The Renters’ Reform Bill was formally announced today, brining with it the proposals to reform the rental market to provide additional protection to both landlords and to tenants.
Currently to remove tenants from a property a landlord will essentially use the Section 8 process or “fault” eviction. This process places the blame for a problem at the feet of the tenant, this can be anything from rent arrears through to anti-social behaviour or breaches of the tenancy agreement. The key part of this is that there is an onus on the landlord to demonstrate that the tenant has broken the tenancy agreement and that there is fault on behalf of the tenant.
The other method is known as Section 21, or “no-fault” eviction, which is where the landlord can simply decide they want their property back, without having to provide fault or give a reason. There is a minimum two month notice period, after which the landlord can then enact eviction proceedings through the Court. The new Renters’ Reform Bill is aimed at curtailing the use of the “no-fault” eviction process.
Under the proposed new process a landlord will only be able to recover possession of a property, where no fault is alleged, if they wish to sell a property, move themselves in or move in a close family member. Exactly how these measures are supposed to be demonstrated and enforced is yet to be confirmed; with any system open to abuse it is expected that there will be some form of financial consequence for a landlord who abuses the system. The process will take careful drafting to ensure that these measures are not simply lip service to the removal and actually have little consequences.
Landlords will also not be able to discriminate against tenants for having families or be claiming benefits. However, the reality is that these discriminations will likely continue given the state of the current rental market; with properties being snapped up by desperate renters without even viewing or large numbers competing, it is unfortunate that a more unscrupulous landlord could still decide against a tenant for a multitude of reasons and will be able to provide a valid reason that does not breach the legislation. It is anticipated that this is the part that will have the least amount of change on the market.
tenants with pets will also be grateful, as the new proposals also include the right to request to keep a pet. Instead of a landlord simply being able to say no, they will need to demonstrate that it is reasonable to refuse. As always, in the law when the use of the word reasonable is used it creates a grey area, however for those animal lovers amongst us, it does raise the possibility of being able to get that cat, dog or other animal that we always wanted. It is anticipated that this will only apply to “domestic” pets, and therefore the dreams for that back garden giraffe are likely to remain dreams.
Another measure announced is to prevent a landlord raising the rent more than once a year; this is unfortunately not a major change as currently landlords can only raise it every twelve months in any event. It remains to be seen what the process is proposed for this and further updates are likely to clarify any amendments to the procedures.
The other aspect is that the Renters’ Reform Bill is alleged to make it easier for landlords to recover property where there are rent arrears or anti-social behaviour. Currently there is a two week notice period for tenants to settle the rent arrears or to stop misbehaving and then the landlord can go to Court to evict them. It is not clear how the proposals will amend this timescale or make it easier for them. Currently there are mandatory grounds (the Court has no choice but to give the eviction order) and discretionary grounds (meaning at the judge’s discretion) meaning and it is anticipated that the discretionary grounds might be tightened up and the mandatory grounds will be made simpler to invoke.
The other aspects of the Renters’ Reform Bill is that there is to be a new ombudsman who will deal with tenancy disputes, with the view to streamlining the process. The reality is that this will depend on the funding available and the ability to process the applications made and judgment is currently reserved as to how effective and smooth this will be.
There will also be measures designed to assist tenants by having a database of landlords to help tenants decide if they want to rent from a particular landlord. With the current rental market it may make it difficult as there is a lack of property compared to the number of proposed renters, so options may not be possible. Within these walls there are visions of a rating system similar to Trustpilot or Uber, but the questions really are: How will it be administered? How will it be kept fair? How does a landlord earn their rating?
There will be enhanced standards for rental properties, to try and improve the quality of homes. In some areas this can be seen as a positive step, however the costs of improvements could also force a number of landlords to decide that the figures no longer add up; in such cases we can see that landlords will exit the market and create different issues. The proposal for providing better homes will also be combined with stricter enforcement powers for local councils for enforcement on those who fail to comply or meet the minimum standards.
There is no doubt that there are a small number of rogue landlords who do seek to abuse the current procedure and the lack of legal knowledge by tenants often means they comply with a notice that they could actual fight and prevent. It is anticipated that this will impact these landlords the most and the overwhelming majority of landlords who are legally compliant and decent people will actually not be affected by the proposals.
There are those who are concerned that the measures will encourage current landlords to take advantage of the current system of “no-fault” evictions and to remove any tenants now, either with a view to selling up or getting in new tenants at a higher rent from the start. If such measures happened and landlords decide to exit the market, then there is the real danger that the rental market could shrink and the measures could actually drive rents higher due to a scarcity of supply.
All of the above is of course dependent on the Bill working its way through Parliament and the House of Lords in the same way as all laws. If there is a change of government prior to the conclusion of this process and it being enacted into law, then the Bill will fail and the process will either need to be started again or the sitting government will need to introduce its own version of the Bill.
This shall all be watched with a careful eye!
If you are a landlord or a tenant and wish to know about your current options, then please do not hesitate to contact our landlord and tenant team on either 01892 824 577 or on email@example.com.
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