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The Renters (Reform) Bill – rebranded as the Renters Rights Bill (RRB) – has now been introduced for its second reading in the House of Lords and is expected to be passed in its current form in Summer 2025.
The RRB proposes a number of significant changes to the private rental sector in England.
This article addresses the key changes of which private landlords in England should be aware, and offers some tips to landlords in anticipation of these changes.
The end of Fixed Term Tenancies
The RRB proposes to abolish fixed term tenancies and replace these with ‘periodic tenancies’. The periodic tenancy will continue indefinitely until the tenant chooses to end the tenancy by giving 2 months’ notice – or the landlord obtains an order for possession.
The new periodic tenancy system will govern all new tenancies, and will also apply to existing tenancies, which will be automatically converted into periodic tenancies.
This means that a landlord could grant a three-year fixed term tenancy to a tenant the day before the RRB is passed, which will then be automatically replaced by an indefinite periodic tenancy terminable by the tenant on two months’ notice the next day.
The end of no fault evictions
Currently, if a landlord wishes to evict their tenants, they have two options.
The first option is under Section 21 of the Housing Act 1988 (the so called ‘no fault eviction’) and allows landlords to evict their tenants after giving two months’ notice. There is no requirement for the landlord to give any reason or cite any fault on the part of the tenant.
The second option is under Section 8 of the Housing Act 1988 (the so-called ‘fault based eviction’) and allows a landlord to evict their tenants after giving as little as two weeks’ notice. The landlord must prove that one or more of the grounds in Schedule 2 of the Housing Act 1988 apply.
The RRB proposes to abolish the no-fault Section 21 process. Landlords will instead need to prove that there are one or more grounds on which to bring the tenancy to an end.
More Grounds for Possession
The grounds provided under the RRB are essentially an enhancement of the existing grounds for possession that can be found in Schedule 2 of the Housing Act 1988 that are used for Section 8 “fault based” possession proceedings.
The current grounds set out in Schedule 2 are separated into ‘mandatory’ grounds and ‘discretionary’ grounds. Where a landlord can prove a mandatory ground for possession, a court must order possession. Where a landlord can only prove a discretionary ground, a court can take this into account when deciding whether or not to order possession.
The RRB proposes some new mandatory grounds for possession. These include the sale of the property by the landlord, possession by a superior landlord or where a superior lease has come to an end. There are no new discretionary grounds for possession.
Longer notice periods
Some of the notice periods for grounds that already exist under the Section 8 procedure will be extended under the RRB.
The most common grounds cited in Section 8 possession proceedings – grounds 8, 10 and 11 relating to rent arrears – currently require a landlord to give two weeks’ notice to a tenant before the landlord can issue court proceedings. The notice period for these grounds will be increased to four weeks under the RRB. Mandatory ground 8 will only kick in when three months’ rent is in arrears, rather than the current two months of arrears.
The notice period for a landlord who wishes to move into the rented property themselves will increase from two months to four months. The requirement for the landlord to have given prior notice of their intention to rely on this ground before the commencement of the tenancy has not changed.
Some of the notice periods will remain the same. These include grounds relating to disrepair, breach of covenant and anti-social behaviour.
More regulation
The RRB proposes to introduce a Private Rented Sector Landlord Ombudsman, which all private landlords will be required to join. The Ombudsman will have the power to bind the landlord with its decisions, and there are significant civil and criminal penalties for landlords who either fail to join the Ombudsman, or fail to comply with the Ombudsman’s decisions.
The RRB also proposes a Private Rented Sector Database with which all private landlords will be required to register. Again, there are significant penalties for landlords to fail to register with the Database.
Decent Homes Standard and Awaab’s Law
Similar to those that already exist in the social housing sector, the RRB proposes to introduce certain requirements relating to the repair and condition of privately rented properties.
The ‘Decent Homes Standard’ will set a minimum standard for properties that are privately rented, and will give councils the power to issue penalties to landlords whose properties fall below the prescribed standard of repair. Currently, only the courts have the power to impose sanctions on landlords for disrepair.
‘Awaab’s Law’ (so named after Awaab Ishak, the child who tragically died after exposure to mould in his social home) will require landlords to address issues such as damp and mould within a certain timeframe, failing which, tenants can bring enforcement proceedings in the courts.
Rent Reviews
Under the RRB, landlords will no longer be able to rely on rent review clauses in tenancy agreements.
Instead, landlords will be able to increase rent once per year, to the market rate, by serving a notice pursuant to Section 13 of the Housing Act 1988, giving 2 months’ notice to the tenant of the increase.
If the tenant does not agree to the proposed rent increase, they can challenge the rent increase in the First Tier Tribunal. If it turns out that the landlord’s proposal was actually under the market rate, the Tribunal cannot order the new rent to be more than the landlord proposed. The new rent will be applicable from the date of the Tribunal determination – meaning that the increased rent cannot be backdated.
Other Points to Note in the RRB
Landlords will not be able to refuse a tenant’s request to keep a pet (although they can require the tenants to obtain Pets Insurance before granting a tenancy).
Landlords will be required to publish an ‘asking’ rent when marketing their property, which they must stick to. They will not be able to use bidding wars between prospective tenants as a way of driving up rent.
Landlords will only be allowed to take a maximum of one months’ rent up-front after granting a tenancy to a new tenant. No rent at all can be taken until a tenancy agreement is signed.
What should I do now if I am a landlord?
If you are planning on granting a new tenancy to a prospective tenant, or have existing tenants in occupation under assured shorthold tenancies, consider the implication that the RRB may have on the terms, and particularly the length, of the tenancy. It is expected that all tenancies will become periodic tenancies terminable on two months’ notice by the tenant. There will be no way for you to guarantee that a tenant stays in your property for a specified length of time. This may be particularly relevant if you have a buy-to-let mortgage that requires tenancies to be granted for a minimum period of time.
If your property is sitting empty, and you know there are issues with disrepair (including damp and mould), make sure these are dealt with before you let your property to a new tenant. The Decent Homes Standard and Private Rented Sector Landlord Ombudsman will make it difficult for landlords to avoid liability for disrepair following a complaint from a tenant. Similarly, if your property is already let, and you are aware of issues with disrepair, address these issues as soon as possible.
If you are about to market your property, set your rent at a competitive but realistic rate. If and when the RRB is passed you will not be able to rely on a bidding war to secure higher rent if you are letting in a popular area, and you will not be able to unilaterally increase your rent without following the Section 13 procedure.
If you have been contemplating serving a Section 21 notice on your tenant, now is the time to do so. Make sure that you have complied with all of the necessary pre-conditions before doing so: you do not want to get to court and lose your claim (and opportunity to recover possession of your property) because you forgot to send your tenant one of the prescribed documents.
It is always best to contact a solicitor when contemplating possession proceedings.
Please contact our office on 0161 832 3304 and we would be happy to discuss any queries you may have.