Is this the biggest shake up of the private rented sector in 30 years?

The Government has released its “Fairer Private Rented Sector White Paper”.

The Renters Reform Bill has been called the biggest shake up of the private rented sector in 30 years.

Liz Shaw, property litigator at Wake Smith Solicitors, looks at the proposals.

This article will cover:

• Proposed reforms
• Next steps
• Your next move?

Proposed reforms

Whilst, as always, the devil will be in the detail, the following reforms are proposed:

• Abolition of the Section 21 Notice
  As Landlords are aware, notices pursuant to Section 21 of The Housing Act 1988 entitles a Landlord to recover possession of the property when let out on an assured shorthold tenancy agreement without needing to give a reason or prove that the Tenant has been at fault.
  
  It has become quite difficult to serve a valid notice at times but nevertheless it is a staple for Landlords looking to recover possession of their property with the minimum of fuss.

It now seems unlikely that the proposed reformed grounds for possession will be as flexible as a Section 21 eviction.

There is an intention to move all Tenants on to a single system of periodic tenancies (a tenancy of no fixed term but renewing periodically).

Tenants will be free to leave at any time subject to giving 2 months’ notice with no liability for future rent.

It is proposed that for Landlords there will be a new mandatory ground for repeated serious arrears where a Tenant has been in at least 2 months’ rent arrears for 3 times in the previous 3 years regardless of the arrears balance at the hearing.

The reason for this is that historically possession has been avoided by the Tenant bringing the amount of the arrears under the mandatory limit by the time of the hearing.

Accordingly, Landlords should have comfort that Tenants who persistently pay late will be subject to the mandatory eviction.

• Reform of Grounds for Possession
  The Landlord will have to have a valid ground for possession.
  
  That said, the reform aims to expedite a Landlord’s ability to evict those who disrupt neighbourhoods through anti-social behaviour.
  
  It is also likely that in addition to the new grounds for persistent arrears that a Landlord will be able to obtain possession if it wishes to sell its property.
  
  
• Decent Homes Standard
  
  It is envisaged that properties must be at a decent standard of repair with no health and safety issues.
  
  The White Paper cites that poor quality homes cost the NHS £340million a year.
  
  Any properties with damp or with kitchens and bathrooms and temperature control issues will be required to be made good.
  
  Landlords will have a legislative duty to meet the Decent homes standard. 

It is not clear why this is deemed necessary given that at present there is already statute that Tenants can rely upon in relation to residential accommodation that doesn’t fit the current standard.  (The Homes (Fitness for Human Habitation) Act 2018)

• Prospective Tenants 
  
  Landlords will no longer be able to exclude Tenants with children or those in receipt of benefits.
  
  Similarly, pets can only be excluded if there are reasonable grounds to refuse consent.
  
  
• Deposits
  
  It also appears that the Government is looking at “passport deposits” to avoid Tenants having to save for a second deposit.
  
  
• Rent Increases 
  
  There will be a restriction of rent increases to once per year.
  
  The Government proposes to end the use of rent review clauses and also wants to improve a Tenant’s ability to challenge excessive rent increases through the First Tier Tribunal to support people to manage costs and remain in their homes.
  
  
• Court Delay 
  
  The White Paper confirms plans to tackle unacceptable delays.
  
  An Ombudsman will be created to assist with dispute resolution and a Property Portal will be created to assist Landlords with navigation of their legal obligations.

Next Steps

The Renters Reform Bill will move its way through Parliament and therefore timescales for its ultimate implementation are currently unknown.

It is likely that some of the reforms will be implemented much earlier than others.

For further information ask one of our Property Litigation team.

Your next move?

To book an appointment regarding property litigation issues please contact Liz Shaw in the Property Litigation team at Wake Smith Solicitors on 0114 224 2041.

Find out more about Property Litigation services

Published 28/07/22