Calling all landlords – Renters Reform Bill to be introduced in 2023

In the final months of 2022, the Secretary of State for Levelling Up, Housing and Communities, Michael Gove, announced that the highly anticipated Renters Reform Bill (RRB) would be introduced in 2023. This means that landlords in the private rented sector should be acting now to prepare themselves for the changes set to be brought in by the new legislation, first announced by the government in June 2022 in its white paper, A fairer private rented sector.

A private rented sector ‘fit for the 21^st century’

The RRB proposes sweeping changes that are set to transform the private rented landscape, including (but not limited to):

• Abolishing Section 21 notices, which currently allow landlords to evict tenants without giving a reason.
• Applying the Decent Homes Standard (i.e., minimum standards that homes are expected to achieve, which has until now only applied to social housing) to the private rented sector for the first time.
• Introducing a Property Portal for landlords that is set to be “a trusted one-stop shop for guidance on renting in the PRS”.
• Introducing a housing ombudsman that will enable landlords and tenants to settle disputes out of court.
• Scrapping fixed-term tenancies in favour of periodic tenancies, meaning that tenants can leave when they want to (subject to two months’ notice).

In an interview on Radio 4 on 25 November 2022, Mr Gove commented: “It is vitally important that we stand up for tenants. Everyone has a right to a home fit for human habitation and in doing so we will bring forward legislation that will give them better protection.”

Preparing for the changes

Landlords will be subject to a range of new responsibilities and requirements when the RRB comes into force – it’s therefore vital to get prepared ahead of the changes to ensure you don’t fall foul of the law once they are introduced.

Below, we have outlined some of the most significant changes that landlords should be getting ready for.

Section 21 notices

‘No fault’ evictions will be abolished, meaning that landlords will only have recourse to the Section 8 ‘fault-based’ eviction process. Current grounds for repossession include criminal or antisocial behaviour, serious rent arrears or a breach of the tenant’s contract, among others. To ensure that this process continues to work effectively for landlords with genuine grounds for repossession, the Renters Reform Bill proposes the addition of several new grounds, including:

• Repeated serious arrears – under current legislation, a court can only grant a possession order if a tenant is in at least two months’ arrears both when the notice is served and at the court hearing. This means that tenants who repay their arrears ahead of the court hearing cannot be evicted. The RRB proposes a new ground that will allow landlords to evict tenants who have been at least two months in arrears at least three times over a three-year period, no matter how much they owe at the hearing.
• Selling the property – this new ground will enable a landlord to repossess if they intend to sell the property.
• Family moving into the property – currently, there is a ground that allows landlords to repossess the property for the purpose of living there. The amended ground would also allow repossession if close family members intend to move into the property.

Decent Homes Standard

If you are renting a property that doesn’t currently comply with the Decent Homes Standard (around 21% of properties in the private rented sector, according to government figures) – now is the time to make improvements. The Decent Homes Standard stipulates that homes must:

• Be free from serious safety hazards, such as fire risks and carbon monoxide poisoning
• Be in a reasonable state of repair
• Have reasonable facilities and services
• Provide a reasonable degree of thermal comfort.

These requirements are further outlined on the government website, so it’s always wise to take a look if you are unsure.

Property portal

Although it is not fully clear how the new property portal will work, we do know that all landlords will be required to register their property on the portal. Landlords in Scotland and Wales already have to do this; Welsh landlords also have to apply for a licence and undertake training in order to manage a property.

It is not expected that English landlords will have to become licensed; rather, the portal will serve as a source of guidance for landlords on how to fulfil their various responsibilities towards their tenants. The government’s white paper also suggests that landlords will be required to provide details on the portal of how their properties comply with a range of regulatory requirements.

The Private Renters’ Ombudsman

A new Ombudsman will be set up to provide tenants with additional protection if they have a complaint or dispute with their landlords. It will be mandatory for landlords to belong to the Ombudsman (similarly to existing redress schemes for residential property agents). The service will aim to “tackle the root cause of problems, address systemic issues, provide feedback and education to members and consumers, and offer support for vulnerable consumers.”

This Ombudsman will be granted powers to “put things right” for tenants, which may include:

• Apologising to the tenant
• Providing them with the requested information
• Taking remedial action
• Paying the tenant compensation of up to £25,000.

Taking legal advice now could avoid repercussions later

The RRB has been touted as the biggest shakeup of the private rented sector in a generation

.With so many sweeping changes set to be introduced, it is vital to take professional legal advice if you are unsure to avoid accidentally falling foul of the law.

For specialist guidance on preparing for the RRB, please get in touch with our lawyers on [phone number] or email [email address] and we’ll be happy to advise you.