Considerable column inches have already been devoted to the introduction of The Renters (Reform) Bill with many commentators lamenting that it will hasten the demise of the private landlord. Hailed as the biggest overhaul of residential tenancy law for over thirty years, it seeks to address perceived inequalities in the landlord/tenant relationship. The Bill is unlikely to hit the statute books until next year, not least as there are several aspects that will require ironing out such as the impact of the end of fixed-term tenancies on the student rental market and the letting of properties on farms to tenants unconnected with farming.
What’s in The Renters (Reform) Bill?
The most headline-grabbing reforms are the ending of no-fault evictions (section 21), a ban on landlords refusing tenants claiming benefits, and a legal right for tenants to ask to keep a pet.
Other key aspects include:
- Ending fixed-term tenancies. Instead tenancies will operate on a rolling monthly basis with no end date.
- Allowing landlords to continue to be able to repossess their property if they want to sell or move in either themselves or close family.
- Strengthening the grounds for repossessing the property if the tenant repeatedly fails to pay rent or displays anti-social behaviour.
- Rent increases will be managed through a recognised process with tenants having the right to appeal to the First-Tier Tribunal against their landlord’s proposed increase.
- The appointment of an independent Ombudsman to help resolve tenant complaints if landlords have failed to deal with them adequately.
- The establishment of a Property Portal, accessible by landlords, tenants, and councils.
- The Decent Homes Standard will apply to all privately rented properties (although no time frame has been given).
- Only one rent review or increase per annum will be allowed and tenants must have two months’ notice of any increase.
The Bill has been drafted in response to what tenants describe as a lack of security, leading to a reluctance to complain about the condition of the property or about rent increases for fear of being evicted. The property portal will store information including property standards, landlords’ legal obligations, and proof that they are compliant. Tenants will have access to this information (although how much is still to be determined) to help them decide if the tenancy is right for them, as will local authorities so they can carry out enforcement action if required. Although landlords cannot unreasonably refuse a request to keep a pet, tenants are required to take out insurance in the event of damage.
What has been the reaction?
Many landlords initially reacted with horror at the removal of no-fault evictions, with many claiming they would have to sell and leave the sector. However, the commitment by the government to strengthen landlords’ ability to evict in specific circumstances (and particularly in the event of anti-social behaviour or increasing rent arrears) although sensible, will have to be backed by a robust court process. As a result, following the Bill's second reading in October, the government has confirmed that it will not abolish Section 21 until the court process has been improved.
Landlords will be required to join a mandatory redress scheme in the form of an Ombudsman which will help to "tackle the root cause of problems, address systemic issues, provide feedback and education to members and consumers, and offer support to vulnerable customers.” Most importantly, it will give tenants free redress to resolve a legitimate complaint if landlords have failed to do so; it will also have the power to compel landlords to take remedial action or pay compensation.
How this Bill will affect rural landlords
Of particular interest to rural landlords, the Bill will allow the re-possession of a tenanted property if the landlord needs it to house an agricultural worker they have employed, and they can also re-possess the property if it is needed either to house them or close family members. If a tenant farmer on an AHA tenancy or FBT is required to give up their tenancy with vacant possession, this also provides grounds to repossess any other assured shorthold tenancies on the farm. Grounds for re-possession as framed in the legislation will not apply to tenants under an Assured Agricultural Occupancy tenancy.
As the Bill has only had its second reading, it is unlikely that this will become law this year, in spite of Michael Gove’s hope that it would. In the meantime, various bodies representing landlords and tenants will continue to lobby for those adjustments they consider necessary while the government continues to add more detail to those areas, such as the property portal, where information is sparse.