The Renters’ Rights Bill was published today, Wednesday, and received first reading. It now looks set for second reading and progress through Parliament after the party conference season. Parliamentary time allowing, there is a good chance it will be an Act before the new year. This is particularly important to note for reasons that will become clear.
There is a lot in it, and, while it is recognisably built on the structure of the late Renters (Reform) Bill (our notes here and here), there are some significant differences and new things. For brevity (but this will still take two parts), I’m going to concentrate on the differences, so you may want to review the above linked previous posts on Renters (Reform) Bill for more.
Let’s start with the big one – the end of section 21. As before, this is accomplished by ending assured shorthold tenancies and turning them into periodic assured tenancies, with a term of no more than one month.
However, and this is the huge difference, there are no transitional provisions for current/pre commencement fixed term tenancies. Rather than the confusing and unwieldy ‘when the fixed term expiries or after 12 months from the commencement date for new tenancies’, there is a single date (at least for private tenancies, there may or may not be a separate date for housing association ASTs). At that point, all existing ASTs, whether statutory periodic, contractual periodic or in a fixed term, will become as assured periodic (save where there are existing possession proceedings, including under section 21).
That date is to be specified by regulations. But I would expect it to be not very long after the Bill has Royal Assent.
There has been, inevitably, considerable debate about this approach. My view is that if landlords are going to pre-emptively serve section 21 notices, they will do this as long as they can regardless of any additional transitional period, so it makes sense to make the period clear and limited. I don’t think that, given the history since 2019 when it was a Conservative manifesto commitment, Labour’s manifesto commitment and the clear commitment from the Secretary of State to ‘day one’ ending of section 21, anyone can claim to be taken by surprise.
So, the concomitant new grounds of possession.
As with R(R)B, there are new grounds of possession for ‘landlord wants to sell’, and ‘landlord/landlord’s family member wants to live in the property’. As grounds these are in the same terms. I have the same concerns about the evidential requirements for these grounds that I did before.
However, there are changes to when these can be used and the notice period required.
Neither of these grounds can be used in the first twelve months of a tenancy. (For existing tenancies that are ‘converted’, that 12 months includes pre-conversion occupation by the tenant).
Both grounds require 4 months notice by the landlord.
These are, I think, good changes that go some way to soothing the worries over the abuse of these grounds that has been apparent in cases in Scotland.
Further, the restricted period in which a landlord having served a notice on these grounds cannot re-market or re-let the property is to start from the date of service of the notice and end 12 months from the date of expiry of the notice, or 12 months from the date of particulars of claim if a possession claim is issued. Breach of this is subject to penalties of up to £7,000, by local authority enforcement.
Other grounds of possession parts are largely like the R(R)B, except – and these are important:
i) The previously proposed and utterly ludicrous mandatory ground 8A on rent arrears has gone. Which is good as it was unworkable and perversely would have encouraged people to remain in rent arrears to avoid it.
ii) Ground 8 had the required period of arrears at service of notice and at hearing of possession claim changed from two months to three months (or from 8 weeks to 13 weeks). Ground 8 remains a mandatory ground. Notice of 4 weeks will be required.
iii) For reasons which I will confess escape me (but I suspect have something to do with universities being a bit daft and panicky), the ‘students who have a joint tenancy of an HMO, so only get a 12 month term’ ground of possession is still in there, extended to any student in an HMO with the proviso that if it is a joint tenancy they all have to be students.. I think this only works to capture a sub-set of a sub-set of the student accommodation market, so is a bit pointless, and that student market landlords could adapt to any perceived problem of a joint tenant continuing in occupation after the summer by simply granting individual tenancies of rooms, not a joint tenancy of the whole HMO. (This would have the additional benefit to parents of students by meaning they don’t have to be guarantors of all the rent for the entire joint tenancy). But there we are. I expect the terms of this ground to see a fair bit of court action including appellate level.
Universities’ own accommodation continues to be exempt. There is a question over the status of purpose built private student accommodation, which doesn’t feature (so wouldn’t benefit from the student ground if not an HMO?).
iv) The ASB ground 14 does not have the ‘likely to cause’ change. Factors to be considered by the Court in ASB possession proceedings are to include effects of behaviour on other occupiers if in an HMO.
v) Notice periods will change – 4 weeks for grounds 8, 10 and 11, two months for ground 7. Otherwise the same (though longest notice period applies if a combination of grounds used.)
The other changes to grounds are, I think, pretty much as before, though the revised ground 6 ‘redevelopment’ ground needs some close consideration.
No possession order can be made (save for on grounds 7A and 14) where the deposit protection requirements have not been met. However, there are no similar limits with regard to provision of gas safety certificate, EPC or how to rent guide, as currently with section 21.
Tenant notice to end a tenancy has to be two months notice. There is no restricted period in which a notice cannot be given.
And, to conclude Part 1, some other bits, which are a good thing.
Illegal eviction under section 1 Protection From Eviction Act 1977 can now be subject to civil penalties by the local authority of up to £40,000 (the new civil penalty limit generally). This is much better than the need to bring a criminal prosecution, with all the costs and evidential burden of that, only to have the Magistrates impose a fine of £500 or so. I need to look further on how this would interrelate with an rent repayment order application by the tenants.
While on rent repayment orders, the change to make superior landlords liable for rent repayment orders, thereby overturning Rakusen v Jepsen, is carried over. This is a good thing, because superior landlords really, really need to be wary of rent 2 rent setups, as per this post from Sunday.
And also retained is the change to ensure that no lease of longer than 7 years term can be an assured tenancy. This will take all long leases out of the ‘AST trap’ and make it clear that shared ownership leases are not assured tenancies. This part will come into effect two months after royal assent on the Bill.
For social landlords of shared ownership lessees, this is going to change a lot, from possession proceedings to how they demand rent. I hope they are up to the task.
And that is enough for this evening. But coming up in part 2…
Banning rent bidding – new and a significant change, maybe more so than expected.
Application of Awaab’s Law to the private rented sector.
Mechanisms for rent increases in tenancy and for challenges to rent increases – some significant changes here.
Pets, benefit discrimination and children discrimination (largely as before)
The private rented sector database – some changes, including on access.
Redress schemes.
Rent repayment order offences.
And a new Decent Homes Standard applying to the PRS and social housing!