previous blog on the Renters Reform Act, this content aims to provide landlords with a brief update in respect of some of the changes that the Renters Rights Bill proposed to make and how these changes will impact landlords.
What are the main changes in the Renters Rights Bill?
Since our blog on the Renters Reform Act, the Bill has been amended to be re-named as the Renters Rights Bill. The main changes in the Bill are that there will be the introduction of a Landlord Ombudsman, there will be a ban on rental bidding wars, there will be a PRS database introduced which is where landlord and management agent’s name, address and contact details will be included as well as any enforcement action taken against them and any previous eviction notice served on tenants and there will also be strengthening of enforcement on landlords in relation to non-compliance and in relation to Rent Repayment Orders.
The Renters Rights Bill is expected to become law during Spring and it is expected to be after Easter 2025. Once the Bill commences, it will become law immediately and the changes under the Bill will come in one stage as opposed to in a two-stage transition period as was originally envisaged.
Given that the Bill is on its third reading in the House of Commons, it is unlikely that the proposed changes are going to change dramatically and so landlords may want to start looking at what steps they want to take before the changes do come into force.
In brief, it is proposed that the Renters Right Bill will: -
- Abolish Section 21 Notices and no-fault evictions; this change will take immediate effect when the Bill comes into force;
- Ensure possession grounds are fair to both parties, and to enable this, current grounds for possession under section 8 of the Housing Act have been amended with some additional grounds have been added to fill in the gaps;
- It will provide stronger protection against that for evictions by ensuring that tenants are able to appeal excessive market rents proposed by landlords which are designed to force tenants out;
- Introduce a new private rented sector landlord ombudsman;
- Give tenants strengthened rights to request a pet in the property with less opportunity for landlords to refuse tenants having pets in the home;
- Apply decent home standards to the private rented sector;
- Make it illegal for landlords and agents to discriminate against prospective tenants in receipt of benefits or who have children;
- It will end the practice of rental bidding by prohibiting the landlord and agents from asking for or accepting offers above the advertised rent;
- It will strength Local Authority enforcement by expanding civil penalties; and
- It will strengthen the rent repayments order by extending them to apply to Superior Landlords.
Renters Rights Bill - Abolition of Fixed Term Tenancies
The Renters Rights Bill will introduce a new tenancy system which means that all fixed term assured tenancies will be abolished. All tenancies in place will become periodic, and this will be with immediate effect. This means that tenants will be able to stay in their home until they decide to end the tenancy by giving at least 2 months’ notice to their landlord. This will give both parties more flexibility for changing circumstances by allowing tenants to end their tenancies without having to wait for any fixed term to expire which is the case presently.
Renters Rights Bill - Amended Grounds for Possession
With the abolition of section 21 notices and no-fault evictions, the mandatory and discretionary grounds under Section 8 of the Housing Act are being revised to ensure tenants are protected from arbitrary eviction and to ensure that they are given enough time to find a new home. This means that the notice periods for a number of the grounds for possession have been expanded, for example where the current notice period is two months, this has been extended to 4 months in some circumstances.
Landlords will only be able to take steps to evict their tenants if they can provide sufficient evidence to the Court that a discretionary or mandatory ground under section 8 of the Housing Act has been proven and that it would be reasonable to make an Order for Possession in the circumstances.
Whilst the revised grounds do fill in some gaps, landlords need to be aware that they will need to have a valid reason together with sufficient evidence to regain possession of the property and there is no alternative to the no-fault procedure being implemented.
How will the abolishment of Section 21 Notices affect landlords that have already served a Section 21 and/or Section 8 Notice before the Bill comes in force where proceedings have not been issued at the time that the Bill comes into force?
When the Bill comes into force, the current form of Section 21 and Section 8 Notices will no longer be valid.
In circumstances where a Section 21 or Section 8 Notice has been served before the Bill comes into force, provided that the limitation period has not expired on those notices, Landlords will be able to proceed down the route of issuing possession proceedings in line with the notice(s) already served but there is a time limit for doing so.
The Bill allows for Landlords to proceed down the route of issuing possession proceedings on notices already served however, landlords will be required to have the proceedings issued within 6 months of the date of service of the notice or, alternatively, within 3 months of the Act coming into force; whichever date is the soonest. Therefore, once the Bill comes into force, if Landlords have served notice(s) on their tenants but have not yet dealt with the possession proceedings, they will need to ensure that they act quickly in order to ensure that they do not lose the right to act on the notice(s) previously served.
When are these changes in the Renters Rights Bill going to be implemented?
Guidance suggests that the abolishment of Section 21 Notices will have immediate effect once the Act comes into force and this will be dealt with all-in-one stage. On this date, the new tenancy system will also apply to all private tenancies with existing tenancies converting to the new system and any new tenancies signed on or after this date, will also be governed by the new rules. Existing tenancies will be converted to periodic tenancies with no fixed term and from the date of the Bill comes into force. Landlords will no longer be able to serve Section 21 Notices or old-style Section 8 Notices to evict their tenants. This differs from what the government previously intended to do which was by having a two-stage process, but all changes will come into force in one stage once the Act is in force.
If you do require any further information in relation to impending changes under the Renters Right Bill or if you require any assistance with being prepared for the implementation of the Renters Right Bill, please do not hesitate to get in touch and our team would be happy to assist you.