Proposals for the Renters’ Reform Bill 2019-2020 (“the Bill”) were formally announced as part of the Queen’s Speech on 19 December 2019. The Bill seeks to introduce reforms to make the rental market fairer and more effective, by improving security for tenants and giving them powers to hold their landlord to account. In turn, the Bill also seeks to strengthen the rights of landlords who need to gain possession of their property when they have a valid reason to do so.
What is included in the Renters’ Reform Bill?
The Bill includes measures to remove section 21 of the Housing Act 1988 (“the Housing Act”) to abolish non-fault evictions, provides landlords with more rights to gain possession in legitimate circumstances through reform of current legislation, and introduces a lifetime deposit scheme. There are further plans to expand the scope of the database of rogue landlords and property agents and tenants will be given a right of redress if properties are not safe and fit for human habitation.
Abolishing section 21 and changes to section 8
The most notable change for landlords will be the abolition of section 21 notices. On 15 April 2019, the Government announced that it will put an end to so called ‘non-fault’ evictions by repealing section 21 of the Housing Act which currently enables private landlords to repossess their properties from assured shorthold tenants in a timely manner and without having to establish fault. The new framework means tenants cannot be evicted without good reason and aims to provide tenants with more stability by removing the fear of having to make alternative plans at short notice should a section 21 notice be served upon them.
To ensure their landlords still have the ability to secure possession of their properties, the Government proposed to strengthen the existing process of eviction under section 8 and make the grounds to evict more inclusive and accessible. It will give landlords more rights to gain possession through the Court where there are legitimate reasons to do so e.g. if they want to sell the property or move in themselves. Improvements will be made to accelerate the section 8 eviction procedure and keep costs down given the removal of the section 21 process, through which landlords can currently pursue an accelerated possession procedure.
Many landlords will obviously be concerned by the removal of non-fault possessions and will be eager to see the proposals in respect of the section 8 changes. Arguably, the proposals also raise an interesting question over landlords’ human rights pursuant to Article 1 Protocol 1 of the ECHR and therefore the Government will need to ensure that the Bill addresses the competing interests of landlords and tenants.
The lifetime deposit scheme
Since 6 April 2007, landlords are required to place deposits taken from tenants into a statutory Tenancy Deposit Protection scheme (TDP). The Bill is set to change this through the introduction of a lifetime deposit scheme. The Residential Landlords Association has suggested that deposits should be held on trusts which can easily be transferred from one tenancy to another. This would be similar to a custodial scheme, but such a trust would also act like a bank account that can be topped up. It is yet to be confirmed how this will work in practice, particularly with regard to shared tenancies or if deductions need to be made from the deposit for damage to the property.
If implemented effectively, lifetime deposits could have a positive impact on the rental sector. In previous years, the cost of moving between rental properties has been a challenge for tenants, so a lifetime deposit could subtract from this. Cheaper moving costs could encourage more people to rent and increase business for landlords.
Access to rogue database to be strengthened
Another provision of the Bill is to extend access to the Government’s database of rogue landlords and property agents to the public. The database is maintained by the Local Authority and is not currently available for tenants to view. If this provision is implemented, tenants will be able to avoid rogue landlords and will have the right to redress if their properties are not safe and fit for human habitation. This will inevitably increase the quality of the sector and filter out rogue landlords and their practises.
The Dispute Resolution Team continues to monitor any developments in the rental sector, so that our clients can be provided with the most up to date information. The Bill has yet to be presented at Parliament and therefore reform as set out above is very much in its infancy. Given the impact of the Covid-19 pandemic and Brexit, it is likely that the Bill will not be implemented for a long time; however, when it is finally introduced, it will evidently create the largest number of reforms to landlord and tenant law since the implementation of the Deregulation Act 2015 and landlords will need to be aware of the changes in order to avoid falling foul of the same.
The Dispute Resolution Team are here to assist with the preparation of possession notices, including reactivation notices, and with other general matters relating to the tenancy. Should you have any questions about the information within, or the services we provide, please contact the TSP Dispute Resolution team on 01206 574431 or by e-mail at email@example.com