The Idiot’s guide to Renters Reform Bill- UPDATE

Not sure what’s in the Renters’ Reform Bill? We’ve rounded up everything you need to know about the long-awaited bill below and will continue to keep updating the guide as we get more clarification.

The government claim the reforms will help 11 million tenants across England benefit from “safer, fairer and higher quality homes thanks to a once-in-a-generation overhaul of housing laws.”

The new bill also claims it will ‘protect’ more than two million landlords by making it easier for them to recover properties when they need to – so they can sell their property if they want to, move in with a close family member, or when tenants willfully do not pay rent.

The Bill has now been published and can be viewed here

Updates to Bill – Section 21

The government has confirmed that it will delay abolishing Section 21 until it improves the court system for handling legitimate possession cases by landlords.

The announcement by the government gave no indication of how long the delay would be.

Student landlords will be pleased to hear that there will be a new ground to repossess properties annually to protect the student housing market.

The government said in a Levelling Up Committee’s report on reforms to the PRS: “We recognize that the student market is cyclical – and that removing section 21 will mean landlords cannot guarantee possession each year for a new set of tenants.

“Having engaged across the sector, we understand the cyclical model is critical for landlords’ business models and ensures a timely and robust supply of student accommodation.

“We will therefore introduce a ground for possession that will facilitate the yearly cycle of short-term student tenancies. This will enable new students to sign up to a property in advance, safe in the knowledge they will have somewhere to live the next year.”

Updates to Bill – Fixed term tenancies

Under the proposed Renters’ Reform Bill, fixed-term tenancies would be banned, and  periodic tenancies would be introduced across the private rental sector.

The government said in a Levelling Up Committee’s report on reforms to the PRS: “We believe retaining fixed terms would unfairly lock students into contracts, meaning they could not leave if a property is poor quality, or their circumstances change. Student tenants should have the same flexibility as others.”

The government has instead proposed introducing a new ground for possession for student tenancies so that landlords can serve notice to coincide with the academic year.

Updates to Bill- Pets

Since the bill has been published the government have offered some more clarification regarding pets.

The Renters Reform Bill says landlords will be required to fully consider all requests for a pet on a case-by-case basis.

A landlord must give or refuse consent in writing on or before the 42^nd day after the date of the request, although there are some exceptions detailed in the Bill.

The government have provided some updated guidance on landlords refusing a pet in a rented property.

The Department of Levelling Up, Housing and Communities response to the Select Committee report gave examples of the factors which they anticipated landlords would take into account when making their decision.

The government said: “We anticipate that landlords will take into account a number of factors when making their decision. This might include the size of the pet and the property; whether the property or common areas are shared with other tenants; allergies or phobias and, if relevant, access to outdoor space.

“A landlord could likely refuse if, for example, the animal was clearly too large for a small property, or if another tenant in a shared house had an allergy or phobia.”

Landlords will be able to require pet insurance to cover any damage to their property.

Tenants also pay a tenancy deposit which can be used for damages although landlords should not attempt to recover costs twice for the same damage.

If a pet damages a property and the insurance and deposit do not cover the cost of the damage, the bill says a landlord could take the tenant to court to recoup additional funds in line with wider rules in the sector.

Updates to Bill – New Section 8 Grounds for Possession

Landlords will be able to end a tenancy in specific circumstances defined in law. The grounds for possession are outlined here:

Table 1: Reformed grounds for possession

The full list covering all circumstances a landlord might reasonably expect possession can be found here

Where a landlord seeks possession using section 8 grounds, the process to end a tenancy will be similar to the current process of using section 21.

Landlords will need to serve the notice on the prescribed form to their tenant with the required notice period. Landlords will need to go to court if a tenant does not leave and provide evidence that the ground applies.

The government have published updated guidance

New grounds for student tenancies

The government announcement on 20 October stated: “landlords must be able to guarantee possession each year for a new set of tenants, and we will introduce a new ground for possession to facilitate this.” No word yet on whether the ground will be mandatory.

New grounds for Revised Mandatory Ground 1: Occupation as principal home for landlord or family

• Only once the tenancy has lasted more than 6 months.
• The landlord must intend it to be their (or their family member’s) only or principal home. The Bill defines the landlord’s family as including their spouse/partner, and their respective parents, grandparents, siblings, children and grandchildren. It doesn’t include nieces, nephews, uncles and aunts etc.

New Mandatory Ground 8A: Repeated Rent Arrears

• At least 2 months’ rent was unpaid for at least a day on 3 or more separate occasions within a three-year period.
• If the rent isn’t by calendar month, at least 8 weeks’ rent needs to be unpaid.
• The calculation of rent arrears should exclude any sums due to delays from the payment of Universal Credit

Updates to bill – Rent increases

In the new system, all rent increases will be via one mechanism which replicates the existing section 13 process. This will require a landlord to complete a simple form, which will be published on GOV.UK, and serve it on the tenant with 2 months’ notice.

Once the form is served, the landlord will not have to take further action. If the tenant accepts the proposed rent increase, they simply need to pay the new amount on the next rent day.

A tenant can dispute the increase through referring a case to the First-tier Tribunal, if they think it is above market rate. This must be before the starting date of the proposed new rent and tenants should notify their landlord that they are doing so.

The government have updated the guidance saying landlords will only be able to increase rents once a year. The government have said they  will issue guidance in due course to make sure it is clear for everyone.

Updates to bill – No more blanket bans on benefit claimants or families with children

The Renters Reform Bill will make it illegal for landlords and agents to have blanket bans on renting to tenants in receipt of benefits or with children.

Rachel Maclean, Minister of State for Housing and Planning, said during the second reading of the Renters’ Reform Bill the government are committed to ensuring no family is unjustly discriminated against when looking for a place to live.

She said: “I was asked about blanket bans on benefit claimants and families with children, and I make it very clear that we are committed to outlawing the unacceptable practice of such blanket bans. We are carefully considering how to get these measures right.

“This is a significant reform, as I think all Members understand. We must do it in the right way, while ensuring that landlords rightly have the final say on who they rent their properties to.”

Updates to Bill – Property portal

Landlords will get a new digital Property Portal to understand their obligations and help tenants make better decisions when signing a new tenancy agreement.

The proposed bill introduces a digital database called the “Rented Property Portal” in which each landlord and dwelling will be required to have a unique entry.

Landlords must have active entries on this database before they can market a property for rent, and landlords will be responsible for covering the operational costs of the database.

The guidance says a number of new offences will be introduced relating to the PRS database, including knowingly or recklessly providing material false or misleading information.

It will also be added to the list of offences that can enable a tenant to obtain a rent repayment order under Section 40 Housing and Planning Act 2016.

The DLUHC response to the Levelling Up Select Committee said that they expected the penalty system to be “tiered”, with different penalties for different offences.

The government have not provided any more information on how the property portal will operate.

New Ombudsman

All landlords will be legally required to join the new Ombudsman scheme. At the moment the government is still exploring options for which organisation will take on the role of Ombudsman.

The Ombudsman will be introduced as soon as possible after Royal Assent

The government say: “As a minimum, landlords will be asked for their name, contact information, address, and private rented property details. We are exploring ways for landlord sign-up to align with registration on the Privately Rented Property Portal, so landlords are only required to submit the same information once.”

If a landlord breaches their ombudsman membership requirement, they can be fined up to £5,000 by the local council. If a landlord repeatedly breaches the requirement, they may be fined up to £30,000 and could face criminal prosecution and a Banning Order.

Landlords who use an agent to manage their property will still be required to join the scheme. The Bill says: “Landlords who use managing agents are still responsible for their own behaviour and still retain legal obligations to tenants – particularly around standards and repairs.

“Tenants should be able to seek redress against a landlord when the landlord is at fault, regardless of whether a managing agent is used.”

Only tenants will be able to complain to the Ombudsman. The government says: “While not offering redress for landlords, we are exploring the possibility for the Ombudsman to offer mediation services to landlords to help them resolve their disputes with tenants.”

Letting agents will not be required to join the Ombudsman scheme.

Decent Homes Standard

The decent homes standard will be extended to the PRS for the first time.

Introduced in the early 2000s the standard requires all social housing must be free from serious health and safety hazards.

The government says introducing the decent homes standard to the PRS will give renters higher quality homes.

“We will give renters safer, higher quality homes and remove the blight of poor-quality homes in local communities. This will help deliver the government’s Levelling Up mission to halve the number of non-decent rented homes by 2030.”

The government have not confirmed when the decent homes standard will be introduced in the PRS.

Council enforcement powers

The Renters’ Reform Bill will also strengthen councils’ enforcement powers by introducing a new requirement for councils to report on enforcement activity – to help target criminal landlords.

The government have not provided a timescale for when these enforcement powers will happen.

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