Renters' Reform Bill and No-fault Evictions

On 16 June 2022 the government published a white paper setting out its plans to reform the private rented sector, described by the government as “a major reset of power between tenants and landlords…”.

What is the purpose of the Bill?

The Renters’ Reform Bill (the “Bill”) was first proposed in 2019 with the intention of abolishing no-fault evictions under section 21 of the Housing Act 1988 (the “Act”). The Bill now forms part of the government’s wider levelling up mission to half the number of poor-quality homes by 2030 and improve quality, affordability and fairness in the private rented sector.

The government has recently published their White Paper on ‘A Fairer Private Rented Sector’ which sets out how, through the Bill, it aims to reset the tenant-landlord relationship and ensure that there is a legally binding standard to which landlords must adhere to.  

What changes does the Bill propose to make?

The Bill proposes to:

1. Abolish no-fault evictions

• The abolition of no-fault evictions under section 21 of the Act aims to ensure that a tenancy will only end if the landlord has a valid ground for possession.
• The intention is that this empowers tenants to challenge unfair evictions and reduce costs associated with unexpected moves.
• All tenants with Assured Tenancies or Assured Shorthold Tenancies will be transitioned onto periodic tenancies, giving tenants greater flexibility to leave the property where necessary. The current proposal is that tenants must give two months’ notice when leaving a tenancy.

2. Strengthen grounds for possession

• Strengthening grounds for possession under section 8 of the Act will ensure that landlords have effective means to gain possession where necessary.
• The proposed new grounds include possession where a landlord wishes to sell their property or allow close family members to move into the property and possession where the tenant has repeatedly fallen into serious rent arrears.

3. Introduce a new single Ombudsman

• All landlords will be required to join the new single Ombudsman so that disputes between tenants and landlords can be settled efficiently and cost-effectively outside of court.

4. Require privately rented homes to meet the Decent Homes Standard

• The obligation to meet the Decent Homes Standard aims to provide tenants with safer and better valued homes.
• Landlords will need to ensure that their properties do not fall into disrepair and are free from serious health and safety risks. 

5. Restrict rental increases

• Proposals include limiting rental increases to one per year, ending rent review clauses and improving tenants’ ability to challenge excessive rent increases through the First-Tier Tribunal.
• The aim is to allow people to manage their costs and ensure increases are proportionate.

6. Introduce a new Property Portal

• The intention of the portal is to assist landlords in understanding and demonstrating compliance with their legal obligations.
• Landlords will be required to register their property on the portal and local councils will be able to take enforcement action against landlords who fail to do so.
• Tenants will have access to the portal to check their landlord’s compliance.

The proposals intend to empower tenants to challenge poor practice and unjustified rental increases and incentivise landlords to engage and resolve issues. The challenge will be to balance the protection of tenant security with a landlord’s right to manage their own property

What does the Bill mean for landlords?

The current law on possession of private rented homes remains the same and the Bill is still in its preliminary stages, with further clarification and guidance to be issued.

Landlords should bear in mind the intentions and proposals of the Bill because when it comes into force, it will significantly impact the ability to evict tenants within their portfolio. The proposed strengthening of the grounds for possession will assist landlords in evicting tenants where they have good reason to do so, but over all the changes are likely to place a substantial evidential burden on the landlord and potentially increase costs and time spent on evicting tenants.

A copy of the paper can be found here: A fairer private rented sector - GOV.UK (www.gov.uk)

It is possible that the bill could be published before March 2023. Please feel free to contact our Stephen Dean or Beatrice Lewers to discuss how it might affect your property interests: Stephen.Dean@LBMW.com or Beatrice.Lewers@LBMW.com