An in-depth Look at the Renters’ Reform Billfjpinvestment
The official government line is that it is still “committed to introducing a Renters Reform Bill in this session of Parliament.” In June 2022, it produced A Fairer Private Rented Sector, a white paper in which it revealed its plans for the Renters’ Reform Bill. A continuation of the Levelling Up White Paper, this document details the government’s goals to reform the private rented sector and improve the standard of housing in the country. It has been widely reported that the government’s proposed adjustments to the private lease sector go much beyond what was originally envisioned, with the suggestion that it is “the biggest shake-up of the private rented sector in 30 years.”
Exactly what does the white paper, A Fairer Private Rented Sector, propose?
The proposals include some far-reaching changes, as was to be expected, the elimination of Section 21, the mandate that all privately leased homes comply with the Decent Homes Standard, the creation of a new ombudsman representing private landlords, and the launch of a property portal site.
Further government ideas include making all leases periodic, extending notice periods for rent increases by twice as long, criminalising landlords who refuse to rent to tenants because they have children or receive welfare, and expanding tenants’ rights to keep pets.
What is the purpose of the Renter’s Reform Bill?
According to the government’s white paper, A Fairer Private Rented Sector, “marks a generational shift that will redress the balance between landlords and 4.4 million private rented tenants. It provides new support for cost of living pressures with protections for the most vulnerable, and new measures to tackle arbitrary and unfair rent increases.”
According to the report, “the estimated 2.3 million private landlords with greater clarity and support” than the estimated 2.3 million private tenants will be provided by the proposals to form a Private Renters’ Ombudsman, strengthen grounds for possession under section 8, and introduce a new property portal site.
When could we expect to see the introduction of the Renters’ Reform Bill?
In a letter from Hugh Greenwood, chief officer of the private leased sector section of the Department of Levelling Up, Housing and Communities, the government indicated that it intends to bring the Renters’ Reform Bill in “this session of Parliament”, which ends in May 2023.
Here we’ll go over the eight most significant modifications proposed in further depth.
“No fault” evictions under Section 21 will be done away with
Landlords will only be allowed to legally remove tenants under legally specified “reasonable circumstances” after Section 21 is repealed.
The white paper argues that doing away with Section 21 will “level the playing field between landlord and tenant, empowering tenants to challenge poor practise and unjustified rent increases, as well as incentivising landlords to engage and resolve issues,” and also incentivise landlords to engage and resolve issues.
In what ways will the criteria for section 8 be altered?
Section 8 grounds for eviction will also be updated by the government to be more “comprehensive, fair, and efficient, striking a balance between protecting tenants’ security and landlords’ right to manage their property”
If a tenant has fallen at least two months behind on rent three times in the past three years, regardless of the arrears balance at hearing, eviction is now required under a new obligatory ground for persistent substantial arrears.
While the statutory threshold of at least two months’ arrears at the time of serving notice and hearing remains in place, the notice period for the current rent arrears eviction ground will be extended to four weeks.
It is proposed to shorten the current required eviction ground’s notice time in situations of criminal or severely antisocial behaviour.
What modifications may we anticipate in the judicial system?
Government officials have stated that they will implement a set of “wide-ranging court reforms that will target the areas that particularly frustrate and hold up possession proceedings, “such as county court bailiff capacity, paper-based processes, a lack of adequate advice about court and tribunal processes, and a lack of prioritisation of cases.” These reforms will be implemented in conjunction with the Ministry of Justice (MOJ) and HM Courts and Tribunals Service (HMCTS).
To minimise unnecessary evictions, the government also plans to “strengthen and embed mediation services for landlords and renters, preventing avoidable evictions”
The standard adoption of periodic tenancies
The Assured Tenancy and the Assured Shorthold Tenancy will be replaced by a new type of periodic tenancy that will be given to all current tenants.
To “ensure landlords can recoup the costs of finding a tenant and avoid lengthy void periods” landlords would require two months’ notice from departing tenants. Tenants will only be subject to eviction for a legally specified reasonable cause.
When will these tenancies become the law of England?
The government has stated it would give landlords, property managers, and renters time to acclimatise to the new system while still prioritising the tenants’ needs.
All new tenancies will be periodic and subject to the new regulations following the initial implementation date, which will be announced at least six months in advance, according to the Renters’ Reform Bill’s schedule. In order to prevent a “two-tier rental sector,” all current tenancies will switch over to the new system on a second implementation date.
To what end are periodic tenancies being implemented?
The white paper says that the government wants to set up a single tenancy system so that both landlords and tenants will better understand their rights and responsibilities and so that tenants will have “greater security for tenants while keeping the important flexibility that privately rented accommodation offers.”
As a result, “This will enable tenants to leave poor quality properties without remaining liable for the rent or to move more easily when their circumstances change, for example to take up a new job opportunity.”
Rent hikes’ notice period will be doubled to two months
Rent hikes will be capped at only one per year, and landlords will be required to provide tenants with at least two months’ notice before implementing any rent increases. This measure constitutes part of the government’s attempt to deal with the current cost of living crisis.
Can rent reviews be conducted by landlords?
“any attempts to evict tenants through unjustifiable rent increases are unacceptable,” reads a statement in the white paper for the Renters’ Reform Bill, which details proposals to do away with rent review conditions. The government considers these rent review clauses as unfair and wants to work to “prevent tenants being locked into automatic rent increases that are vague or may not reflect changes in the market price.”
If it were found that a rental increase had been deemed disproportionate and therefore unjustifiable, the government seeks to “make sure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal” and will “prevent the Tribunal increasing rent beyond the amount landlords initially asked for when they proposed a rent increase”.
It is proposed to implement minimum housing standard requirements
The Decent Homes Standard, which is currently solely applicable to the social housing sector, will be expanded to cover the private rented sector in order to establish minimum housing standards for privately rented tenants.
The Decent Homes Standard
The Decent Homes Standard ensures that tenants have access to safe and liveable housing by requiring landlords to maintain properties in a habitable condition that is in a good state of repair and maintenance and to provide clean and usable facilities.
Rent Reimbursement Orders will now include repayment for substandard housing as well. Tenants can terminate a periodic tenancy if they are living in conditions that make it hazardous or unfit for them, without being held responsible for any further rent payments.
What are the goals of the updated guidelines?
The white paper makes it clear what the goals of these new standards are by saying that “making it a legal requirement for private landlords to meet the Decent Homes Standard will raise standards and make sure that all landlords manage their properties well, rather than waiting for a renter to complain or a local council to take enforcement action.”
This would equip local authorities to implement the Decent Homes Standard in the private rented sectors “so that they can crack down on non-compliant landlords while protecting the reputation of responsible ones”
The government’s commitment to bringing “as many homes as possible” in the private rented sector up to EPC Band C by 2030 was also confirmed in the white paper.
Tenants are granted expanded pet-keeping rights
If a renter asks to keep a pet in their rental unit, the government will pass a law making it illegal for the landlord to refuse without good cause. The tenant in this situation would have the right to appeal the landlord’s decision.
If landlords decide to allow tenants with pets, how will they be safeguarded?
Concurrently, the government will update the Tenant Fees Act 2019 to recognise pet insurance premiums as lawful charges. This means that landlords could now ask tenants to get pet insurance to protect their properties from any damage pets could cause.
The government also suggests that landlords “to allow reasonable requests by tenants to redecorate, hang pictures or change appliances – provided they return the property to its original state when they leave.”
It will be illegal to refuse to rent to anyone who is on welfare or has children
Soon, landlords and rental agents won’t be able to have blanket rules against renting to families with children or people on welfare.
What is the justification for these new regulations?
According to the wording of the white paper, “while most landlords provide a professional service to their tenants, there is evidence that some landlords and agents are actively discouraging, or even preventing, people in receipt of benefits or with children from renting their properties”.
The government is to further look at whether or not it’s necessary to aid other marginalised communities that face barriers to privately rented housing, such as those recently released from prison.
A new Landlord Ombudsman for all private property landlords
All private landlords in England, regardless of whether they work with a rental agent to manage their properties for them, will be required to join a single government-approved ombudsman.
Where do the Ombudsman’s powers lie?
In order to “put things right for tenants”, the Ombudsman will have the authority to require landlords to apologise, provide relevant information, implement corrective measures, and/or pay compensation of up to £25,000, a significant sum.
The government wants the Ombudsman to have the authority to demand a rent refund for affected tenants if a landlord’s “service or standard of property they provide falls short of the mark.”
If the person who filed the complaint agrees with the Ombudsman’s final decision, the landlord must follow it. Landlords who break the rules often or in a serious way may be given a Banning Order.
Is landlord participation in the Ombudsman programme going to be mandated?
According to the white paper, “making membership of an Ombudsman scheme mandatory for landlords who use managing agents will mitigate the situation where a good agent is trying to remedy a complaint but is reliant on a landlord who is refusing to engage.” As to whether self-managing landlords will be mandated to participate, it is yet to be clarified.
It will make sure that renters may get help in “any given situation, and that landlords remain accountable for their own conduct and legal responsibilities”.
The new landlord-tenant portal website
To “provide a single ‘front door’ to help landlords understand, and demonstrate compliance with their legal requirements,” a brand-new property portal website is being developed to help facilitate this.
In referring to why this new digital portal will be an essential component of the new standards, the government has stated that “too often tenants find out too late that they are renting a substandard property from landlords who wilfully fail to comply, and councils don’t know who to track down when serious issues arise.” It’s stated that the site would “support good landlords to demonstrate regulatory compliance and to attract prospective tenants.” In other words, it is envisioned that it will benefit the majority of decent landlords that care about their tenants and work hard to ensure their properties are of a high standard by being in a better position to attract good tenants.
How will the new landlord property site function?
To make sure the system is useful for tenants, landlords, and local councils, the government will “do extensive testing of potential solutions for the portal, based on user research and engagement with representative groups.”
By “supporting efforts to raise standards in the sector and reduce the number of non-decent rented homes by 50% by 2030,” the site must be adaptable to new policies as they emerge. A rigid system will not be fit for purpose in a rapidly changing hesitate and policy environment. There might be a system in place where rental homes can only be listed by landlords and agents who fulfil certain criteria.
Will landlords have to sign up their properties on the website?
Private landlords will have to register their properties on the property portal site by law, and if they don’t, local councils can take action against them.
When it comes to cracking down on shady landlords, the Property Portal will “dramatically increase local councils’ ability to enforce against criminal landlords.” Some of the features of the current Database of Rogue Landlords and Property Agents will be included. As per government intentions, they will also be integrated into the new digital portal, giving tenants unprecedented access to landlord information.
Jamie Johnson, CEO of FJP Investment, said, “Most landlords already follow high standards for their properties and how they treat tenants. The new standards will give tenants more confidence that their rights are protected by law when it comes to the few landlords who don’t follow them. It can only taking a few unscrupulous few to tarnish the reputation of an important sector that is helping to alleviate the UK housing crises.”