Has the Government managed to strike a fair balance between the rights of landlords and tenants with new legislation? Does the Renters’ (Reform) Bill forget the rights of the landlord, or does it simply offer more protection to tenants?
The Renters’ (Reform) Bill 2023
Over the last five years, the Government has worked in depth with landlord and tenant groups to establish the Renters’ (Reform) Bill 2023, introduced on 17 May 2023 and at the time of writing on its second reading in the House of Commons.
The Abolition of Section 21 Notices
The headline issue grabbing the most attention at the moment is the proposed abolition of the ‘No Fault’ Eviction, otherwise known as a Notice served under Section 21 of the Housing Act 1988. Currently, a Section 21 Notice allows landlords of Assured Shorthold Tenancies (ASTs – the standard tenancy agreement which is defaulted to unless otherwise specified within the agreement) to evict their tenants either after the end of a fixed-term tenancy, or during a periodic tenancy, in spite of the tenant having observed and complied with all the terms of their tenancy.
Understandably, landlords are concerned that their properties will cease to become their own and that they will be saddled with perpetual tenants who have an entitlement to remain as long as they continue to abide by their tenancy agreements. It should be no surprise therefore that the amount of Section 21 Notices being served on tenants before the Bill is enacted is predicted to rise sharply, with some landlords preferring to evict their tenants and sell up rather than risk being stuck with tenants they fear they will be unable to get rid of.
This in turn has a knock-on effect on the amount of rental properties still on the market, which will likely diminish during this period of change. Accordingly, rents will continue to rise in line with the demand which, coupled with the ongoing cost of living crisis, does not make for a tenant-friendly rental market.
Section 8 Notices and Wider Grounds for Repossession
However, it’s not all bad news for landlords or tenants. Firstly, the landlord’s power to evict tenants who are in breach of the terms of their tenancy agreement (known as a Section 8 Notice) will remain and the Bill aims to make it easier to evict tenants who repeatedly default on their rent or participate in anti-social behaviour. Additionally, for landlords who wish to sell their rental properties, or use them instead for family, wider grounds for repossession of the property will be introduced to give them the freedom to do so.
The Private Rented Sector Ombudsman and The Right to Request Pets
Tenants will also benefit from the proposed introduction of a Private Rented Sector Ombudsman, which will shoulder a lot of responsibility for the private rental sector and oblige all residential landlords to join. Suggested powers of the Ombudsman include requiring landlords to make apologies or provide requested information, to order compensation of up to £30,000 to be payable to tenants, rent reimbursement where the property falls short, and the ability to make binding decisions.
Although some are concerned that the deck feels stacked against landlords as a result, tenants will be empowered by having improved access to recourse against landlords who fall short of the legal standard required instead of resorting to costly and time-consuming legal processes involving the Property Tribunals or County Courts. This will hopefully contribute to a more competitive rental market, comprising more responsible landlords and more confident tenants as a result.
In a final quid pro quo, the Bill also suggests giving tenants the right to request pets in their properties, which landlords are required to consider and not to unreasonably refuse permission. In support of this landlords will be given the ability to require corresponding pet insurance with adequate coverage to safeguard any damage caused to their property as a result.
What Next?
The Bill is currently with the House of Commons, so it may be a while before we see the final result, or any movement on the current situation. However, with positives and negatives for both sides, perhaps we’re starting to see a shake-up of the rental sector, rewarding landlords and tenants alike.
This insightful article was written by our experienced Paralegal Beth Parker. If you would like to gain more information on the Renters’ (Reform) Bill 2023 or wish to contact one of our specialist Dispute Resolution Solicitors click here.