The Renter’s Rights Bill

Introduced to Parliament on 11th September, the UK Government’s Renters Rights Bill aims to improve the current process for both the private renters and landlords in England, by giving the renters greater security and stability, enabling them to stay in their homes for longer, build lives in their communities, and avoid the risk of homelessness.

Overview of the Renters’ Rights Bill
The Renters’ Rights Bill will implement a new tenancy system. Through this new system, tenants will be able to challenge bad practices with less worry about eviction. The Government intends to provide landlords with more straightforward regulations, plus clearer and expanded possession grounds.

Shifting from Section 21 to Section 8 Evictions
If landlords require possession of their property, the current norm of tenants vacating premises at the end of a Section 21 Notice will no longer apply. Thereafter, a court order made through a Section 8 Notice will be needed when a tenant eviction is required.

With advance notice provided, the new type of private tenancy system will all be implemented on one date. It will then apply to all private tenancies, whether pre-existing or newly signed. Existing fixed-term tenancies will be converted to periodic tenancies. The validity of rent increases and notices served beforehand, however, will be maintained.

From a professional point of view, Section 21 has an invalid reputation as the eviction notice is utilised whenever the desire arises with landlords. In contrast, this notice is frequently used to regain possession of the property when neither landlords nor tenants are at fault. Typically used as a means for the landlord to sell the property or move back in, Section 21 is not employed because a tenant has refused to pay a rent increase, nor because a landlord wants to remove a tenant.

With all Section 8 Notices required to go to court for rulings and the one-stage implementation of the bill, pressure will be placed on the Private Rental Sector and the Judicial System. Fundamental change is still needed, to allow the court system to work more in line with requirements and avoid lengthening delays already faced in these instances.

Understanding Periodic Tenancies
The introduction of periodic tenancies will mean that tenants can inhabit the home until they decide to end the tenancy, by giving two months’ notice. The ending of fixed-term tenancies comes with financial implications for landlords and removes the orderly schedule currently provided by the timeline of Fixed-term Assured Tenancies.

Updated Grounds for Possession
In keeping with the current system, if a tenant is evicted and does not leave, landlords will need to go to court and provide evidence that the grounds for possession are met. For proven mandatory grounds, the court must award possession. For discretionary grounds, the court will consider if eviction is reasonable.

Landlord Rights in Property Repossession
Landlords will still be able to give notice at any point during the tenancy if a tenant is at fault, for example, if they commit anti-social behaviour, damage the property, or fall into significant arrears. Discretionary rent arrears grounds will also still be viable, for example, if rent is repeatedly late. The mandatory threshold for eviction, however, will be increased from two to three months’ arrears, and the notice period will change from two weeks to four.

In a standard case, landlords will only move to sell the property if they need to release the equity. Relating to this, tenants will receive a twelve-month protected period at the beginning of a tenancy, when landlords cannot evict them to move in or sell the home. It is yet to be clarified if the tenant will be permitted to give notice during the first twelve months, affording the same security of tenure to landlords.

According to the bill, landlords’ rights are strengthened when it is necessary to reclaim a property to sell it or move in. When using these grounds, landlords will need to provide four months’ notice to tenants, giving them more time to find a new home. The notice places a higher financial responsibility on landlords and if tenants do pay badly, it does risk allowing them to increase their rent arrears.

Apart from if there are grounds relating to a tenant’s antisocial behaviour, if landlords have not properly protected a tenant’s deposit, or registered their property on the private rented sector database, the bill implies they might be temporarily prevented from gaining possession. However, we are assured that landlords will always be able to rectify non-compliance issues.

Rent Increases and the First-Tier Tribunal Process
Once the new system is in place, all rent increases in the private rented sector will be made using the same process. Landlords will be able to increase rents once a year to the new market rate, and rent review clauses will no longer be permitted. To do this, they will need to serve a prescribed Section 13 Notice, outlaying the new rent, with a minimum of two months’ notice.

If a tenant believes the proposed rent increase exceeds the market rate, they can then challenge this at a First-Tier Tribunal. First Tier Tribunals have been in use for many years. The bill includes reforms, meaning tenants will not be asked for a higher rental price than the landlord has asked for, nor backdated rent increases, with the new rent applying from the date of the Tribunal’s decision. In cases of undue hardship, the Tribunal will also be able to defer rental increases for up to two further months.

As yet, the bill is passing through various stages and in the committee phase, with the first and second readings issued. The next report to The Houses of Parliament is anticipated in late November.

We have every faith in our landlords and our ability to provide customer service that will avoid many of the issues raised by the bill. We are happy to keep you informed on events, but in the meantime, if you’re a landlord who would like some advice, please feel free to get in touch.