Legislation to look out for…Renters’ Reform Bill

The Renters’ Reform Bill 2019-20 was included in the Queen’s Speech on 19 December 2019 with the promise that it would deliver a fairer and more effective rental market.

The changes set out in the proposed Bill have significant implications for both landlords and tenants, most notably by reforming the grounds for possession when seeking to end a tenancy.

Strutt & Parker answers some key questions for rural landlords:

What are the key elements of the Renters’ Reform Bill?

The government has said the Bill will improve security for tenants in the rental sector, while at the same time strengthening the rights of landlords who need to gain possession of their property when they have a valid reason to do so. The main elements are:

• Abolishing ‘no fault’ evictions at the end of fixed term contracts by removing section 21 of the Housing Act 1988 and reforming the grounds for possession so tenants cannot be evicted without good reason. 
• Section 8 eviction process will be strengthened, giving landlords more rights to gain possession through the courts where there is a legitimate need for them to do so – i.e. if the landlord wants to sell the property or wants to move into it themselves. 
• Introduction of a new lifetime deposit so tenants don’t need to save for a new deposit every time they move. 
• Introducing a Housing Court to make it quicker and easier for landlords to regain possession of their properties if a tenant refuses to leave.

What would the change to Section 21 notices mean?

Section 21 currently enables a landlord to repossess their properties from Assured Shorthold (AST) tenants without having to establish fault on the part of the tenant. It is sometimes referred to as the ‘no-fault’ ground for eviction.

If the proposals contained in the Renters’ Reform Bill come into force, an AST essentially becomes an open-ended rental agreement. Landlords will need to rely on stipulated grounds for possession set out within the Bill if they wish to evict a tenant.

What grounds for possession would a landlord have?

The government issued a consultation which ran from July to October 2019, which gives the clearest indication of what grounds of possession a landlord might be given if the Section 21 option is removed.

The government is proposing extending the list of grounds under which landlords can serve a Section 8 notice, by extending the provisions of Schedule 2 of the Housing Act 1988. 

Examples of existing grounds for possession under Section 8 include where the tenant has significant rent arrears, the tenant has caused the property to be neglected or is guilty of anti-social behaviour.