What the Renters Reform Bill means for landlords and tenants

The Renters Reform Bill is a robust attempt by the Government to ensure that privately rented properties are of a decent standard and safe. It is anticipated that it will come into force within 12 to 18 months’ time.

The Bill has been sensationalised in the media as bad news for landlords with the proposed abolition of no-fault evictions meaning a landlord will have to have a valid reason to evict tenants and not just give them 2 months’ notice when they want them to leave.

Although it is clearly beneficial for tenants, the mechanisms for obtaining possession if a tenant stops paying rent, breaches the tenancy or is antisocial will remain in place and indeed some will be enhanced. It is being proposed that new grounds will be added so that a landlord can recover possession if they need to sell the property or if a family member wants to move in.

The aim of the Bill is to introduce decent standards in rental accommodation, abolish the no-fault eviction process currently in place, introduce an Ombudsman to which disputes between landlords and tenants can be referred to and dealt with more quickly and cheaply than via the courts. It is anticipated that the Ombudsman will have the power to make decisions in a dispute, compel the landlord to carry out remedial works and award compensation. At present, such disputes in the court can take a year to reach trial and are costly.

The Bill will make it illegal to refuse a tenancy to those with children or those on benefits. Landlords will have to have a good reason for refusing pets although they will be able to insist on pet insurance to cover any damage.

In addition to this, the Bill proposes to make it easier to evict anti-social tenants, widening the activities and conduct on which landlords can rely. It also aims to digitise the court possession process, speeding it up as well as introducing new grounds for obtaining possession when selling or family members wishing to occupy the property.

Landlords are going to have to ensure that their properties are in a satisfactory condition, inspected regularly, and are well maintained. They will have to ensure they have relevant licences and safety certificates in place, as they are required to do now, but it is likely to be addressed by tenants and referred to the Ombudsman more readily. Landlords will not have to carry out repairs where the tenants have been negligent or have caused damage. Tenants will remain liable for such issues.

The aim, the Government says, is to drive poor landlords out with Banning Orders issued by the Local Authority preventing criminal landlords from renting out properties again following a finding against them.

At present, the no-fault eviction process is not always easy for landlords to use as the media would suggest. There has to be compliance with the various obligations in respect of deposits, gas safety, energy efficiency, providing a How to Rent Guide leaflet and licensing. There must also be no unlawful fees and deductions and no Local authority Improvement Notice of Emergency Remedial Notice served on the landlord. Although a landlord can provide some of these documents to the tenant before service of the no-fault notice, if there was no gas safety certificate in place at the start of the tenancy (with the inspection taking place before the tenant moves in), it’s game over. The claim will not succeed.

The current alternative Section 8 proceedings (under the Housing Act 1988) which is grounds-based, where a landlord can bring a claim for unpaid rent or breaches of the tenancy does not require compliance with any of the previous paragraph to succeed in a possession claim. A tenant can defend the claim and counterclaim against the landlord for compensation for disrepair.

It is likely that some of the requirements of the no-fault evictions will be incorporated into the Section 8 process following the enactment of the Renters Reform Bill. We await further details.

If a landlord rents out a property, they should ensure that they regularly inspect it, carry out necessary repairs and arrange safety inspections in good time. All documents should be provided to the tenants. This vigilance will ensure that the property retains its value as well as complying with statutory obligations. A well-worded tenancy agreement, very detailed inventory inspection and thorough checking of tenant references should mitigate any disputes going forward.

For more information contact Jacqui Swann on 01935 846254 or email jacqui.swann@battens.co.uk