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.