Renters Reform Bill
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Here’s what you need to know about the proposed reforms and their impact on landlords and tenants.
We will keep you updated with changes as the act progresses through Parliament.
Renters Reform - What will this mean for the Private Renting Sector (PRS)?
Firstly, one of the key points to consider is to ignore the trade press and national press who lead with headlines and never factor in the detail.
Abolishing Section 21
The government has announced that plans to abolish Section 21 evictions will be indefinitely delayed until after the court system is reformed.
Labour accused the government of kicking the proposals into the "long grass", arguing legal reforms would "take years" to complete.
Housing Secretary Michael Gove said it was "vital" to update the courts first. Downing Street has not put a timescale on how long the promised reforms will take to achieve.
A New Version of Section 8
This notice has been in place since the Rent Act 1977 (RA1977) when Grounds were referred to as ‘cases’ and then amended for the purposes of the HA1988 and then again in 1996; so effectively we will be going back to a version of what was available to landlords under the RA1977, but with a modern, current day twist.
Again, it’s not just the Grounds that will change, the court papers, processes - all reliant on the MOJ.
A key question is if a landlord is ‘genuinely’ selling and is required to rely on a ground in Section 8, how could this impact the sale?
The current position is that a landlord can enter into a ‘fixed term’ tenancy and then continue/extend the tenancy to periodic. There have been many instances where the periodic is more advantageous - flexibility, the ability for the tenant to serve one month’s notice, landlord may wish to sell - so what will the impact be? What will the tenant be permitted to do? Will the process require the service of a prescribed form? Can terms be varied, if so, how? Will the default position be Statutory or Contractual?
No cap on rent increases mentioned here yet, but giving a tenant a two-month warning that rent will increase is a practical, sensible move. If the notice period changes, so will the Section 13(2) and the process of appeal to the First Tier Tribunal (Property Chamber).
Blanket Bans on refusing Tenants with Children
Will the changes in legislation need to be reflected in the Equality Act 2010 meaning that refusing a tenant with children sits under the protected characteristics?
Tenants with Pets
Restrictions in place for tenants with pets have been a bone of contention for a long time.
The introduction of the Tenant Fee Ban 2019 did not take into consideration the impact capping the security deposit would have on tenants. This blinkered approach meant that tenants were either refused properties if they had pets OR required to pay a ‘Pet Rent’ meaning that the whole point of assisting tenants in paying less, actually meant they paid more in the long run.
So if pets are to be permitted and consent ‘not unreasonably withheld’ , what criteria will be in place to protect the landlord against irresponsible pet owners? A vetting process for the pet and owner, a set of criteria requiring infestation treatment, a pet passport, vaccinations in place, and stipulations relating to damage caused by the pet, must factor into the equation. Would it be a legal requirement for pet owners to take out insurance given that currently it is not a prerequisite in law for tenants to even hold contents insurance?.
The deposit schemes will of course, amend their criteria when dealing with deposit disputes that are pet related and pet clauses would be present in all relevant contracts. Again, this significant legislative change would require the Tenant Fees Act 2019, the Localism Act 2012, the Consumer Rights Act 2015, and the Housing Act 2004 (Section 213 ) to be amended.
Moving away from legislative change, how would this consent impact freeholders and their leases who have placed restrictions on leaseholders regarding pets and animals being kept in flats and apartments? Freeholders would need to be factor these changes into their leases and possibly vary the terms of existing leases.
The PRS is well versed with Property Redress and the role the Property Ombudsman and the Property Redress Scheme play in the sector, but how will an Ombudsman who is solely responsible for Private Landlords make a difference to tenants and the kind of enforcement that is currently available to consumers?
The tenant has several routes available to them should they feel it necessary to report a landlord - The First Tier Tribunal (Property Chamber), the Local Authority and Trading Standards. Whilst each enforcement organisation may overlap on some ways with another, the tenant does not have one point of reference. As with the Redress Schemes currently in place, an Ombudsman may be able to bring certain elements ‘under one roof’ as it were, allowing tenants to be heard if a landlord is found to be in breach of offences that can be readily addressed through a scheme. The Housing and Planning Act 2016 introduced Banning Orders and the ‘Rogue Landlord List’ which means that the tools are already available to be properly implemented through a Code of Practice for Private Landlords to adhere to.
Central Digital Property Portal
Leading organisations who have worked alongside the Letting Industry Council have been vocal about the need for a Unique Property Reference Number (UPRN) which will identify rental properties and as such provide a property footprint which will benefit the property sector and the consumer who is purchasing or renting a property. Alongside a URPN, a digital property portal can draw down information that will ensure compliance in relation to health and safety matters, paperwork and deposit protection.
Review of Housing Standards
Housing Condition and Decent Homes Standards for the Private Rental Sector (PRS) have been long been a concern to stakeholders involved in the housing sector. The Bill intends to put in place a much wider brief that currently applies to the social housing sector.