Renters (Reform) Bill 2023: Everything Landlords Need to Know
Thursday 8th June 2023
Renters (Reform) Bill 2023: Everything Landlords Need to Know
A hot topic among landlords, letting agents, and property investors today is the newly proposed Renters (Reform) Bill
Designed to improve living circumstances for renters and place more stringent measures on rogue landlords, the Bill is overall viewed as a good thing.
While the new proposals have been floating around for several years, the Bill is in the news again as it's just been put through Parliament for debate.
In this article, we'll share a summary of the UK Renters (Reform) Bill 2023 with everything landlords need to know.
What is the Renters (Reform) Bill 2023?
The Renters (Reform) Bill is a new piece of proposed legislation designed to help renters and, as it's been coined, "bring in a better deal for renters".
The Bill is supposed to place more stringent measures on rogue landlords and make renting more stable for UK residents renting from private landlords long-term.
The Bill is expected to become an "Act" and fully implemented in the UK around the summer of 2024.
It was first introduced in 2019 and is currently being debated in Parliament before it's expected to become law.
What Does the Renters (Reform) Bill Mean For Landlords?
As part of the Renters (Reform) Bill, there are several key changes that landlords must be aware of and ready to implement when the Bill becomes law.
Keep reading to learn what the main changes are and what the Renters (Reform) Bill means for landlords.
1. No More 'No Fault' Evictions
Section 21 has been abolished in the Renters (Reform) Bill. This clause previously allowed landlords to practice 'no fault' evictions.
I.e., they could evict tenants without there having been a breach of contract. Basically, the tenant didn't do anything wrong, but the landlord decides to evict for their own reasons.
However, landlords can now only evict tenants for three main reasons:
a. Fault-based grounds
b. Reasonable circumstances
c. Fixed-term tenancies ending
2. Tenants Have a Right to Request a Pet
With a rapid increase in the younger generations' renting properties, and more people renting properties long-term, rentals are becoming people's homes.
In light of this, the Renters (Reform) Bill is making it easier for tenants to keep a pet. Under the new Bill, tenants have a right to request a pet and landlords must consider the request seriously and "cannot unreasonably refuse".
Realistically, most pets don't cause an issue in a rental property, particularly reptiles, rabbits, guinea pigs, hamsters, and even cats.
Dogs are usually a landlord's biggest concern. But renters with dogs are being encouraged to include details of "responsible ownership" in their requests for pets.
For example, by evidencing training (via video footage), providing copies of vaccinations, and images of the pet in responsible situations.
Remember, should a landlord deny a request for a pet, the tenant can take the denial to the Ombudsman for a second review.
If the Ombudsman finds the denial illegitimate, the decision can be overruled, and compensation may need to be funded to backdate kennel or dog sitter fees.
Therefore, landlords must consider all requests seriously, respond in writing, and provide clear reasons for the refusal of the pet (should you have a legitimate reason for refusal).
To protect a property from pet damage, a landlord can insist the tenant pays for pet insurance. This covers the costs of any damage and places the liability of pet care on the tenant.
The fees will be introduced into the Tenant Fees Act once the Renters (Reform) Bill has been finalised. However, insurance costs should only be insisted on where it is absolutely necessary.
3. Introduction of a Mandatory Ombudsman
Similar to how an Ombudsman exists for many UK issues, a new Ombudsman will be established especially for renters and landlords as part of the Renters (Reform) Bill.
The new system will be introduced for both renters and landlords, and is designed to provide "fair, impartial, and binding resolution to many issues".
Membership to the Ombudsman will be mandatory for all landlords, including private landlords and those that use letting agents.
As part of the Ombudsman's practices, they can enforce landlords to issue an apology to tenants, provide information to them, take remedial action, and pay compensation of up to £25,000.
4. Restrictions On Rent Increases
Another key part of the Renters (Reform) Bill that landlords must note is the new restrictions placed on when and how rent increases can take place.
The new rules include that:
• Rent can only be increased once per year
• A minimum of 2 months' notice must be given of rent changes
• Advanced rent must be repaid if a tenancy ends earlier than the months' paid
• A limit on the number of advanced months' rent that can be asked for
5. Periodic Tenancies Becoming a Standard
Fixed-term tenancies are one of the most popular types of tenancy agreements offered in the UK.
These are agreements to rent a property for a fixed period (for example, for two years) before they end, or unless the tenancy is ended early for reasons allowed within the tenancy agreement.
When the Renters (Reform) Bill is introduced, fixed-term contracts will be abolished gradually and replaced by periodic tenancies.
These are rolling tenancies with no end date, enabling tenants to stay in their homes long-term.
6. Removing Benefit Bans
Many landlords used to have blanket bans in place on renters receiving benefits, either individually or as a family. Such policies were titled 'No DSS' or 'No benefits'.
This banned anyone who accessed universal credit, housing benefits, disability benefits, or tax credits from renting those properties.
A court ruled that such policies were discriminatory against women, disabled, and vulnerable people. Letting agents are no longer allowed to rent properties with these policies, regardless of whether the landlord asks for it.
The Renters (Reform) Bill will make it law that no landlord, including private landlords, can issue blanket bans on renting to people who receive benefits.
7. Access to a Property Portal For Landlords
As part of the new Bill, landlords will have access to a Property Portal to help them stay compliant.
Tenants will also have access to the portal, which is designed to help them "make informed decisions when entering into a tenancy agreement".
Has the Renters (Reform) Bill Been Passed?
The Renters (Reform) Bill has been in the ether for several years now, first being introduced in 2019. It is not yet passed or enshrined in law.
On 17 May 2023, the Bill was introduced to Parliament, meaning MPs have the opportunity to debate the bill before it continues its path to become law.
After this next step, the Bill must be approved by each House of Parliament before it receives Royal Assent, becomes law, and is known as an act.
Why is the Renters (Reform) Bill Important?
While many landlords across the UK operate fairly and responsibly, there is a small majority of landlords who don't.
Without the protection of the rules within the Renters (Reform) Bill, many tenants across the country have been experiencing mistreatment, disrupted home life, and increasingly poor living conditions.
With long-term renting on the rise, it's important to ensure more tenants can live happily and safely in rental properties. These rules may seem stringent, but they are important to protecting tenants living in rentals long-term.
Plus, the new rules bring opportunities for landlords to market their properties differently and potentially attract better, longer-term tenants.
For example, with a tenant's right to request a pet becoming a standard, landlords can market properties as "pet friendly" for certain pets, and only require a request for certain pets (like dogs). This can attract more long-term tenants to enquire.
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