Are you concerned about the Renters (Reform) Bill? HF Assist is here to help

Uncertainty over the Renters (Reform) Bill and its impact on the private rented sector has been one of the main reasons why agents have been calling the HF Assist hotline in recent weeks. Here, Julie Ford, HF Assist Advisor and mediator at the Property Redress Scheme Tenancy Mediation Service, offers her take on the Bill.

 

The Renters (Reform) Bill has been hanging over our heads like the sword of Damocles since it was first announced in April 2019.

 

Just over four years later and finally the Bill was published in a lightning mention which was a “blink and you’ll miss it” moment in Parliament (if I’m honest that’s exactly what happened to me).

 

We have since heard a lot in the media about the Bill, much of it negative and claiming it’s the death knell to the private rented sector. So let’s take a look at the Bill as it stands in a bit more detail. But firstly I do need to stress, this is the first version of the Bill. Although some key aspects are set in stone and won’t change, the majority of the Bill is still up for a little tweaking.

 

What do we know about the Bill?

 

We know that Section 21 will be abolished, and we just need to make peace with this and accept there is no going back from this. So what does abolishing Section 21 really mean?

Well, Section 21 is not just the name of a notice, it is actually Section 21 of the Housing Act 1988. This section of the Act introduced Assured Shorthold tenancies to the rental sector for the first time, prior to that we had assured, protected and secure tenancies.

 

Section 21 is commonly known as a ‘no-fault’ notice, because a landlord doesn’t need a reason to issue it. As we all know, landlords rarely issue a notice for no reason, but the process for gaining possession via Section 21 was a much smoother and faster process so many landlords relied on it rather than using Section 8 and grounds that would need to be proved and the tenant had a right to defend.

 

What will the possession process look like when Section 21 goes?

 

So, what will the possession process look like when Section 21 goes? Well, we will see an additional 13 mandatory grounds and one additional discretionary ground introduced under Section 8, but a number of the existing discretionary grounds have been amended. You can find out more about the changes in Total Landlord’s article on this topic, Renters (Reform) Bill: what’s happening to evictions and Section 21?

 

For clarity, mandatory grounds means the court has no choice but to award possession, as long as all the paperwork is correct. Discretionary means it’s up to the judge on the day of the hearing to decide if repossession/eviction is reasonable.

 

Proposed new grounds

 

Now I’m not going to list all the new grounds here, but I will skim over the basics:

 

 

• There will be grounds for landlords who need to sell if the landlord or a family member wants to move into the property, without the provision of it having to have been the previous family home of the landlord

 

• There will be additional grounds for rent arrears where there have been rent arrears over a period of three years

 

These are the two most significant ones that agents need to know about. Most of the new grounds can’t be issued until six months of the tenancy has passed.

 

No more ASTs

 

With the removal of Section 21 of the Housing Act 1988, which introduced Assured Shorthold Tenancies, we will now see tenancies revert back to Assured Tenancies. They will also now be periodic from day one, meaning fixed term tenancies of any length will be illegal and unenforceable.

 

Requests for rent in advice will also be banned, with the Bill introducing a maximum of one-month rental periods or a minimum of 28-day payment dates. This will hit tenants with poor credit the hardest, who would usually be asked to pay three or six months’ rent upfront. It will also impact the student market, who again will pay many months’ rent upfront before the tenancy starts.

 

Tenants will also now be able to give two months’ notice at any point from the start of the tenancy. This could impact landlords whose referencing process is not so robust, and tenants may only be looking for a short term let rather than to make their home.

 

Pets in properties

 

This is the one that seems to have caused most concern and confusion. The Bill states that allowing pets will be an implied term. Implied terms are terms that are not expressly set out in the contract and can be implied by statute law.

 

However, this does not mean the tenant has the automatic right to have a pet and the landlord has no say. On the contrary, the tenant must request the right to have a pet in writing, the landlord has 41 days to make their reply or ask for more information about the pet and although the landlord can’t unreasonably refuse, they can refuse with good reason, such as that their lease prohibits pets, or the property would not be suitable for the size or type of pet. The big change here is to the Tenant Fees Act 2019, where before the landlord couldn’t ask the tenant to pay a third-party payment. Under the Bill landlords can ask tenants to get specialist pet insurance to cover damage and if they refuse this can be a reasonable reason to refuse the let with a pet. (For more information on this topic read mydeposits guide to lets with pets).

 

Lastly but by no means least, as there is still a lot of the Bill that we haven’t covered,

tenancy agreements must be in writing. It will be illegal to let a property with a verbal contract, and a property data base and landlord redress will be introduced, although details on these are still sparse, with more to be delivered later on in the process.

 

Overall, the important thing to remember is that although the Bill is potentially the biggest shake up in legislation that we have had in 30 years, it will not be coming into force overnight and still has to move through Parliament. At the time of going to print, the Bill had still not received its second reading, so I expect we won’t see this become law in 2023.

 

As part of the wider HFIS group, our partner, Total Landlord, will be keeping you up to date with the changes through their Renters (Reform) Bill content hub.

 

At HF Assist we understand that already busy agents are worried about the changes. Agents’ concerns over the Bill mirror what we experienced recently when new legislation was introduced in Wales when we had a surge in calls to our helpline from agents looking for help to comply with the new rules. As we did then, we will be working closely with our members to reassure and offer support.

 

The HF Assist helpline provides practical expert guidance and information from call handlers who have both legal and lettings experience, making sure you are informed and prepared for the changes. Upgrading to an HF Assist Premium subscription provides a 24/7 helpline covering all types of legal issues relating to a letting agent’s business, as well as access to a resources library with useful guides, documents and legal templates. For more information visit the HF Assist website.