Renters' Reform Bill – the end of no fault evictions?
The government has announced in the Queen’s Speech that it will shortly publish a White Paper setting out details of the much anticipated Renters' Reform Bill.
The Bill was first proposed by Theresa May's government in April 2019 to offer tenants renting privately greater security. Having lost momentum whilst the COVID pandemic became the government's priority, it now forms part of the government's "levelling up" policy.
The main elements of the Bill are as follows:
- The abolishment of “no fault” evictions. These currently fall under section 21 of the Housing Act 1988 and allow landlords to serve a notice on tenants to terminate the tenancy without reason;
- Reforming possession grounds for landlords, introducing new and stronger grounds for repeated incidences of rent arrears, and reducing notice periods for anti-social behaviour;
- The application of a legally binding “Decent Homes Standard” in the Private Rented Sector, intended to stop private landlords renting out homes that are of such a low quality that they endanger the health of their tenants;
- The introduction of a new Private Renters’ Ombudsman, intended to resolve landlord and tenant disputes without the need to go to court; and
- The implementation of a new property portal to "help landlords understand their obligations, give tenants performance information to hold their landlord to account, and help councils crack down on poor practice". It is not entirely clear what this will entail.
In an accompanying press statement, Michael Gove described the use of section 21 as an "injustice that sees renters unable to put down roots in their communities". Whilst its arbitrary nature can lead to tenants being subjected to unfair treatment, many landlords use section 21 to legitimately end tenancy agreements – for example if they wish to sell the property. If the government is to maintain a fair balance between landlords' abilities to deal with their assets and tenants' abilities to live securely in their homes, it will need to introduce additional grounds for possession as well as strengthening the current regime.
It is clear that change is firmly on the government's agenda but for now the law remains unchanged and the proposed reforms are unlikely to come into force for some time given they are at a preliminary stage. Any landlords or potential landlords should bear in mind that the introduction of these reforms could, in due course, severely restrict the ability to obtain vacant possession of properties within their portfolio.