When it comes to renting a property, some of the most significant reforms are around the corner for both landlords and tenants. With almost 4.4 million tenants in England, it is no surprise that the Government is looking to make some radical changes when it comes to residential property rentals.
The purpose of the Renters’ Reform Bill (“the Bill”)
With a cost-of-living crisis upon us, the Government is keen to ensure protection is provided to the most vulnerable in our society and to ensure tenants have greater security in their homes.
The six most significant reforms are as follows:
1. The abolition of the Section 21 Notice.
Often referred to as “no fault” evictions, landlords will only be able to evict tenants if they can demonstrate that there are “reasonable circumstances” to do so. Therefore, the days of being able to remove a tenant by simply serving a Section 21 Notice and claim form are numbered.
2. Reform to the Section 8 Grounds
To balance the removal of the Section 21 Notice, landlords may take some comfort to learn that the section 8 grounds are set to be reformed. The rationale for the reforms is to strike a balance between maintaining security for tenants and providing landlords with the right to manage their properties.
There will be a new mandatory ground for repeated serious arrears. Eviction will be mandatory where a tenant has been in at least two months’ rent arrears three times within the previous three years regardless of the arrears balance at the hearing. There will also be a new ground to assist landlords recovering their property for the purposes of selling it or to allow them to move back into the property.
The notice period for existing rent arrear evictions will be increased to four weeks whilst the mandatory threshold of at least two months of rent arrears will remain.
It is likely that a shorter notice period will be required where a tenant is partaking in serious anti-social behaviour.
3. Periodic tenancies to become the norm
It is intended that tenants who are currently on an Assured Tenancy or Assured Shorthold Tenancy will be moved onto a single system of periodic tenancies. However, it is likely that there will be a two step transition period. The first deadline will require all new tenancies to be periodic and governed by the new rules and the second deadline will require all existing tenancies to be periodic.
Tenants will need to provide two months’ notice when leaving a tenancy to allow sufficient time for a landlord or managing agent to source an alternative tenant.
4. Rent Increase
It is proposed that landlords will only be able to increase rent once per year and landlords must give a minimum of two months’ notice before increasing rent.
5. A new Ombudsman
A single government approved Ombudsman applicable to all landlords who rent out property will be introduced with membership to be mandatory.
The Ombudsman will have the power to compel landlords to issue an apology, provide information, take remedial steps and/or pay compensation up to £25,000. It is also intended that the Ombudsman could require landlords to repay rent where the “service or standard of a property” is unsatisfactory.
6. Accommodating Pets and families on benefits
Landlords will not be able to unreasonably withhold consent when a tenant requests to have a pet in their property. However, a landlord will be able to compel tenants to take out pet insurance to ensure any damage to the property is covered.
It is also likely to become illegal for landlords or letting agents to have blanket bans on renting to families with children or those in receipt of benefits.
If you would like more information about the Renters’ Reform Bill or for any other landlord or tenant legal issues email pbhanot@wyn.legal
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