New Rental Rules coming

Those involved in renting residential property will be interested in the government’s proposed shake up of the residential rental sector. The release of the Fairer Private Rented Sector White Paper this week sets out details of how the government plans to achieve their objectives, with a 12-point action plan aimed at “improving the quality of private residential housing and reducing the threat of eviction for tenants”.

From individuals who rent out their second homes right the way through to large scale investors, all landlords that rent out private residential properties in England will be affected by the proposed changes. Separate regulations will apply to Purpose-Built Student Accommodation.

The proposals will form the Renters Reform Bill which is expected to be introduced this parliamentary session at which point the start date for the measures will become clearer. It would be typical for there to be a transitional period, or at least six months notice, for new tenancies and a longer gap before the new rules apply to existing tenancies, although this is simply speculation at this point.

Media coverage so far has focused on the abolition of the s.21 “no fault” notices to terminate Assured Shorthold Tenancies. Under the new proposals, landlords would need to instead use an extended version of the current s.8 notice which outlines statutory grounds for possession, or, tenancies could be brought to an end by the tenant serving notice.

Additional mandatory rights for seeking possession would be introduced to s.8, which will include where the landlord is selling the property or wishes to move into the property. In those cases two months notice will be required and landlords will also be unable to market or relet for the following three months after using those grounds for ending a previous tenancy. Landlords will also be able to use s.8 for tenants who have been in rental arrears of at least two months’ rent three or more times over a three year period, regardless of actual amount in question.

The proposals also include the removal of fixed term tenancies, with all AST being periodic tenancies where the tenant can give two months notice to bring the tenancy to an end - for whatever reason no matter how long they have lived at the property.

Other proposed changes include:

Rent increases limited to annual rises with rent review clauses banned. Tenants will have a mechanism to challenge “disproportionate” increases.

Landlords and agents will not be able to advertise imposing blanket bans such as those with dependents, or those relying on benefits. 

Tenants will have the right to request to have a pet at the property and landlords will both be obliged to consider requests and not unreasonably refuse consent. It is not clear yet what this will look like.

Extension of the “Decent Homes Standard” to the Private Rented Sector which will address issues such as fire, carbon monoxide, etc.

Introduction of a compulsory Ombudsman to streamline the disputes process and make it quicker and cheaper for both parties

Introduction of a new Property Portal where landlords register rental properties, to make complying with legal requirements and enforcement easier

Strengthening local councils’ enforcement powers

Reduction of delays in court proceedings

While landlords may feel that they are unlikely to benefit from any of these changes, they do only relate to AST tenancies, and the statutory grounds for repossession will be extended. 

At the moment, s.21 notices only set in motion a procedure and technically a court order is required for possession - and they can only be served where landlords have complied with a number of other obligations. It is currently as to what the position will be on that once s.21 is abolished. Watch this space.

Posted on 7 July, 2022 by Ortolan

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