Renters Reform Bill 2023
Posted: May 17th, 2023, 6:12 pm
The bill was presented to Parliament today in the form of a first reading in the Commons.
The bill as introduced can be downloaded from the parliamentary website at https://bills.parliament.uk/bills/3462/publications. The bill is fairly lengthy and contains 5 parts and 4 schedules. It makes a number of changes to existing legislation in England (such as the long trailed abolition of Section 21 [so called no-fault evictions]) and introduces some new stuff including mandatory redress schemes and a property database.
Although the bill will no doubt be featured in newspapers and other forms of media in the coming weeks and months a good introduction to it is provided in the explanatory notes available from the same page as the bill itself. Pages 9, 10 and 11 of these notes provide a summary of the policies intended to be implemented through the legislation and are reproduced below.
Abolishing section 21
The Bill abolishes section 21 ‘no fault’ evictions and fixed term tenancies. All tenants who would previously have had an assured tenancy or assured shorthold tenancy will move onto a single system of periodic tenancies. Tenants will need to provide two months’ notice when leaving a tenancy. Landlords will only be able to evict a tenant in reasonable circumstances as set out in this legislation.
Purpose-Built Student Accommodation (PBSA) will be exempt from these changes as long as the provider is registered for government-approved codes, since these tenancies are not assured. Lettings by PBSA landlords are governed by the Protection from Eviction Act 1977.
The Bill also mandates that landlords must provide a written statement of terms setting out basic information about the tenancy and both parties’ responsibilities while retaining both parties’ right to agree and adapt terms to meet their needs.
Reforming landlord possession grounds
The Bill reforms the grounds for possession with the intention of ensuring they are comprehensive, fair, and efficient. As far as possible, the grounds have been defined unambiguously, to seek to offer landlords certainty about whether the ground will be met if going to court. Grounds have also been made mandatory where it has been judged reasonable to do so. This means judges must grant possession if the landlord can prove that the ground has been met. The Bill introduces a new ground for landlords who wish to sell their property and amends the ground for moving in to include close family members. These grounds will not be available to be used in the first 6 months of a new tenancy, mirroring the protection tenants currently receive.
The Bill also introduces a new mandatory ground for repeated serious rent arrears. Evictions 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 hearing. This seeks to support landlords,
while making sure that tenants with longstanding tenancies are not evicted due to one-off financial shocks that occur years apart.
The Bill increases the notice period for the existing rent arrears ground to four weeks and retains the mandatory ground in cases where a tenant has two months’ arrears at both the time of serving notice and of the hearing. This is intended to ensure that tenants have reasonable opportunity to
pay off arrears without losing their home.
The Bill also expands the discretionary eviction ground to clarify that any behaviour ‘capable’ of causing ‘nuisance or annoyance’ can lead to eviction. The government is also considering how to implement the proposal announced in the March 2023 Anti-Social Behaviour Action Plan to set out the principles that judges must consider when making their decision, such as giving weight to the impact on landlords, neighbours, and housemates, and whether the tenant has failed to engage with other interventions to manage their behaviour.
The Bill introduces new grounds for possession for the supported housing sector to end tenancies where necessary, to enable them to continue to operate housing safely or effectively, or otherwise protect the viability of their service.
The Bill also introduces new grounds for possession in relation to temporary accommodation for homelessness and for sectors that give accommodation tied to employment. This is intended to ensure that these services can continue to be delivered.
The Bill makes consequential changes to Part VII of the Housing Act 1996 to remove reference to section 21 notices, as section 21 is being abolished by this Bill, and replace the references to assured shorthold tenancies and fixed term tenancies with assured tenancies. The majority of these changes will be minor wording amendments, excepting the changes to the threatened with homelessness definition which remove the requirement for a local housing authority to accept a homelessness duty if they are served with a section 21 notice (since such a notice will no longer exist). The Bill also repeals, ‘the reapplication duty’, as we move to a new tenancy framework.
Rent increases
Landlords will be able to raise rents annually to market prices (replicating existing mechanisms) and must provide two months’ notice of any change. Tenants will be able to challenge above-market rent increases through the First-tier Tribunal (Property Chamber), - this seeks to prevent above market rent increases being used to force tenants to vacate a property. Terms which allow rent increases outside of the statutory mechanism will be of no effect.
Renting with pets
The Bill requires landlords not to unreasonably withhold consent when a tenant requests to have a pet in their home, with the tenant able to challenge a decision. It also amends the Tenant Fees Act 2019 to include pet insurance as a permitted payment. This means landlords will be able to require pet insurance, with the intention of ensuring the costs of any damage to their property is covered.
Landlord redress schemes
The Bill enables the government to approve or designate one or more redress schemes which all private landlords who rent out property on an assured or regulated tenancy in England will be required to join, regardless of whether they use an agent. This will ensure all tenants under relevant
tenancies have access to redress services to deal with their complaints, and that landlords remain accountable for their own conduct and legal responsibilities. The intention is that the government will approve or designate only one scheme to act as Ombudsman for the sector.
The Bill provides for membership of an approved or designated scheme to be mandatory and for landlords to remain members, including for a specified period after ceasing to let the property. It provides for local councils to be able to take enforcement action against landlords that fail to join an approved or designated scheme, or who are expelled for failure to adhere to their member obligations. It also sets out the redress powers of a scheme, which will include compelling landlords to issue an apology, provide an explanation, take remedial action, and/or pay compensation.
Private Rented Sector Database.
The Bill legislates for a Private Rented Sector Database, which will support the new digital Property Portal service. Landlords will be required to sign up and register all properties they let out, and the Bill provides for local authorities to be able to take enforcement action against landlords who do
not meet their obligations to register their properties. The Bill provides for an Operator of the database, who will be the Secretary of State, or an organisation appointed by the Secretary of State. The Bill provides for regulations, which will set out further details about how the database will be
operated and overseen, what information will be collected and made public, and details about how renewals will work.
Lead Enforcement Authority
The Bill gives the Secretary of State the power to appoint a lead enforcement authority, or lead enforcement authorities, for the purpose of any provisions in the relevant landlord legislation (which is defined in Clause 58). A lead enforcement authority’s functions will include providing guidance, information and advice to local housing authorities about how to exercise their functions under that legislation, helping the provisions to be enforced in a consistent way. In addition, a lead enforcement authority will have the power to enforce, allowing it to take on complex or high-profile cases for which the responsible local housing authority may lack the capacity or capability to pursue.
modellingman
The bill as introduced can be downloaded from the parliamentary website at https://bills.parliament.uk/bills/3462/publications. The bill is fairly lengthy and contains 5 parts and 4 schedules. It makes a number of changes to existing legislation in England (such as the long trailed abolition of Section 21 [so called no-fault evictions]) and introduces some new stuff including mandatory redress schemes and a property database.
Although the bill will no doubt be featured in newspapers and other forms of media in the coming weeks and months a good introduction to it is provided in the explanatory notes available from the same page as the bill itself. Pages 9, 10 and 11 of these notes provide a summary of the policies intended to be implemented through the legislation and are reproduced below.
Abolishing section 21
The Bill abolishes section 21 ‘no fault’ evictions and fixed term tenancies. All tenants who would previously have had an assured tenancy or assured shorthold tenancy will move onto a single system of periodic tenancies. Tenants will need to provide two months’ notice when leaving a tenancy. Landlords will only be able to evict a tenant in reasonable circumstances as set out in this legislation.
Purpose-Built Student Accommodation (PBSA) will be exempt from these changes as long as the provider is registered for government-approved codes, since these tenancies are not assured. Lettings by PBSA landlords are governed by the Protection from Eviction Act 1977.
The Bill also mandates that landlords must provide a written statement of terms setting out basic information about the tenancy and both parties’ responsibilities while retaining both parties’ right to agree and adapt terms to meet their needs.
Reforming landlord possession grounds
The Bill reforms the grounds for possession with the intention of ensuring they are comprehensive, fair, and efficient. As far as possible, the grounds have been defined unambiguously, to seek to offer landlords certainty about whether the ground will be met if going to court. Grounds have also been made mandatory where it has been judged reasonable to do so. This means judges must grant possession if the landlord can prove that the ground has been met. The Bill introduces a new ground for landlords who wish to sell their property and amends the ground for moving in to include close family members. These grounds will not be available to be used in the first 6 months of a new tenancy, mirroring the protection tenants currently receive.
The Bill also introduces a new mandatory ground for repeated serious rent arrears. Evictions 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 hearing. This seeks to support landlords,
while making sure that tenants with longstanding tenancies are not evicted due to one-off financial shocks that occur years apart.
The Bill increases the notice period for the existing rent arrears ground to four weeks and retains the mandatory ground in cases where a tenant has two months’ arrears at both the time of serving notice and of the hearing. This is intended to ensure that tenants have reasonable opportunity to
pay off arrears without losing their home.
The Bill also expands the discretionary eviction ground to clarify that any behaviour ‘capable’ of causing ‘nuisance or annoyance’ can lead to eviction. The government is also considering how to implement the proposal announced in the March 2023 Anti-Social Behaviour Action Plan to set out the principles that judges must consider when making their decision, such as giving weight to the impact on landlords, neighbours, and housemates, and whether the tenant has failed to engage with other interventions to manage their behaviour.
The Bill introduces new grounds for possession for the supported housing sector to end tenancies where necessary, to enable them to continue to operate housing safely or effectively, or otherwise protect the viability of their service.
The Bill also introduces new grounds for possession in relation to temporary accommodation for homelessness and for sectors that give accommodation tied to employment. This is intended to ensure that these services can continue to be delivered.
The Bill makes consequential changes to Part VII of the Housing Act 1996 to remove reference to section 21 notices, as section 21 is being abolished by this Bill, and replace the references to assured shorthold tenancies and fixed term tenancies with assured tenancies. The majority of these changes will be minor wording amendments, excepting the changes to the threatened with homelessness definition which remove the requirement for a local housing authority to accept a homelessness duty if they are served with a section 21 notice (since such a notice will no longer exist). The Bill also repeals, ‘the reapplication duty’, as we move to a new tenancy framework.
Rent increases
Landlords will be able to raise rents annually to market prices (replicating existing mechanisms) and must provide two months’ notice of any change. Tenants will be able to challenge above-market rent increases through the First-tier Tribunal (Property Chamber), - this seeks to prevent above market rent increases being used to force tenants to vacate a property. Terms which allow rent increases outside of the statutory mechanism will be of no effect.
Renting with pets
The Bill requires landlords not to unreasonably withhold consent when a tenant requests to have a pet in their home, with the tenant able to challenge a decision. It also amends the Tenant Fees Act 2019 to include pet insurance as a permitted payment. This means landlords will be able to require pet insurance, with the intention of ensuring the costs of any damage to their property is covered.
Landlord redress schemes
The Bill enables the government to approve or designate one or more redress schemes which all private landlords who rent out property on an assured or regulated tenancy in England will be required to join, regardless of whether they use an agent. This will ensure all tenants under relevant
tenancies have access to redress services to deal with their complaints, and that landlords remain accountable for their own conduct and legal responsibilities. The intention is that the government will approve or designate only one scheme to act as Ombudsman for the sector.
The Bill provides for membership of an approved or designated scheme to be mandatory and for landlords to remain members, including for a specified period after ceasing to let the property. It provides for local councils to be able to take enforcement action against landlords that fail to join an approved or designated scheme, or who are expelled for failure to adhere to their member obligations. It also sets out the redress powers of a scheme, which will include compelling landlords to issue an apology, provide an explanation, take remedial action, and/or pay compensation.
Private Rented Sector Database.
The Bill legislates for a Private Rented Sector Database, which will support the new digital Property Portal service. Landlords will be required to sign up and register all properties they let out, and the Bill provides for local authorities to be able to take enforcement action against landlords who do
not meet their obligations to register their properties. The Bill provides for an Operator of the database, who will be the Secretary of State, or an organisation appointed by the Secretary of State. The Bill provides for regulations, which will set out further details about how the database will be
operated and overseen, what information will be collected and made public, and details about how renewals will work.
Lead Enforcement Authority
The Bill gives the Secretary of State the power to appoint a lead enforcement authority, or lead enforcement authorities, for the purpose of any provisions in the relevant landlord legislation (which is defined in Clause 58). A lead enforcement authority’s functions will include providing guidance, information and advice to local housing authorities about how to exercise their functions under that legislation, helping the provisions to be enforced in a consistent way. In addition, a lead enforcement authority will have the power to enforce, allowing it to take on complex or high-profile cases for which the responsible local housing authority may lack the capacity or capability to pursue.
modellingman