It is finally here, a mere five years from first being promised. The Renters (Reform) Bill has started its parliamentary journey today (17 May). As it stands, it is the largest reform to tenancies in England since 1988 (Wales having done its own, even more significant, thing).
This is part 1 of a quick look at the major elements of the Bill as it stands. There may well be amendments and additions on its passage – there are certainly some parts in the Bill that are clearly of recent addition – and also chunks of it will require subsequent regulations to be made for the detail. So this is not a detailed ‘how it works and every question answered’, more of a quick guide to the landscape, some fearures, and some questions about nooks and crannies – Part 1.
Starting with the headlines…
There will be no such thing as an assured shorthold tenancy.
There will be no such thing as a fixed term assured tenancy.
There will only be periodic assured tenancies with a period not in excess of one month. (Secure and Rent Act tenancies aside. This is for Housing Act 1988 assured tenancies only.) Existing rent periods that have a period of greater than 28 days (unless of one month) will be recalculated by a formula to meet this requirement.
I’ll come back to the transitional provisions below tomorrow, when I’ve figured them out, as there are questions.
There is a rather neat solution for the long lease/shared ownership as assured/assured shorthold tenancy problem (see here and here). A lease of more than 7 years cannot be an assured tenancy. So, no matter what the rent/ground rent, a long lease will not be an assured tenancy and forfeiture rules, rather than schedule 2 HA 1988 grounds of possession will apply. This is a very good thing. Whether shared ownership leaseholders have the right to manage/statutory lease extension/enfranchisement – that is a separate issue which was before the Court of Appeal last week.
Rent provisions – (other than for social rent assured, here called ‘relevant low cost tenancies). Rent can only be increased every 12 months via section 13 Housing Act 1988 (as will be amended), requiring two months notice. The tenant can either agree the increase, or apply to the Tribunal for a determination. This is, as now, in view of prevailing market rent in the area, so of very limited use. (The wording on a proposed new s.13(4A) could be improved for clarity, as it might be read as requiring a Tribunal determination before a rent increase becomes valid). Any rent increase clause in a tenancy agreement is of no effect.
Grounds of possession – there are some big changes – but there will be a statutory form of notice. For grounds 7A and 14 (or both), the court cannot make an order for possession to take effect within 14 days of service of the notice. For other grounds (if 7A or 14 not specified), the notice periods are:
New and changed grounds of possession (in schedule 3) are:
Ground 1 (amended) – property required for landlord or family member to live in as principle or only home. Can only be notice served after 6 months. Requirement for notice prior to start of tenancy that this ground may be used removed. Relevant family members are:
(a) the landlord;
(b) the landlord’s spouse or civil partner or a person with whom
the landlord lives as if they were married or in a civil 15 partnership;
(c) the landlord’s—
(i) parent;
(ii) grandparent;
(iii) sibling;
(iv) child;
(v) grandchild;
(d) a child or grandchild of a person mentioned in paragraph (b).
If the landlord uses this ground of possession and if the tenant leaves after service of the notice on this ground, then the landlord cannot let or advertise to let the property for the next 3 months. If the landlord does let inside the three months then the Local Authority may impose a financial penalty of up to £5000 or prosecute for a criminal offence. The fine may be recurring if the contravention continues for a further 28 days.
This is sadly feeble (and the same applies to the following ground 1A). I had hoped lessons might have been learned from Scotland where the equivalent ground has been abused often. Who is going to tell the LA there has been a breach in most circumstances? It wholly relies on the former tenant noticing. The ground does not require any real evidence of intention. This is weak and will be abused.
Ground 1A – Landlord intends to sell. Can’t be within 6 months of start of tenancy (unless a compulsory purchase order involved) and not for social landlord (that is new ground 1B for ‘rent to buy agreements’ which is substantially similar). At least two months notice. The same can’t re-let within 3 months provision and penalties.
Again, sadly lacking in requirements for evidence, sadly lacking in route for enforcement of any breach of the ‘no re-let within 3 months’ rule’ except where former tenants notice and report. Has been abused in Scotland and will be here.
Ground 2 – possession where mortgagee requires possession to sell is amended to remove the requirement that the mortgage was entered into before beginning of the tenancy. So the lender is no longer required to accept a tenancy that started before the mortgage and the landlord can get possession f the lender is demanding vacant possession for a sale. This is perhaps inevitable where if the lender became the landlord, they could not use section 21, or where the lender could not otherwise make the landlord deliver up the property vacant for sale.
New ground 2ZA – landlord has tenancy from superior landlord which has had valid notice served, or superior tenancy will end within 12 months, but only applies for registered provider/supported accommodation provider/agricultural tenancy landlord/company 50% owned by an LA.
New ground 2ZB – where landlord became the landlord under s.18 HA 1988 and the previous landlord was a registered provider/supported accommodation provider/agricultural tenancy landlord/company owned 50% by an LA, and it is within 6 months of the new landlord becoming the landlord.
Ground 3 holiday accommodation is scrapped.
Ground 4 – accommodation previously let by an educational establishment to a student. Has anyone ever used ground 4? Ever? If so, it remains, tweaked for the new regime.
Grounds 5A and 5B – employment related accommodation for agricultural workers and employees of registered providers respectively. Tenant no longer fulfils work related requirements and property needed for another employee.
New ground 5C – was ground 16, but now a mandatory ground. Landlord is employer letting property to employee for work related purposes and employment/purpose has ceased.
New ground 5E – landlord requires possession to let property as supported accommodation where a) the dwelling was held for that purpose and b) tenant did not enter tenancy for the purpose of receiving care, support or supervision at the dwelling. This one needs close attention, I think.
New ground 5F – also supported accommodation. Time limited support services, or time limited funding for support, which has ended. Or tenant doesn’t need support services, or adaptations to property, or property is physically unsuitable for tenant. Again, this needs scrutiny.
New ground 18 (discretionary ground): “The tenancy is of supported accommodation and the tenant has unreasonably refused to co-operate with the person providing support services with regard to those services.”
New ground 5G (back to mandatory): Grant of tenancy was in pursuance of LA’s duty under s.193 Housing Act 1996 (the ‘suitable accommodation’ full homelessness duty) and LA has told landlord accommodation no longer required under that duty, and the notice expires no more than 12 months after that notification. To which I can only say, what?!!
New ground 6A – compliance with enforcement action. (Again a mandatory ground). Allows for notice where landlord would be in breach of some form of enforcement notice or has been refused licensing, specifically:
- Landlord would breach a banning order
- Landlord would breach an Improvement Notice under HA 2004 where the hazard is overcrowding
- There is a prohibition order on the property or common parts.
- Dwelling requires a licence and the landlord’s application has been refused.
- Number of occupants exceeds the maximum specified in the licence.
While the logic is there – the properties cannot be legally occupied in their present form of occupation, this does feel like punishing tenants for the landlord’s unlawful actions.
Ground 8 – there is a change to the mandatory ground 8! As far as the two months/8 weeks arrears at date of notice and date of hearing go, there is to be this disregard:
if the tenant is entitled to receive an amount for housing as part of an award of universal credit under 15 Part 1 of the Welfare Reform Act 2012, any amount that was unpaid only because the tenant had not yet received the payment of that award is to be ignored.
That will clearly cover any initial delay to payment of a UC award, but I think arguably any later delays in UC payments to which the tenant is entitled.
However, before anyone gets too excited about that change, there is also a new mandatory ground 8A, and this one is a big one.
If rent arrears of more than two months/8 weeks have been unpaid on at least three separate days in a period of three years(!) before service of a notice on this ground. Separate days means that arrears had gone below 2 months/8 weeks between each day.
Again the ‘not yet received UC payment to which tenant entitled’ disregard applies.
This is a very, very tough ground. The three year period seems excessive to me. Someone could have had several crises over a three year period, but on each occasion paid of the arrears in full, but still be subject to a mandatory possession claim. This covers far more than ‘persistent arrears’ or the announced purpose of avoiding people allegedly avoiding ground 8 by paying arrears below two months whenever at risk.
Ground 14 – the ASB discretionary ground. ‘likely to cause nuisance or annoyance’ is amended to ‘capable of causing nuisance or annoyance’. I am bewildered. How can conduct be capable of causing nuisance or annoyance if it isn’t likely to cause it? Is there seriously any change here? Anyone?
And… breathe. Look at some flowers. Maybe have a cup of tea and a biscuit.
Part 2 coming tomorrow with potential compulsory private landlord membership of a redress scheme and potential compulsory landlord registration on a ‘portal’.Yes, two forms of national landlord licensing are enabled – complete with potential civil and criminal penalties for failure to comply. Oh and a right to ornamental pets for tenants.
Also there are potential new regulations to address ‘rent to rent’ set ups and evading enforcement, new enforcement bodies and of course the transitional provisions.
I’m surprised that enforcement for landlords abusing grounds 1 and 1A is entirely on local authorities. You would have thought there’d be some means for the tenant to seek damages themselves. I mean using deception to evict the tenant via ground 1/1A is really all that different from breach of covenant at the end of the day.
It makes no sense. LAs won’t know unless told by former tenants. Former tenants have no incentive to even check.
It would be better if made an offence for the purposes of a RRO
Agreed, that would be the obvious option. A year’s rent rather more of a deterrent than the low risk of a £5000 fine.
It would appear here that all Landlords are nefarious devious devils. Actually, the vast majority of landlords are small landlords who look after their properties and tenants.. Problems in the private rental sector are overwhelmingly at the bottom slum end of the market and caused by lazy social policies of paying rent benefits on size
of property rather than quality. Decent landlords who let to benefit claimants and maintain their properties thereby make less profit than slum landlords. Reform of rent benefit could address that.
As for the idea that landlords are currently willy nilly refusing to renew tenancies… Get real. Why get rid of a paying tenant? Private sector rentals we’re never meant to provide long term housing for the poor. The gross failure to build enough Council housing when demand has grown combined with lazy rent benefit policy has created problems that all landlords are now being castigated for. Many landlords are leaving
while demand is rising. Abolishment of fixed term tenancies should be gradual.. Maybe, first, all tenancies 3 years.. Then five.. And then permanent. That would allow small landlords to be brought out and large investors to ‘build to rent’ without massive disruption to the private rental market.
The new ground 18 came out of nowhere and will be a bit of a bastard, given that in many instances, those placed in such accommodation will often have problems of one sort or another and that phrase known only to housing and homelessness types “Chaotic lifestyles”, often making it difficult to engage.
And as for ground 6A, general gnashing of teeth………landlords served with these notices often try arguing justification for vacant possession and their inability to get it is fertile ground for out of court settlements and the principle in Critchley v. Clifford of a person not being allowed to benefit from their own wrongdoing gets spun on it’s head and becomes the very basis of a possession claim.
Agreed on both.
It’ll be interesting to see what guidance / case law comes out of the ground 18. Much supported accommodation run by housing associations / charities would be occupied under license agreements. The only ones I could think of on tenancies would be semi independent units (training flats) where the support is not sufficiently intrusive to interfere with exclusive possession.
However in the prs, unless the property is let with support from the outset, and a support contract from the outset, I can’t imagine this would be intended to apply to those tenants who receive / obtain a package of support after the tenancy has commenced. E.g care act support or s 17 support to parents or even floating support (if you could even find any services doing it). A bit of a stretch but could this even apply to probation or IOM’s?? And I would assume if the support were provided by an external party, they would have to provide evidence of non engagement, which if a landlord asked a support agency for, they would likely refuse. This, however, does appear to benefit the private “supported accommodation” schemes, which have attracted attention recently for being dodgy, failing to provide any support and reaping the benefits of enhanced hb claims. Or am I missing something?
I suspect this is to deal with the revolving door cases, those who have capacity and knowingly outright refuse to engage or cooperate or indeed move on for whatever reason. I’d hope that the chaotic lifestyles would be linked to the service users assessment and capacity notwithstanding the chaotic lifestyle of service provision the huge amount of short term agency and temp staff on pretty poor wages nd unsopciable hours.
@Paul I think you are spot on there. Possession on this ground will be a doozy come defending proceedings. Imagine the levels of proof and evidence? and as you say, exempt accommodation providers? reliable?
And Ground 5F…..presumably the council won’t be able to cancel the accommodation within 2 years of discharge because of Localism Act requirements on continuing duty owed? questions questions
On 5F (actually 5G – I’ve corrected) – that is s.196 accommodation, not accommodation in discharge of duty.
While the la could request possession on ground 5 f (g) yep the s 195 ha 96 duty would apply reapplication within 2 years (and the council sourced the accommodation under s 193, but not if an offer under the prevention or relief duty). However if possession obtained under ground 18, its inconceivable they wouldn’t make a decision of ih so this dosent apply.
I think the change of wording in Ground 14 could be significant. “Capable” seems to means “could potentially create nuisance or annoyance [to a reasonable person etc]”, whereas “likely” is “more likely than not”. We saw a similar shift in wording in the wider ASB legislation during the late nineties and early noughties.
I’m rushing through this on my way to work, so sorry if I’ve misread this. Am I right in thinking the Ground 8A requirement of three separate days in a period of three years be satisfied by a single period of three consecutive days, or do they have to be separate incidents?
P.S. I should have added “many thanks, this is very useful”!
And a PPS now I’ve read the note on 8A again, I can see this does have to be three separate occasions!
That will teach me to read things properly before posting. Sorry, Giles!
The First-tier Tribunal are going to be busy!
The provisions for rent increases seem pretty tight (agree the FTT will be busy!) – it’s s.13 or nothing, and any agreement otherwise can only be following a notice/determination and at a lower amount than that proposed/determined. I’m wondering what happens in practice if a tenant ‘agrees’ a rent increase without a s.13 notice (which will surely happen) – it has no effect and so they end up with an overpayment on their rent account? Can reclaim by withholding rent/offset against deposit deductions/claim for 6 years post tenancy?
Less sure about the Tribunal being busy. Very few applications now and mostly unsuccessful. Only really of potential use if landlord tries a ridiculous increase to try to force a tenant out, I suspect.
Interesting on ‘informal’ agreements. I would have thought the landlord would have an estoppel argument argument though, if there was a genuine agreement.
If I’ve understood it right, clause 6(A2)(b) also allows new tenants (within the first 6 months of the start of the tenancy) to apply to the F-tT to determine the appropriate rent for the letting – this echoes provisions of the to be abolished HA88 s22. Haven’t worked out whether new clause limits the F-tT in the same way as s22, i.e. – can only reduce rent if contractual rent is significantly higher than market rent, can’t increase above contractually agreed level.
The new sections would not be downwards only, no, as far as I can see. What would be 14ZA sets it out for an application under 14(A1) – the within the first 6 months provision. That is a good point for an amendment.
What this prevents is the pervasive and nasty practice by letting agents of issuing a new contract at an exorbitant rent alongside a S21 if the tenant refuses to sign it, thus circumventing the tenant’s right to go periodic and then challenge a later S13 rent increase.
The local authority may… this leaves too much latitude as similar wording eg LTA 1985 and so on, re failure to account for SC means some councils will and some won’t. Id like to see regulations that clarify the grounds so that councils can be persuaded or compelled.
I suspect the ground 1 is where a tenant is removed disrupting their life, for many an ulterior motive (while allowing for genuine changes of circumstances and reverting to open letting). In this case a tenant might be motivated to notice and complain so the onus is on them and a redress ( only if the LA chooses to act) is available. I doubt this was ever intended to do more than say well there you go have at it.Otherwise the bureaucratic demand to log check and identify a breach is more than most councils could afford or organize themselves to do.
Quite sadly feeble indeed, I must say. Haven’t read everything but just so far the amended ground 1 just seems like a big gaping loophole around the removal of S21.
Seems appalling, a massive gift to landlords: will S21 prescribed requirements as we have today apply to amended ground 1 possessions?
Oh boohoo such a tragedy. “I need you to leave on Aug 1st as my son is going to move in on Aug 15. Except that I can’t help if on august 2nd or 5th he abruptly “changes his mind”.
Then what will I do? Plenty of properties in London are worth more than £5000 for three months (and we all know that it won’t be the maximum fine every time, or possibly even close to it, and certainly not for the first offence, and that is all only considering the occasions when the council gets around to looking into and addressing the breaches), so I may as well just flout the already decidedly feeble and fangless ban on letting outright.
Otherwise, what a terrible tragedy to wait 3 whole months to let it out again, paltry price to pay to be rid of a tenant one doesn’t like, if anything just an opportunity to renovate. Much smaller than the burden of being a scrupulous landlord compliant with all the prescribed requirements for a S21 possession. Seems to me like a right (bad) joke.
May as well just rename it to “ground 21 (Tory edition)”?
“section 21 2.0,” or “section 22,” or “Section 21 turbo charged easy breezy version”
I wonder what the earliest that this could conceivably come into law would be @yhdc
Sorry rather embarrassed since I carried on reading to find you had largely said all that I did but substantially more succinctly and eloquently lol. Sorry I just got as far as the paragraph that laid out the provisions and got so triggered by their weakness that I couldn’t hold back my impulse @yhdc
But I wonder if ground 6A is at LL’s discretion. In other words is it available to them under applicable circumstances more as a “power” or a “duty”?
In a sense the logic is there but in another in the current situation landlord’s flouting regulatory requirements has resulted in an empowerment of tenants by preventing LLs from using S21 thus punishing the LLs until they remedy the breach. If the tenants don’t want to live in the unlicensed or even unlicensable property, then they always have the ability to move out or apply for RROs etc so the punishment was truly and properly/squarely on the landlord while tenants were given clear incentives to beg the issue of the noncompliance. These mechanisms seem perhaps to be completely removed. @yhdc
Forgive my rudimentary understanding – but no fixed term AT? So grant of say a 5yr tenancy will in actual fact just be a monthly periodic AT where tenant can serve 2 month NTQ?
Yes.
Will landlords be able to contract out of the ability to evict for certain terms (e.g. 1 year, or 5 years)?
If not then it seems like yet another way in which this might be a power grab in disguise.. as things are now, a tenant can gain some level of security/certainty/stability by signing a fixed term lease knowing that as long as they obey it themselves they will not have to move and they will be impervious to S21. At the end of this if both LL & tenant are happy then they can even further renew it by signing a subsequent term. I wonder if I understand correctly that under this new regime tenants will be invulnerable to ground 1/1a for the first six months of moving into a property following which point they will be perpetually precarious lest the LL’s “grandchild wishes to move in,” with no way to attain fixed term security after those first six months by signing fixed terms?
Landlords could so contract, but won’t. It was always possible to serve notice under a schedule 2 ground during a fixed term anyway.
It was possible to serve notice, though s.7(6)HA1988 limited the grounds where an order could take effect before the end of the fixed term.
But yes, in practice we’re unlikely to see landlords contracting out of using these grounds. Which is why it’s important to try and pressure the government to add meaningful penalties for using ground 1/1a fraudulently.
How will this work for tenants giving NTQ when in a joint tenancy? Will one tenant be able to give notice, or will it need ALL joint tenants to do so?
Doesn’t appear to be any change to current position, one tenant can do it.
Thanks Giles, good to know!
I wonder what the end of ASTs in favour of PATs will mean for flat long-leases which explicitly only allow subletting where the agreement is an AST.
I would suspect such a clause would become unenforceable.
I wonder if the old rules will still apply like late deposit protection – no eviction notice until deposit returned. Or landlord didn’t have a gas certificate at the start of the tenancy – eviction notice not possible at all.
No, as noted in the post, these are changed or gone completely.