Renters’ Reform Bill - Committee Stage

Finally, the Government has provided some much needed information on the Renters Reform Bill. The Second Reading of the Bill took place late on a Monday evening, lasting 4 hours and was passed in the Commons on 23rd October 2023.

The Bill focuses on a range of reforms to achieve this, including abolishing the landlord’s ability to rely on Section 21; ending the use of assured shorthold tenancie (ASTs); creating a new register of PRS landlords'; introducing a property portal and establishing a Landlord Ombudsman for the Private Rented Sector to help tenants and landlords to resolve disputes.

The biggest talking point of the Bill is the abolition of Section 21, however, the Government has now revealed that Section 21 is to remain in place for the time being. The Section 21 notice will still be abolished long term but only once improvements to the court process have been made, and the government will encourage the use of a strengthened mediation and dispute resolution process.

Improvements to the court system will include:-

• digitising the court process to make it simpler

• prioritisation of certain types of cases, such as those relating to antisocial behaviour and significant rent arrears

• improving enforcement through better recruitment and retention of bailiffs. 

So what’s changed in the Bill?

No More ASTs

Since their introduction under the Housing Act 1988(1996), the Assured Shorthand Tenancy has been the most widely used type of contract within the PRS. The Bill will abolish fixed term tenancies and as such we will be using a new version Periodic Tenancy. All tenants who have an assured tenancy or assured shorthold tenancy will move onto a single system of monthly, ‘periodic’ tenancies with a start date, but no fixed term.

Tenants will also be permitted to serve notice.

An Updated Section 8 Notice

The Grounds under Section 8 will be modified. The response also recognises the difficulties the original Bill posed for student landlords and proposes the introduction of a new Ground under Section 8 which will assist landlords to be able to guarantee possession at the end of the ‘academic’ year.

The new grounds 1 and 2 will allow a landlord to regain possession if they or their family want to live in the property, or they wish to sell the property. The notice period for these grounds will be two months. Landlords will not be able to rely on these grounds in the first six months of a tenancy. After using them, they will be banned from reletting or remarketing their property within 3 months.

The Bill will also include a new mandatory ground for eviction in cases where a tenant has been in at least two months’ rent arrears THREE times within the previous three years. Unusually, the notice period for rent arrears ground will be INCREASED to four weeks from two weeks.

The Bill expands the existing discretionary ground to evict tenants who have been guilty of anti-social behaviour and will include nuisance or annoyance. On this ground, landlords can begin eviction proceedings immediately.

Rent Increases

Landlords will be able to increase rents annually to market rent and must provide two months’ notice of the increase.

As is the case now, tenants will be able to challenge rent increases which are ‘excessive’ via the First-Tier Tribunal (Property Chamber).

The changes around rent increases hope to prevent above market rent increases being used by landlords to force tenants to vacate a property.

Renting with Pets

There has been a lot of discussion around this point. The Bill will require landlords not to unreasonably withhold consent when a tenant in the PRS wishes to have a pet and enables tenants to challenge a landlords’ decision through the Landlord Ombudsman.

The Tenant Fees Act 2019 will be amended so that landlords can insist on insurance to cover any damage caused by pets. Along with insurance, tenants will need to provide a detailed ‘description’ of the pet - breed, size, age, details relating to their vet, vaccine dates and so much more than is currently requested.

The Landlord Ombudsman

The government will introduce a redress scheme for private residential tenants, which will deliver on the Government’s commitment to create a new Ombudsman for the private rented sector. Legislation will require prospective, current, and former residential landlords to register with the redress scheme.

The Landlord Database

A database will be implemented requiring all prospective residential landlords and dwellings which are, or intend to be, let under residential tenancies, to be registered. This new database will provide the basis for the future Privately Rented Property Portal. The database will include the following information:-

• Properties and the private landlord will be required to be registered on the database before they can be let, or before they are advertised for let. 

• Landlords will have a period of 28 days after registering on the database to comply with regulatory requirements.

• Landlords will need to keep entries on the register up to date with key documentation, such as gas safety certificates for the entry to remain active. 

• Local Authorities will have a role in running the database, including authenticating, editing and removing incorrect entries, if the database cannot be automised. 

• Landlords must pay a fee to register on the database. Failure to do so will incur late registration fees.

• Where landlords have received banning orders or other financial penalties, these offences will be publicly viewable. 

• Penalties for landlords that breach the requirements of the database, including providing misleading information will be in place, such penalties must not exceed £5,000 or £30,000.

For further information, read the detail discussed by the Parliamentary Committee.