Renters Reform Bill 2022

A fairer Private Rented Sector (PRS) white paper published on 16 June 2022 states that the legislation of the Renters Reform Bill will be brought forward in this Parliamentary session. Renters Reform Bill aims at improving standards in the PRS, by providing more security for tenants while ensuring landlords retain certain rights to possession of their property.

WHAT YOU NEED TO KNOW

Landlords need to understand that the elements of this Bill will affect them and be prepared for the changes. Here are the main topics that will impact landlords:
• Decent Homes Standard (DHS)
• Evicting tenants
• Rent review and limited rent increase
• A new Ombudsman and a new portal
• Renter’s rights

DECENT HOMES STANDARD (DHS)

For the first time, the Bill will require privately rented homes to meet the Decent Homes Standard, which used to exist only in the Social Rented Sector. By ‘decent’, a home is required to be free from the most serious health and safety hazards. A property is considered a safe and decent home if it meets the following four criteria:
• It meets the current statutory minimum standard
for housing.
• It is in a reasonable state of repair.
• It has reasonably modern facilities and services.
• It provides a reasonable degree of thermal comfort.
In the past decade, steps have been taken to raise
property standards. These include:
• requiring smoke alarms fitted on every floor of the
property;
• requiring a carbon monoxide alarm fitted in any
property containing a solid fuel burning appliance;
• instructing an Electrical Safety Installation Condition
Report (EICR) to be carried out every five years; and
• setting a Minimum Energy Efficiency Standards
(MEES) for domestic private rented properties.
Furthermore, the government plans to upgrade as many homes as possible to EPC Band C by 2030. Should your property not fall within this range, you ought to consider improving it to meet this new standard.
Local councils will also be granted more powers to enforce the DHS and take action against landlords that do not comply.

EVICTING TENANTS

In England and Wales, evicting tenants is currently achieved through Section 21 notices and Section 8 notices. However, the Renters Reform Bill will change this completely.
THE ABOLITION OF SECTION 21
Assured Shorthold Tenancies (AST) are the most common form of tenancy in England. In this case, if landlords wish to seek possession of their property after the fixed term of the tenancy, they can advise a Section 21 notice, which is also known as ‘no fault’ evictions.
Under the Renters Reform Bill, the Section 21 ‘no fault’ evictions will be abolished. The periodic tenancy will entirely replace the fix-term tenancy. Should the tenants want to leave a tenancy at any time, they only need to provide a two months’ notice.
We will inform you in advance when this transition takes place.

REFORMED GROUNDS FOR POSSESSION

When the abolition of Section 21 comes into effect, landlords will only be able to use a Section 8 notice to regain possession of their properties. The existing grounds detailed in current legislation and the relevant notice period will be overhauled, and more new grounds will be introduced to alter the system.
• Selling or moving into the property
After the first six months of a tenancy, should landlords wish to sell their property or wish to move into it, they are able to gain possession with a two months’ notice.
• Tenants in rental arrears
A new mandatory ground for repeated serious arrears will be introduced. Therefore, landlords can evict tenants if they have been in at least two months’ rent arrears three times within the previous three years. However, the notice period for the existing rent arrears eviction ground will be increased to four weeks.
• Criminal or anti-social tenants
In cases of criminal behaviour or serious antisocial behaviour, the current notice period will be reduced.
For all the mandatory grounds, if the landlord can prove that the ground has been met, the judge must grant possession. The white paper states that more grounds for possession will be introduced to support responsible landlords to manage their properties.

RENT REVIEW AND LIMITED RENT INCREASE

The use of rent review clauses in the tenancy agreement will not be supported anymore. To make the changes in rent predictable, landlords will be only allowed to increase rent once per year with a minimum of two months’ notice. Where the tenants believe the increase is unjustified and disproportionate, they can pursue remedy from the First-tier Tribunal.
In the circumstances that tenants are charged multiple months’ rent in advance of a tenancy, the amount of rent that landlords can ask for will also be limited.

A NEW OMBUDSMAN AND A NEW PORTAL

A new Ombudsman will be created to settle disputes between tenants and landlords at a low cost and without going to court. All private landlords must join this Ombudsman. Decisions made by the Ombudsman are binding on the landlords.
Landlords are legally required to register their property on the new digital portal. This will
allow tenants and the local council access to the information about your property and whether it is in line with the legal requirements. Your compliance demonstrated on the portal can benefit the rental of your property.

For further reading on GOV.UK page click HERE