What you need to know.  

It’s a very emotive subject; the end of assured shorthold tenancies and the abolition of section 21 no fault eviction notices. But is it as bad as it sounds?

The Renters Rights Bill (‘the Bill’) is intended to provide more stability for tenants, with rolling periodic tenancies that cannot be terminated by landlords save as with certain grounds. The grounds for possession are broadly the same as those in existence, with some alterations to notice periods and the addition of new grounds, which could present a difficulty for tenants.

Key changes imposed by the Bill:

Assured Shorthold Tenancies will be abolished. All tenancies will become periodic based on the rent payments, to a maximum period of one month. Tenancies will essentially become monthly rolling and there will no longer be an initial fixed term.

Gaining possession

The tenant can give 2 months’ notice to quit at any time. Serving a section 21 notice with 2 months’ notice to quit will no longer be an option for the landlord. Section 21 notices will be abolished.

If a section 21 notice has been served prior to commencement of the Bill becoming law, it will still be valid however.

Rather than relying on a no-fault process as before, Landlords must now provide valid and documented reasons for eviction.

Key changes to the grounds for possession include:

• Ground 1; Landlords can require possession for one or joint landlords, their spouse or civil partner, as well as; cohabiting couples, siblings, parents, grandparents, children and grandchildren.

This ground can’t be relied upon within the first year of the tenancy and the notice must provide a minimum 4 month notice period.

• Ground 1A will allow the landlord to gain possession if they want to sell. As above this ground can’t be relied upon within the first year of the tenancy and requires a 4 month notice period.

If the landlord does not go ahead with the sale, the landlord will have to wait 12 months to let the property out again. If this ground is falsely relied upon, the landlord could face prosecution / fine.

• Ground 8, the most common ground used for obtaining possession; rent arrears. The amount of rent arrears required to trigger the mandatory ground will increase from two months to three and the notice period will increase from 2 weeks to 4 weeks.

Landlords can still evict tenants for non-payment of rent, but must provide longer notice periods and may be ordered to accept repayment plans for tenants facing financial hardship.

Other notable changes:

Rent reviews

One of the most notable changes brought about by the Bill is the introduction of caps or limits on how much and how often rent can be increased. Previously, landlords had wide latitude in raising rents. The Bill addresses this by:

• Rent will only be able to be increased pursuant to the statutory procedure contained in section 13 of the Housing Act 1988.
• Rent increases will only be possible at yearly intervals, any attempt to include a contractual rent review will not be valid;
• Landlords will be required to provide a longer notice period of two months before implementing any rent increase.
• Rent can be no more than the market rent and the tenant will not have to pay more than the rent suggested by the landlord.
• The tenant can question the rent increase by applying to the First Tier Tribunal.

Guarantors

Guarantors will no longer be liable for rent if the tenant dies. In cases of multiple tenants; where there are two tenants, for example, the guarantor will not be liable for rent after the last tenant has died.

Pets

The tenant has the right to request permission to keep a pet. There must be consent from the landlord, such consent is not to be unreasonably withheld. A Landlord can reasonably refuse consent to keep a pet in circumstances where it would be in breach of a superior lease.

Where we are now?

The Bill has progressed quickly in its passage to becoming law. The Bill has had its second reading in the House of Lords and is now at committee stage, where detailed examination takes place:

The above information is taken from the UK Parliament website and can be found here Renters’ Rights Bill – Parliamentary Bills – UK Parliament

Summary

Approximately half of landlords that we represent are not landlords with multiple property portfolios, they are smaller landlords within the private rented sector.

During the second reading, concerns have been raised about the practical challenges that could be presented to smaller landlords when seeking to remove problem tenants and the courts’ ability to deal with cases, following the implementation of the Bill, being a major factor.

It is anticipated that the Bill will come into force in the Summer and time is running out to prepare for the Bill as it makes rapid progress through Parliament.

Our property litigation team are experts at providing advice and assistance on residential property matters. Please get in touch if you have any queries. 

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