Renters Reform Bill – Update

You’ll have no doubt heard in the news about the proposed new Renters Reform Bill that being discussed in Parliament. We are aware that this is creating some unease amongst Landlords. The main issue is that until the ‘official’ bill is introduced, there is a lot of scaremongering occurring that is unhelpful to say the least.

Therefore, we thought it best that news updates from trusted sources such as PropertyMark, should be shared to try and inform Landlords that this is not a time to panic. In fact, now is the time when a Landlord really does require a professional and experienced Agent to act on their behalf.

Below is an update on how the proposed Bill will affect ASTs and the changes to Grounds for Eviction in England.  If you have any further queries, we are of course happy to answer any questions you may have about the management of your property.

The end of Assured Shorthold Tenancies

The flagship change proposed under the Renters (Reform) Bill is the end of Assured Shorthold Tenancies (ASTs). These types of tenancy have been in place since the Housing Act 1988 and have allowed landlords to create fixed-term tenancies which can be ended using a Section 21 notice to quit without citing a reason.

The Bill proposes that the Section 21 notice will be removed from legislation entirely and that there can be no end date on a tenancy. This means two things:

• Firstly, all tenancies will become open-ended. A fixed term gave a specific period that the tenancy would last for, this is often 12 months and would be renewed annually. A fixed term gave flexibility to tenants, who did not want to be held into a contract for a long time, and for landlords, who may wish to make changes to the terms of the tenancy. With no fixed term provision, a tenancy can effectively last indefinitely, until ended by either party.
• Secondly, if a landlord wants to bring a tenancy to an end, they will need to use other grounds for eviction, under Section 8 of the 1988 Act. Propertymark has been lobbying for these grounds to be strengthened in order to give assurances to landlords that they will be able to regain their property when they need to.

Some Section 8 grounds have been amended and updated and some new grounds have been added in order to give landlords protections in certain circumstances. Please see below information on the Section 8 grounds and the changes.

Changes to grounds for eviction in England

The Renters (Reform) Bill has made amendments to the grounds for eviction under Section 8 of the Housing Act 1988. These have been changed and, in some cases, strengthened, to give landlords better protections when evicting a tenant. These changes will be necessary if the Bill becomes law because a Section 21 notice will no longer be valid.

The Bill has introduced Ground 1A to be used where the landlord has an intention to sell. Previously a landlord would have used a Section 21 notice if they intended to sell their property without sitting tenants. This new ground is mandatory, which means that if it is challenged by the tenant, or they do not leave, the judge must grant an order for possession. A judge cannot use their discretion whether or not to enforce this ground for eviction. There are further grounds which support this, including if the mortgage lender of a property requires repossession of the property in order for it to be sold (Ground 2) and if the property’s lease ends (Ground 2ZA) or the superior landlord of a lease requires repossession (Ground 2ZB).

New grounds have been proposed to ensure that a landlord can repossess their property for specific tenancy requirements, such as if the property is required for use as part of employment (i.e. accommodation tied to a workplace).

Anti-social behaviour

Ground 7A has been amended to change the amount of notice required. This means that if the landlord is seeking repossession due to a conviction of a serious offence, including anti-social behaviour, they can serve notice immediately. However, a possession order can only be granted by a judge 14 days after the notice is served. This is a mandatory ground for eviction. Ground 14 has also been amended so that notice can be served immediately if the tenant is involved in anti-social behaviour, however, this ground is discretionary, meaning that the judge can use their discretion to decide whether this ground applies to eviction. The wording of ground 14 has been amended from “likely to cause” to “capable of causing” nuisance and annoyance. A judge would have to consider if the case met these criteria.

Rent arrears

There have been changes to the grounds relating to rent arrears. Ground 8 can still be used if the tenant is in rent arrears of 2 months or more at the time of serving notice and at the time of the court hearing, however, the ground is not applicable if the tenant is due an award of Universal Credit. Ground 8A is a new ground proposed for repeated rent arrears. This ground can be used where the tenant is in arrears of 2 months or more on three separate occasions over three years.

This new ground is intended to tackle those who repeatedly fail to pay rent on time, but not penalise tenants who have had only one period of difficulty and managed to clear the arrears. Other grounds for rent arrears (grounds 10 and 11) remain the same but the notice period for all rent arrears grounds has now been amended from two weeks’ notice to four weeks.

Court system

The proposed changes to grounds for eviction will mean that more court action is likely to be required by landlords. Not all notices will end in a court procedure, but because the landlord must give a reason (unlike under a Section 21 notice to quit) for eviction, these are open to challenge from a tenant and in some cases are up to the discretion of a judge to enforce. Propertymark has long campaigned that changing the grounds of eviction will cause much more stress for both tenant and landlord and will put an enormous amount of pressure on the, already struggling, court system.

Source: PropertyMark May 2023

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