With a view to levelling up the rights of England’s private sector tenants, the Government is set to propose the Renters’ Reform Bill to parliament today following Prime Minister’s Questions, however full details of the proposals will not be available until a later unknown date.
The legislation outlines the Government’s desire to shake up the private rented sector by reducing existing disparities in housing standards. The proposed reforms to the PRS promises to be the most significant overhaul of the private rented sector in England in thirty years.
In June 2022, the government released a white paper entitled A Fairer Private Rented Sector that put forward its strategies in detail. The white paper outlined various suggestions for the rental market detailing a number of policies aimed at improving standards of fairness for tenants and landlords.
The government has since presented various plans, such as transforming all tenancies into periodic ones; increasing the notice periods for rent reviews; the abolishment of Section 21 and strengthening of Section 8; prohibiting landlords from having overall restrictions against renters who are in receipt of benefits or with children; and providing tenants more rights to have pets in properties.
The bill is being proposed in order to offer more protection and rights to all renting households with a view to bringing fairer terms for people who are living in rented accommodation, giving them the assurance that their home will be secure for longer periods.
Read on for a closer look at the eight major changes which are likely to be noted in the bill:
Section 21
Section 21 evictions, commonly referred to as no-fault evictions, are set to be abolished in England. These eviction proceedings allow a landlord to end an Assured Shorthold Tenancy (AST) without providing cause. The rules surrounding these evictions will be significantly changed to protect tenants from unfair treatment by unethical landlords. Post abolition of Section 21, tenants will only be able to be evicted under strictly outlined circumstances.
The white paper argues that abolishing Section 21 would usher in greater equity between landlord and tenant, enabling renters to tackle unfair practice and rent hikes, as well as motivating landlords to interact and resolve conflicts.
What modifications can be expected to the Section 8 grounds?
The government has planned to modify the provisions of section 8 to ensure they are “comprehensive, fair, and efficient, striking a balance between protecting tenants’ security and landlords’ right to manage their property”.
New boundaries for eviction are likely to be introduced, where a tenant has been in arrears of at least two months’ rent on three occasions within the past three years, regardless of their arrears balance at the hearing.
Landlords who wish to part with their property will be presented with a new option – the ability to transfer and move into a rental themselves or with family.
The notice period for the existing rent arrears eviction will be extended to four weeks, with a mandatory threshold of two months’ arrears when the notice is issued and before the hearing. In instances of criminal or egregious antisocial activity, the timeframe allotted for applying a mandatory eviction clause will be abbreviated.
It’s likely that court proceedings will undergo modifications in order to adjust to the new reality. We can expect adaptations in order to ensure the safety of all parties involved. Additionally, certain procedures may be overhauled or exchanged for alternatives that could be implemented without compromising fairness and justice.
In collaboration with Ministry of Justice and HM Courts and Tribunals Service, the government are bringing in reforms to streamline the process of possession proceedings. They specifically intend to target and eliminate any sources of irritation or delay. This incorporates County Court bailiff roles, relying heavily on paper-based processes, not giving adequate counsel concerning court and tribunal procedures, and not prioritising cases. The government intends to bolster and make mediation services more accessible for landlords and renters, in order to ward off avoidable evictions.
Periodic Tenancies as standard
Any former Assured Tenants or Assured Shorthold Tenants will be put on a single system of periodic tenancies. When a tenant has decided to leave their tenancy, they are obligated to provide two months’ notice. This is so that the landlords can regain their money spent on finding a new tenant and avoid the inconvenience of the property being unoccupied for extended periods of time.
What is the timeline for the introduction of periodic tenancies in England?
The government has made clear that they will be allowing a period for all tenants, landlords, and agents to adapt to the new system and take advantage of it as soon as possible.
The government will introduce the changes over two parts, with a least six months’ notice provided before its initial implementation date. Once it takes effect, all forthcoming tenancies will follow the new regulations.
What is the purpose of periodic tenancies being instituted?
The government envisages that the introduction of a single tenancy system should provide both landlords and tenants with enhanced clarity on their rights and obligations.
It hopes to provide a balance between security for tenants and the flexibility that private rental housing offers, the white paper states.
Notice periods for rent increases to be doubled
To battle the cost-of-living crisis, rent rises will only be allowed annually and landlords must give two months’ notice prior to any changes in rent.
The Renters’ Reform Bill white paper proposes to put an end to rent review clauses, so tenants will no longer be subject to unexamined rent hikes that are disconnected from market values. It also stresses that unjustifiable evictions through raised rent are not acceptable.
The government will take steps to ensure that tenants possess the assurance to dispute any rent increase that is out-of-proportion. Moreover, it will bar the Tribunal from raising rents above the amount that landlords originally requested.
Minimum housing standards to be introduced
The application of the Decent Homes Standard, which has previously only been used in relation to social housing, will be extended to cover the private rented sector (PRS).
The Decent Homes Standard encompasses a range of criteria that need to be met for a property to be considered an appropriate place for people to live. The criteria include sufficient space, good structural condition, and decent levels of heating, insulation, and light. Additionally, all properties must also have a functional kitchen and bathroom.
The government will also extend the scope of Rent Repayment Orders to enable renters to receive reimbursement for rental payments related to substandard homes.
What is the aim of the new standards?
The white paper argues that legislating a Decent Homes Standard on private landlords will go a long way towards ensuring that all properties are managed effectively, instead of relying on complaints and enforcement from local authorities.
The Decent Homes Standards will be enforced by local councils allowing them to address the landlords that are not complying, whilst safeguarding the good reputation of those who exhibit suitable conduct.
The white paper reconfirmed the government’s goal of improving as many homes in the private rental sector to EPC Band C as practicable by 2030.
Tenants increased rights to keep pets in properties
The government will pass laws that prevent landlords from refusing consent, without justifiable grounds, if a tenant wishes to keep a pet in their home. Tenants can object if they believe such a decision is unjust.
What kind of protection do landlords have when they take on a tenant that owns a pet?
The government intends to amend the Tenant Fees Act 2019 to include pet insurance as a permissible charge. In doing so, landlords will be enabled to request pet insurance, ultimately providing protection against any damage inflicted on their property.
Bans on renting to families with children or those on benefits to be abolished.
It will be prohibited for landlords and agents to rule out renting properties to families with kids or those receiving government benefits – ‘No DSS’.
What is the purpose of implementing these regulations?
The white paper asserts that, although many landlords offer excellent service to their tenants, evidence has shown that some are placing obstacles in the paths of those receiving benefits or with children seeking rental properties.
A new ombudsman covering all private landlords
A single ombudsman, endorsed by the Government, will be set up to cover all private landlords in England who let out property. This legislation is compulsory, regardless of whether they use a letting agent or not.
The ombudsman will have the authority to “put things right for tenants” and can require landlords to issue a formal apology, distribute required data, take corrective measures, and potentially award a compensation of up to £25,000.
The ombudsman’s determination will be effective and obligatory for landlords, should the complainant accept it. Should they choose to disregard the outcome, repeat or particularly serious offenders may face a Banning Order.
Is membership of the ombudsman compulsory for landlords or is it optional?
The white paper states that the imposition of ombudsman membership as a necessity for landlords who use managing agents should reduce cases where an agent is attempting to fix a complaint but the landlord refuses to cooperate.
Tenants will have access to a redress service in the event of any arising issues, and landlords are held responsible for fulfilling their legal obligations.
New Property Portal for private landlords and tenants
This fresh digital Property Portal has been designed to be a single-entry point which will assist landlords in comprehending and presenting evidence of their compliance with all legal obligations.
The government has pointed out that often tenants only become aware of substandard conditions they are renting when it’s too late, as well as landlords deliberately not meeting regulatory standards. It adds that councils can now use the portal to identify those responsible and aid good landlords in showing compliance, thus helping attract new tenants.
What can be expected from the portal for landlords?
The precise nature of the portal has yet to be determined, with the government looking to carry out intensive tests of prospective solutions bolstered by user research and engagement with representative groups for the benefit of tenants, landlords and local councils.
The portal should have the capacity to accommodate future rules and regulations, aimed at improving the rented sector and reducing substandard living conditions by at least half by 2030. This could potentially involve a system that requires landlords and agents to adhere to a minimum quality of service before being allowed to let properties.
Is it compulsory to sign up for the portal for landlords?
The Property Portal is designed to answer these problems, mandating that landlords must register their property and granting local councils the ability to apply sanctions on private landlords who do not comply with this requirement.
This new Property Portal will dramatically strengthen the hand of local councils in tackling criminal landlords. It will incorporate some of the features which are available on the Database of Rogue Landlords and Property Agents, empowering authorities to carry out their enforcement role more effectively.