How the New Renters Reform Bill Will Benefit both Tenants & Landlords

The Renters Reform Bill, described by the UK government as “the biggest shake-up of the private rented sector in 30 years,” is now a reality. Among the wide-ranging proposals suggested in the ‘Fairer Private Rented Sector White Paper’ is the introduction of a single system of periodic tenancies and the abolishment of Section 21.

The Renters Reform Bill was first recommended in April 2019. It aimed to eliminate some insecurities experienced by the tenants while private renting in England.

The bill will aim to provide a balance between landlord and tenant. Let’s take a look at what the Bill means exactly for the tenant and the landlord.

The white paper includes series of comprehensive changes to create a Private Rented Sector. It will meet the needs of diverse tenants and landlords. It addresses the following aspects.

Section 21 Evictions

The Renters Reform Bill will abolish the much-debated ‘no fault’ Section 21 evictions. The current agreement allows landlords to serve an eviction notice to tenants without stating any reason. It can be served at the end of the fixed term of a tenancy or on a rolling period tenancy.

The Renters Reform Bill will simplify tenancy structures. Tenants with an Assured Tenancy or Assured Shorthold Tenancy will be moved into a single system of periodic tenancies.

Tenants must provide two months’ notice to quit a tenancy. This will provide landlords time to recover the costs of finding a tenant. It will also help avoid extended void periods.

Under the new reforms, landlords can evict a tenant only in reasonable circumstances as defined in law.

Student properties will be included in this reform.

The new laws will be implemented in two stages. The tenants, landlords, and agents will be given time to understand and adjust to these reforms and facilitate a smooth transition.

Mandatory Ombudsman For Landlords And Renters

The bill makes it mandatory for all private landlords to be covered by a single government-approved Ombudsman. The goal is to resolve disagreements swiftly without taking the issue to court, making the resolution cheaper and fair.

Landlords and tenants will get a streamlined service to deal with various problems. They can use the service to address systemic issues, provide feedback, and offer better support to vulnerable people.

The Ombudsman is empowered to set things right. They can compel landlords to take corrective action where required, issue an apology for poor or faulty service, and/or pay compensation.

Blanket Bans On Benefits

Under the new reforms, landlords and agents cannot refuse tenancy to families with children or those receiving benefits. The court has ruled ‘No DSS or ‘No Benefits’ policies as unlawful discrimination. They go against the Equality Act. The bill will remove this discrimination by:

Encouraging landlords to make renting decisions on individual circumstances.
Working with the insurance industry to clear the misconceptions that arranging insurance for properties where tenants are in receipt of benefits is difficult.
Looking at ways of improving welfare support information for both tenants and landlords.
Helping the needy to make rent payments through their Universal Credit (Managed Payments).
Boosting awareness about the local services available to help those living on a low wage or are receiving benefits.

The Right To Keep Pets

Under the new bill, tenants will find keeping pets in rental homes less of a challenge as it will be unlawful for the landlord to refuse permission unreasonably. The decision of the landlord not to allow pets can be challenged, but there is little clarity on how this will be enforced.

The Tenant Fees Act 2019 will be amended to include pet insurance as a permitted payment. This will help landlords get cover for any damage to their property.

Dogs and Domestic Animals Accommodation Protection Bill

The Dogs and Domesticated Animals Accommodation Protection Bill was placed in parliament last year. The aim was to help pet owners find properties suitable for their needs. The bill also stated that pet owners must have a certificate of responsible animal guardianship. Without the certificate, they cannot have a dog or domestic animals in their rented place.

Changes To Rent Increases And Rent In Advance

The new Bill will put an end to the rent review system. Landlords can increase rents once per year. They must also give two months’ notice if they intend to do any rent change. The bill will prevent any automatic rent increase that may not reflect the current market price.

The bill aims to limit the amount that landlords can ask in advance. Upfront rent payments must be returned if the tenancy ends earlier than the agreed period.

A Decent Homes Standard for the PRS

The Decent Homes Standard is a regulatory standard in the Social Rented Sector but does not apply to the PRS currently. The new bill aims to change that. Under this new standard, private rental properties must have:

Fool-proof protection against health and safety hazards
Sufficient kitchen and bathroom facilities
Adequate noise insulation
Clean and usable facilities
Adequate heating

The bill hopes to raise living standards and ensure that landlords manage their properties proactively. They must not wait for a renter to complain to initiate any corrective steps.

Eviction And Gaining Possession

The Renters Reform Bill will improve the grounds for possession to make them fair and efficient. The bill takes into consideration that circumstances do change for landlords. They may have an urgent financial need to sell the property or move their family into the rented property. However, under any circumstances, they cannot evict the tenant for the first six months of the tenancy.

The bill will deal with repeated arrears seriously. This will help landlords with tenants who pay off some of the arrears and enjoy the two-month mandatory repossession threshold.

If the tenant has been in arrears for at least two months in the previous three years, eviction will be mandatory. This will be regardless of the arrears balance at that time.

The bill will extend the notice period for eviction to four weeks. It will keep the compulsory limit of two months’ arrears when tenants are served notice and at the hearing. Tenants will thus get a reasonable opportunity to pay off arrears without the risk of losing their homes.

New Property Portal For Landlords And Tenants

The government will launch a new Property Portal to provide tenants, landlords, and local councils with easy access to relevant information. There is also a suggestion to incorporate some of the functionality of the Database of Rogue Landlords. All eligible landlord offences will be shared and made public on the portal.

Conclusion:

The Renters Reform Bill is expected to assist both tenants and landlords alike. While the exact extent of these reforms is still unclear, one can foresee sweeping changes to eviction practices and their impact on regaining possession of properties. Tenants can expect better protection from evictions, substandard services, and arbitrary rent increases.

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