Reviewing the key changes for landlords in the Renters (Reform) Bill

The much-awaited Renters (Reform) Bill received its first reading in the House of Commons last week, on Wednesday 17 May 2023.

After five years of consultation and refinement, the reforms aim to improve the leasehold system through increased regulation, digitisation and standardisation. 

The Bill seeks to provide greater flexibility and security for residential tenants by imposing additional restrictions on private landlords. The government’s supporting documents state that the reforms also aim to celebrate the overwhelming majority of residential landlords that “do a good job”. 

Key reforms in the Bill

• Abolishing section 21 ‘no fault’ evictions and move to a structure where all assured tenancies are periodic, with no end date, but note that under the Bill, a fixed term tenancy of more than seven years cannot be an assured tenancy.
  
  The periods of the tenancy will be based on payment of rent, based on a maximum one month rolling period, but tenants will need to give no less than two months’ notice to quit their tenancy, unless the parties have agreed a shorter period.

• Granting “more comprehensive” possession grounds to landlords, allowing them to recover their property – however, the amendments mean that some grounds will in fact take longer to enforce.
  
  By way of example, while landlords will be able to make a claim immediately for possession on the grounds of serious anti-social behaviour, the notice period for rent arrears is to be doubled to four weeks. Landlords will also be required to use a standard form of notice of proceedings for possession.

• Prohibiting landlords from increasing rents other than by virtue of service of a standard form of notice, and only where the market rate rises. Tenants will be able to challenge the rent increase, and the First-tier Tribunal (FTT) will continue to be able to hear those challenges. The FTT will also have jurisdiction to determine the correct market rent.
• Introduce a new Private Rented Sector Ombudsman, intended to provide impartial and binding resolution to landlord and tenant disputes. The redress scheme will be free to tenants - funded by requirement on landlords to register with the Ombudsman, for a fee to be determined in due course - with the power to compel a landlord to make a formal apology, give information, take remedial action and/or pay compensation of up to £25,000.
• Separately, creating a private rented sector database, which landlords will be required to register with before they can market a property as available for rent. It is hoped that the two processes will be aligned.
• Granting powers to local housing authorities to impose financial penalties on landlords that fail to provide required information to tenants or which contravene the terms of the Bill.
• Give tenants an implied right to request consent to keep a pet in the property, which the landlord must consider within 42 days and cannot unreasonably refuse – otherwise, this can be raised with the Ombudsman. Landlords will be able to require pet insurance to cover any damage to their property.

As part of the reforms, the government also intends to work on end-to-end digitisation of the court possession process, aligned with the abolition of s.21 and new possession grounds.

It is likely that the Bill will take at least the rest of 2023 to make its way through Parliament, and may also be subject to amendment along the way.