The Proposed Renters (Reform) Bill 2023: What Landlords Need to Know

Renters Reform Bill 2023

The rental housing market in the United Kingdom is on the verge of significant changes, with the government's Renters (Reform) Bill 2023 poised to bring about extensive alterations to the private rental sector (PRS). As landlords, it's crucial to understand these impending changes and their potential impact on your rental properties. In this article, we will synthesize the key information from two articles discussing the Renters (Reform) Bill 2023 to provide a comprehensive overview for landlords.

Overview of the Renters (Reform) Bill 2023

The Renters (Reform) Bill 2023, which was officially unveiled by the government in May, aims to address the housing crisis and create a fairer rental market while strengthening tenants' rights. The bill seeks to amend the Housing Act 1988 (HA 1988) and introduces several significant changes. However, it's important to note that the bill will not affect tenancies outside the scope of the HA 1988, including those granted to companies, tenancies where the property isn't the tenant's only or primary residence, or those with annual rents exceeding £100,000.

Abolition of Assured Shorthold Tenancies

One of the most noteworthy changes is the abolition of assured shorthold tenancies (ASTs). Instead, all such tenancies will become periodic assured tenancies. This means that landlords will no longer be able to require tenants to commit to a minimum term. Tenancy periods will align with rent payment periods, with a maximum of one month. Tenants will have the right to terminate the tenancy by serving two months' notice at any time.

Grounds for Termination

Under the new legislation, landlords can only seek to terminate a tenancy if they can establish one of the statutory grounds outlined in the bill. They must serve a "section 8 notice" identifying the grounds they intend to rely on and commence possession proceedings if the tenant does not vacate. Some of the key changes to the statutory grounds include:

• A new mandatory ground for landlords intending to sell the property.

• An amended mandatory ground for when the landlord or a close family member needs the property as their only or primary home.

• Ground 8 (mandatory ground for at least 2 months' rent arrears) will be amended to disregard any universal credit payments owed to the tenant.

• A mandatory ground for repeated rent arrears, addressing tenants who repeatedly default on payments.

• An expanded discretionary anti-social behavior ground, broadening the criteria for possession.

Rent Review Provisions

The bill introduces new rent review provisions. Landlords can only increase rent once a year by following the statutory process, involving a two-month notice to the tenant. Tenants have the right to challenge the proposed rent increase by applying to the First-Tier Tribunal.

Pet Ownership and Other Provisions

A new term will be implied into all tenancies, stating that landlords cannot unreasonably refuse a tenant's request to keep a pet. However, landlords can require tenants to have pet insurance or cover reasonable costs of pet-related damages.

Other Important Provisions

The bill also includes:

• A requirement for landlords to provide tenants with a written statement of terms and information about the tenancy.

• Financial penalties for landlords breaching specific provisions.

• A requirement for deposits to be held in an authorized scheme.

• Creation of a Privately Rented Property Portal containing a register of residential landlords and properties.

• Establishment of a compulsory Ombudsman scheme to investigate and resolve tenant complaints.

Effective Date and Ongoing Concerns

The Renters (Reform) Bill 2023 will apply to new tenancies granted on or after its commencement date. For existing tenancies, it will apply until the expiry of the fixed term or as specified in regulations.

It's important to note that the bill is still in the early stages of parliamentary proceedings, and amendments are likely. Landlord and tenant representative bodies have already raised concerns about potential abuse of the new grounds for possession and the ability of courts to handle these changes efficiently.

As landlords, this is an opportune time to review existing tenancy agreements, credit control processes, and ensure compliance with tenancy deposit and other statutory requirements. Stay informed about the bill's progress and be prepared to adapt to the evolving rental landscape in the UK.