The Renters Reform Bill: what does it mean for landlords?

Landlords. Historically speaking, they are a class of people who are least likely to generate any sympathy and the most likely to be on the receiving end of quite a lot of antipathy. The old Rent Act 1977 assumed that all landlords were unscrupulous thugs, regardless of their behaviour. The Housing Act 1988 introduced the Assured Shorthold Tenancy, by which the pendulum swung back to the landlords, perhaps recognising the important role that good landlords play, not just in the housing market but also in the wider economy.

But now the pendulum is about to swing against landlords again with the Renters Reform Bill. According to the UK government, there are some 4.4 million private renting tenants in the UK and the government intends to use the new law to “shift the balance” between these tenants and their landlords. The Bill follows on from the Renters Reform White Paper which was published in June 2022. Here are the key measures.

A new, decent homes standard

According to the government, something like 1.6 million tenants currently live in low-quality homes which are poorly constructed or maintained, hazardous or pose an immediate risk to the resident’s health and/or safety. In order to combat this, the ‘Decent Homes Standard’ that currently only applies to the social rented sector will be extended to cover the private sector.

It will impose a duty upon private landlords to ensure that the properties they let are equipped with an adequate kitchen, bathroom facilities, heating, noise insulation and are free from any serious health or safety risks. This means mandatory smoke, fire and carbon monoxide alarm systems. For the majority of good landlords, this is unlikely to present any issues.

Eviction and gaining possession

Under Section 21 of the Housing Act 1988, all landlords have the right to serve a ‘no-fault’ notice to quit upon their tenants. If the tenant refuses to leave, the landlord may seek a possession order from the court which is mandatory, i.e., the court has no discretion to refuse the landlord’s application. Under the new law, this ‘no-fault’ eviction procedure will be banned. In fact, the government will abolish all assured tenancies and assured shorthold tenancies in favour of a single periodic tenancies system.

Tenants who wish to move out will be obliged to give the landlord two months’ notice. Landlords will be allowed to evict tenants in “reasonable circumstances” but, so far, this term remains undefined. Replacement mandatory grounds for possession will be introduced for landlords who want to sell the let property or move into it themselves. There are also plans for mandatory grounds for possession for repeated and serious arrears of rent, although not without giving the tenants a fair chance of paying off their arrears first. Further details are awaited.

Until these grounds are all properly defined, it is very difficult to assess the impact upon landlords, particularly those who have maybe one or two properties to let and simply don’t have the financial resources to fight protracted legal battles over, for example, rent arrears.

Other new rules and measures

Although other measures may be rolled out as part of the Renters Reform Bill timetable, here is what is sure so far:

• All tenants will be furnished with a new right to keep pets and a landlord will not be entitled to unreasonably refuse a tenant the right to keep a pet. The landlord will, however, be able to insist that the tenant take out a suitable pet insurance policy to cover any damage that the animal may cause to the home.

• Rent review clauses will also be abolished. Landlords will only be able to increase rents once a year, and they must provide the tenant with two months’ notice of any such increase. Furthermore, the amount of rent the landlord may require in advance will be limited too.

• Landlords will no longer be allowed to impose ‘blanket bans’ upon whole classes of prospective tenants, e.g., families with children or people on state benefits.

• The new law will also herald a new ombudsman who will have jurisdiction over all private landlords and will be empowered to force landlords to apologise, provide information, fix outstanding problems with the property and, in lieu, pay compensation to the tenant of up to £25,000. Membership of the ombudsman scheme will be compulsory for all private landlords.

• As part of the new law, the government will also introduce an online portal that will act as a one-stop-shop for landlords, tenants and local authorities. The portal will contain information on a landlord’s responsibilities and a database of rogue landlords, which will be used to “name and shame” landlords who break the law.

Help for landlords is available

It is clear that the Renters Reform Bill represents the most sweeping change to the residential property sector for over 30 years. While many details are yet to be announced, a lot of ‘smaller’ private landlords may be concerned that the Bill represents a return to the bad old days of the Rent Act when it was next-to impossible to evict a bad tenant no matter how delinquent they were. This could lead to a dramatic contraction of the number of properties available for rent as private landlords turn to alternative income strategies such as short-term holiday lettings. If you are a private landlord, then it is highly recommended that you take advice from a professional who can keep you abreast of the Renters Reform Bill progress and appropriate steps you can and should take in response.

For further information and trusted legal advice regarding residential property matters or landlord and tenant matters, get in touch with our property lawyers in London at Carlsons Solicitors.