On 17 May 2023, the Renter’s (Reform) Bill 2023 was introduced to Parliament. The Bill is the delivery of a pledge by the Government to ‘level up the quality of housing in all parts of the country’ and an attempt to address the prevailing residential housing crisis and the current state of the rental market.
The Bill has been hailed as proposing the largest reform to residential renters’ rights in a generation, adding detail to the previous white paper “A Fairer Private Rented Sector”, published on 16 June 2022.
The abolition of ‘no-fault’ evictions
Removal of the section 21 ‘no fault’ termination right is arguably the most significant proposed change for both landlords and tenants. Although it comes as no surprise following the Conservative manifesto in 2019 and the 2022 white paper, the Bill fleshes out the detail and lays out the avenues open to a landlord under which it will be able to obtain possession. A landlord will then only be able to terminate on specified grounds following service of notice under Section 8 of the Housing Act 1988.
The grounds on which possession can currently be sought are a mixture of discretionary (where a judge must consider whether it is reasonable to award possession, even where the ground is met) and mandatory (where judges must award possession when a landlord can evidence the ground is met). These will be amended or supplemented and include the following, though this is not an exhaustive list:
- A new mandatory ground if the landlord intends to sell. There is no detail as yet as to what evidence will be required by the Court to establish an intention to sell, however, there are proposals to prevent landlords from remarketing or re-letting their property within three months of citing this ground for possession.
- An amended mandatory ground if the landlord or a close member of the landlord’s family requires the property as their only principal home. Again, the extent of the evidence required to prove such intention remains to be seen.
- A new mandatory ground provides that a landlord can obtain possession if a tenant has been in arrears amounting to at least two months’ rent on three separate occasions in a rolling three-year period. Excluded from the qualifying arrears are those linked to universal credit payments that the tenant is entitled to receive but which have not been paid. This is in addition to the already existing mandatory Ground 8 under the Housing Act 1988 which is available where there are least two months’ rent arrears at the time of service of the notice on the tenant and at the time of the Court hearing. Ground 8 has also been amended to include the universal credit exception referred to above.
- The discretionary anti-social behaviour ground will be amended to allow landlords to seek to recover possession where the tenant, or anyone living in or visiting the property, displays conduct that is ‘capable of causing’ nuisance or annoyance as opposed to being ‘likely to cause’ such. The intention here is to lower the threshold and to widen the ground. It is a discretionary ground and whether or not it is reasonable and proportionate to order for possession will be a matter for the Court to decide, even if the threshold for anti-social behaviour has been met.
Proposed penalties
There are intended to be financial penalties for breaches of the new rules. Local authorities will have the power to impose fines for example, where landlords grant a fixed term tenancy after the Act comes into force or try to terminate a tenancy with a notice to quit outside of Section 8. Repeated offences can lead to multiple fines, and it will be a criminal offence for a landlord to serve a Section 8 Notice seeking possession for a ground that they are not entitled to use, either knowingly or recklessly.
Note that the Bill proposes to amend the Housing Act 1988; it does not, therefore, affect tenancies which are not otherwise protected by that Act. Some tenancies will also be excluded from the new rules.
Next steps
The Bill is still at an early stage and there are likely to be changes to it during its passage through Parliament. There has already been significant coverage of the Bill in the press where it has been praised and criticised in equal measure. It remains to be seen if it will be the hoped-for panacea to the residential housing crisis.