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The Renters Reform Bill UK 2024 has been in the works for some time now. Proposed changes and updates have delayed the approval process several times. As the next General Election quickly approaches, the Government is working tirelessly to finalize all the particulars of this new Bill that would improve the letting process for both landlords and tenants. 

Keep reading for a detailed look at how the Bill started, what changes have been made, and what you can expect as a property owner or tenant in the UK market next year.

 

The Renters Reform Bill UK 2024: What You Need to Know

The Renters Reform Bill was scheduled to have a third reading on 24 April 2024. To date, the Bill has undergone two previous readings and several adjustments on its way through the House of Commons. Below you’ll find a summary of this process.

Introduction of the Renters Reform Bill

The Renters Reform Bill primarily impacts residents of England and is intended to fulfill the 2019 Conservative manifesto commitment. This commitment involves creating a more fair and balanced rental market for both landlords and tenants. It also aims to implement reforms set out in the Government’s white paper published in June 2022, which would ultimately create a “fairer private rented sector.”

Second Reading of the Renters Reform Bill

On 17 May 2023, the Bill was introduced to Parliament. It then underwent its second reading on 23 October 23, with most committee members showing a favorable response. Some reports indicated that the Government received backlash over how long it took to bring the legislation forward. 

A few members of Parliament expressed concern about the Government’s decision to delay the new Bill even further until improvements were made to the court possession system. The Opposition demanded even further explanation from the Government and a timetable for landlords and tenants to offer greater clarity. 

MPs (members of Parliament) also pushed for a balance between protecting the rights of tenants and providing landlords with assurance. The Bill was then moved from the 2022-23 parliamentary session to the 2023-24 session for further review. 

The Bill Enters a Public Committee in the Commons

The Renters Reform Bill was considered by the Public Committee during 10 separate sittings in November 2023. During the first four sittings, the Committee heard expert witness testimony. At its conclusion, the Government tabled 183 amendments in total and included 52 new clauses and one new schedule. Many of these amendments were minor or consequential and didn’t impact the overall purpose or effectiveness of the Bill.

Some of these changes included:

  • Prohibiting landlords and letting agents from refusing families with children
  • Allowing landlords to recover possessions from an HMO for full-time students to ensure the space is available for the new academic year 
  • Strengthen the local authorities’ power to investigate and respond to landlord practices

The Opposition also tabled 81 amendments (including 14 clauses), none of which were agreed upon. These included:

  • Requiring landlords and letting agents to include the proposed rent in all property advertisements without accepting bids that exceed the published amount 
  • Restricting how much rent a landlord can request before the tenancy starts
  • Strengthening a tenants’ rights to own a pet 
  • Increasing minimum notice periods for tenants 

Some of these issues were revisited and approved in the later stages of the Bill’s creation.

Amendments at the Reporting Stage of the Bill

In February 2024, it was reported by BBC that the Government was consulting with Conservative MPs on the Bill’s amendments and addressing their concerns. 

A letter written by the Leveling Up Minister, Jacob Young, to the MPs was leaked in March 2024. This letter confirmed the Government’s intentions to bring forward these amendments at the report stage in the Commons. 

The amendments were as follows:

  • Prevents tenants from ending a tenancy within the first six months (with few exceptions).
  • Requires the Lord Chancellor to publish an assessment of the readiness of the county court possession system before abolishing section 21: ‘no fault’ evictions.
  • Prevents landlords from letting properties as holiday accommodation or short-term lets for three months after using the possession grounds to sell or move into their property.
  • Applies the new ground for possession for student lettings to all property types (not reserved for just HMOS). 
  • Requires a view of the implementation of the tenancy reforms within 18 months of measures being applied to existing tenancies. 
  • Requires local authorities to work with tenants who have been served a section 8 eviction notice to prevent homelessness.

The Minister also vowed to review licensing schemes within the local authority’s private rented sector to “reduce burdens on landlords.”

After the report stage is complete, a third reading will take place. The next step is for the Bill to enter the House of Lords and then receive Royal Assent (become law). Even if the law is passed, not all of the stipulations will go into effect immediately. This is especially true of the ‘no fault’ eviction ban, which needs court approval to be fully reformed.

Proposed Benefits for Landlords and Tenants

The changes put forth in the Renters Reform Bill UK 2024 are designed to benefit both landlords and tenants. The ultimate goal is to create a safer, more fair, and smooth letting process for everyone involved.

Here’s what you can expect. 

Abolish ‘No Fault’ Evictions

‘No fault’ evictions have always been a hot topic for both landlords and tenants in the UK. This term is used to describe any eviction that ends a tenancy and is not based on alleged fault by the tenant. 

Since 2019, there’s been rumors and speculation about abolishing Section 21 ‘no fault’ evictions to provide a fairer rented sector for both tenants and landlords. To date, ‘no fault’ evictions give landlords the power to evict tenants without notice or a valid reason. This type of eviction is allowed as long as it’s listed in the tenancy agreement and the tenant is on a periodic, fixed-term, or converted standard contract. 

If section 21 is abolished, it will give tenants more peace of mind and freedom to bring concerns or issues to the landlord without fear of being wrongfully evicted. On the other hand, this new ruling would come with certain exceptions. For example, if the tenants are at fault, the Bill will also give landlords more support and help expedite the eviction process by reducing notice periods.

Grounds for Gaining Possession 

Piggy-backing off the abolishment of Section 21 ‘no fault’ evictions are proposed changes to the grounds for gaining possession. This article will ensure that the grounds for possession are “comprehensive, fair, and efficient.” They must also “cover all circumstances under which a landlord may reasonably expect possession.” 

Grounds can be deemed either mandatory or discretionary. For mandatory grounds, judges will award possessions when a landlord has sufficient evidence that the ground is met. For discretionary grounds, it would be up to the judge to consider whether or not it’s reasonable to award possession, even if the ground is met and the landlord has provided evidence. 

The Government is also introducing new mandatory grounds based on the fact that landlords’ circumstances may change over time. These new grounds will affect landlords looking to sell their property or move themselves and/or their family into a rental property. Landlords will not be allowed to use grounds for moving in, redevelopment, or selling for the first six months of the tenancy. In effect, renters will also receive added security and peace of mind after moving into a new property. 

Other mandatory grounds regarding repeated arrears are also being proposed. This would require delinquent tenants to pay off small amounts of the money owed over a designated period of time. This would be done to keep tenants under the mandatory repossession threshold of two months’ arrears. 

When a tenant has been at least two months behind on rent three times within a three-year period, eviction will be deemed mandatory. This is regardless of the balance of arrears at the time of the hearing. These changes aim to benefit both landlords and tenants. Landlords are protected from irresponsible tenants and reliable tenants can’t be evicted based on a single defaulted payment or financial rough patch.

Another protection for tenants is that the notice period for existing rent arrears eviction grounds will increase to four weeks. This gives tenants ample time to pay off their debts before being evicted. 

New Property Portal for Landlords and Tenants 

This update would include a database of all landlords and privately rented properties in England to ensure compliance with current legal requirements. Landlords would most likely be required to register with the portal before signing a tenancy agreement, collecting rent, or letting their properties. This would be a legal requirement and enforced by the local council. 

The portal will also provide a single ‘front door’ for landlords to explicitly understand their responsibilities and duties. Tenants will have access to information about a landlord’s compliance, helping them make an informed decision about future tenancies. Local councils will also have access to all information in the portal. This data will facilitate necessary crackdowns on non-compliant landlords. The Government is also considering the inclusion of all landlord offenses so they are publicly visible.

New RRO (Rent Repayment Order) Rules

This new RRO rule will allow tenants or a local authority to go to a tribunal if the landlord in question commits at least seven offenses. If the tenant wins their case, the landlord will be ordered to repay the rent in full. They will also be liable to pay up to two years’ worth of rent, which is an increase from the previous standard of one year. 

The new RRO rules will also include new offenses not previously listed. These include but aren’t limited to, breaching Ombudsman rules or deliberately providing false information when registering on the newly proposed property portal mentioned above. 

Simplify Tenancies

All fixed contracts will move to rolling tenancies unless the tenant leaves the rental property. The Renters Reform Bill UK would eliminate the need for fixed-term tenancies. Rolling tenancies have no specific end date unless the landlord or tenant gives notice. 

Under this new law, tenants must give at least two months’ notice before moving out, but a landlord can evict a tenant on repossession grounds (failure to pay rent), with notice. Some reports claim that this last stipulation may change and require tenants to live in a property for a minimum of four months before giving notice.

Limited Rent Increase and Rent in Advance

Another portion of the Renters Reform Bill designed to protect tenants is a limit of one rent increase per year, with two months’ notice. Landlords can only increase the rent once per year and must give adequate notice before enforcing the increase. This gives the tenant ample time to challenge the increase through a tribunal if they believe the increase is excessive or unfair. 

All increases will be done using one mechanism and replace the existing Section 13 process. If a tenant pays any rent in advance and the tenancy ends early, the landlord will be required to repay all excess payments. Landlords will also be limited to how much advanced rent they can ask for.

The Government is hoping these changes will “prevent tenants from being locked into automatic rent increases that don’t reflect changes in the market price or are too vague.”

New Mandatory Property Ombudsman

The Property Ombudsman in the UK gives both tenants and landlords an impartial third-party to provide conflict resolution. All landlords are required to join at least one approved scheme before letting their property. 

The Renters Reform Bill UK 2024 is proposing a new Ombudsman that all landlords will be required to join. This change will also include a new redress scheme that allows for all tenant complaints to be independently investigated on a case-by-case basis.

The new Ombudsman will offer a variety of powers, including:

  • Providing information
  • Reimbursing rent to tenants if the property doesn’t meet the set standards or promised conditions
  • Pay compensation up to £25,000
  • Forcing landlords to take remedial action or issue an apology 

Applying Decent Homes Standard for the PRS

If this portion of the Bill is passed, it will be the first time that the Decent Homes Standard would be applied to the private rented sector. This means there will be minimum standards that all landlords are legally required to meet. These standards are a part of the Government’s ongoing Leveling Up mission to halve all non-decent or liveable homes by the year 2030. 

Under this new proposal, local councils will be given the power to force landlords to make necessary improvements to their properties, including safety and maintenance upgrades. More specific upgrades and improvements include:

  • Adequate bathroom and kitchen facilities
  • Clean, appropriate, useable facilities 
  • Decent noise insulation
  • Ample heating to remain warm and dry
  • No serious safety or health hazards (fall risks, fire, or carbon monoxide poisoning) 

Failure to do so could result in a £30,000 fine, a ban order, or the ability for existing tenants to claim their rent back. The ultimate goal of these requirements is to “raise standards and make sure that all landlords manage their properties effectively, rather than waiting for a renter to complain or a local council to take enforcement action.” Councils will have even greater power and ability to investigate non-compliant landlords and provide them with the necessary tools and resources they need. 

Tenant Pet Requests and Pet Insurance

With over 50% of households in the UK having at least one pet, pet owners treat their furry friends like part of the family. That’s why the Renters Reform Bill is looking to make it easier for pet owners to let properties in England.

The Bill would allow tenants to request approval to own a pet. All requests must be rejected or approved by the landlord within 42 days. In special cases, landlords can request a one-week extension. During this time, they can gather more information but cannot reject the request without just cause. 

But this portion of the bill also offers protection for landlords. Before a tenant can move into a property with a pet, they must prove they have pet insurance or sign an agreement to cover any reasonable costs if the pet causes damage to the property. This is similar to a pet deposit, which is common in the US.

Outlawing Blanket Bans on Benefits

This new update will eliminate discrimination against renters receiving benefits and renters with children, making it illegal for landlords to place ‘No DSS’ or ‘No benefits’ clauses in the property listing. According to the courts, these blanket bans go against the Equality Act and also discriminate against disabled and vulnerable people and women. 

In light of this, landlords will still be able to perform standard reference checks to ensure the tenant can afford the property and is given the final say when choosing a renter. These initial changes will apply to England and Wales and later be extended to Scotland. 

Steps in the process may include:

  • Allow landlords to make more informed, sound decisions based on individual circumstances and not on blanket bans of certain groups 
  • Explore improvements to the sharing of welfare support information for both landlords and tenants
  • Ensure that those who are unable to manage monthly payments can have the funds directly withdrawn and paid to their landlord through the Universal Credit system
  • Educate and inform landlords about the misconception that it’s more difficult to get insurance on properties where the tenants are receiving benefits 
  • Increase awareness of the resources available to those receiving benefits or living on a low-wage

FAQ About the Renters Reform Bill

Why is the Renters Reform Bill being introduced?

There are many reasons why the Renters Reform Bill UK 2024 is being introduced and considered. Overall, it’s meant to “bring a better deal for renters” and offer them protection against unsafe living conditions and discrimination. 

On the other side of the coin is protection for landlords. The Government recognizes that responsible landlords face challenges of their own when finding and referencing reliable tenants. The Bill is meant to “celebrate the overwhelming majority of landlords who do a good job.” It also gives these quality landlords the ability to protect and repossess their property when faced with an irresponsible tenant or their circumstances change. 

The Housing Secretary, Michael Gove, states:

“Our new laws introduced to Parliament today will support the vast majority of responsible landlords who provide quality homes to their tenants, while delivering our manifesto commitment to abolish Section 21 ‘no-fault’ evictions. This will ensure that everyone can live somewhere which is decent, safe and secure – a place they’re truly proud to call home.”

When will the Bill go into effect?

The passing of the Renters Reform Bill has been a long and arduous process and it’s still ongoing. With countless proposed changes, amendments, updates, and exclusions, there’s no proposed date of when all the changes and requirements will be implemented. 

Once it receives further readings in Parliament, it will eventually be turned over to the Royal Assent. The Bill will be introduced in two stages to ensure that all stakeholders have ample notice to implement the necessary and required changes. The Government will also allow 6 months from the implementation date for all tenancy updates. These dates are still undetermined and will be based on when the Bill receives Royal Assent. 

All existing tenancies will transition to a new system on a different implementation date. This will prevent a two-tier rental sector and ensure that all landlords and tenants have a clear understanding of their rights. All of these steps must take place before the next General Election expected in January 2025. 

Only time will tell as the Renters Reform Bill UK 2024 continues to make its way through the required committees and readings. Until then, both tenants and landlords will be responsible for protecting themselves and their rights, and staying abreast of all current and updated guidelines and regulations.

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