With the passing of the Renters’ Reform Bill imminent – expected in November 2024 – it is crucial for private landlords in England to consider how the changes will impact them.
Often referred to as the ‘English equivalent’ of the Renting Homes Wales Act 2016, the Bill has already been widely criticised as unfairly stacking the odds in favour of tenants.
Whilst much attention in the media has been drawn to the fact that landlords will no longer be able to unreasonably deny the keeping of pets by tenants, it is fair to say that this is far from a landlord’s primary concern in respect of the new legislation.
Of particular controversy is the proposed abolishment of Section 21 – “no fault” – evictions.
Under the current legislation, English landlords are able to rely upon Section 21 of the Housing Act 1988 to evict tenants (once the fixed term of the tenancy has ended) upon two months’ notice, with no reliance needed on any ‘fault’ based grounds.
This will not be possible following the reform. In fact, the concept of ‘fixed-term’ tenancies will be scrapped altogether in favour of ‘rolling’ periodic contracts.
Consequently, a landlord must rely upon one of several pre-determined ‘grounds’ to recover possession. In effect, there will be an amendment of the grounds contained currently within Section 8 of the Housing Act 1988. Whilst these grounds are intended ensure that landlords can still take the steps they need to in order to obtain possession, the process in practice may not be as straightforward as it sounds.
For example, tenants are set to benefit from a twelve month ‘protected period’ during which they cannot be evicted merely because the landlord wants to sell or move into the property (one of the permitted grounds). In addition to this period, a further notice period of four months must be given to the tenant. In theory, whilst this protection is intended to reduce the risk of tenant homelessness, it begs the question of how potential landlord homelessness and hardship will be addressed moving forward.
Furthermore, penalties for non-compliance with the new legislation are set to be steep. A minor non-compliance will cost a landlord £7,000, whereas serious or repeated violations could cost up to £40,000 or open the door for potential criminal prosecution.
Other key proposed changes include (but are not limited to):
- The introduction of a ‘Private Rented Sector Database’ upon which all landlords must be registered.
- The ability for tenants to challenge ‘unfair’ rent increases and a universal procedure for how a landlord can increase the rent. Rent review clauses will no longer be permitted.
- ‘Awaab’s Law’ which will compel landlords to take immediate and appropriate action if a home is deemed to be in a dangerous condition.
By no means can it be said that all of the proposed changes are unwelcome, but it is clear that landlords must take steps to adapt, and quickly, or run the risk of severe penalties.
For further information about the Renters Rights Bill, please consider the government guidance at: https://www.gov.uk/government/publications/guide-to-the-renters-rights-bill
Berry Smith’s Dispute Resolution team is more than happy to assist with any dispute you may have and is regularly instructed by both business and consumers. Please do not hesitate to contact us on 02920 345 511 or disputeresolution@berrysmith.com