Renters (Reform) Bill Explained

The Renters (Reform) Bill is set to introduce significant changes to the private rental sector, aiming to enhance tenant security and living conditions. Here, we discuss the key changes you need to understand as a landlord, its relationship with the Decent Homes Standard and the latest developments of the bill.

 What is the Renters (Reform) Bill?

The Renters (Reform) Bill fulfils the government's promise to improve conditions for renters by abolishing 'no fault' evictions and updating the grounds for landlord possessions. This legislation is part of the reforms outlined in the private rented sector white paper released in June 2022. This vital legislation aims to revolutionise tenants' rights and landlord responsibilities within the private rental market, enforcing stricter standards and protections.

What are the key changes in the Renters (Reform) Bill

• Abolition of Section 21 “no fault” evictions: This major reform protects tenants from eviction without a justified reason, ensuring longer tenancy security. In April 2024, it was announced that there would be a deferred prohibition of Section 21 “no-fault” evictions, pending a decision by the justice secretary on whether the courts can handle an increase in repossession claims. The updated proposal allows landlords to evict tenants under specific circumstances, such as selling the property or requiring it for personal use or that of immediate family members. Additionally, the government is considering exceptions to the six-month minimum tenancy for scenarios like tenant death, domestic abuse, or severe property risks. 
  
  
• Standardisation of periodic tenancies: Moving away from fixed-term leases will allow tenancies to naturally progress into periodic agreements, providing continuous protection for tenants. The bill transitions all Assured Shorthold Tenancies to a unified system of periodic tenancies without fixed end dates, simplifying tenancy structures. Initially proposing two months’ notice for tenant departures, revised amendments now require a six-month notice period to mitigate landlord losses and regulate tenant turnover.
  
  
• Extended notice periods for rent increases: Landlords will be able to increase rent only once annually but will now be required to give tenants double the current notice period extending to two months before increasing rent, affording tenants more time to make financial adjustments or contest the rise.
  
  
• Enhanced tenant rights to keep pets: The bill gives a more welcome approach toward pet ownership within rented properties, aiming to reduce the stress and restrictions faced by pet-owning tenants. A landlord must decide to grant or deny permission to tenants to have a pet in their home by the 42nd day following a tenant's request. This period may be extended by an additional week if the landlord requests more information.
  
  
• Introduction of a universal ombudsman: This new framework will handle tenant complaints, focusing on issues like damp and mould, which directly affect living conditions. Swift resolution of these complaints will be mandatory, putting more emphasis on landlord accountability. The ombudsman will have the authority to enforce resolutions for tenants, including mandating landlords to apologise, rectify issues, or pay up to £25,000 in compensation. The ombudsman can also require landlords to refund rent if the provided services or property standards are subpar. Landlords must comply with these binding decisions, with potential Banning Orders for non-compliance.
  
  
• Creation of a new property portal: This platform will serve both private landlords and tenants, giving more transparency and accessibility to the information regarding rights, responsibilities and available services. The portal will "dramatically increase local councils’ ability to enforce against criminal landlords".
  
  
• Applying the Decent Home Standard to the private rented sector: Ensuring that all rental homes are safe, warm, and well maintained as per the Decent Homes Standard will be a requirement for privately rented homes for the first time, raising the quality of housing.
  
  
• Bans on discriminatory rental practices: The bill will eliminate discrimination against families with children and individuals receiving benefits, promoting equal opportunities for all tenants.
  
  
• Overhaul of Rent Repayment Orders (RROs): These reforms will strengthen tenants’ abilities to reclaim rent or seek compensation for unlawful evictions and other serious breaches by landlords. A Rent Repayment Order (RRO) allows tenants or local authorities to challenge landlords at a tribunal for certain offences, including forceful entry and ignoring improvement notices, requiring landlords to refund rent if tenants prevail. The bill expands RROs by adding violations like breaching ombudsman rules, submitting false information to the property portal, and potentially increasing the maximum repayment to 24 months' rent from 12.

One thing to note is that further amendments are likely at the Report Stage, and it won’t pass into statute just yet. The main takeaways are to understand how your rights as a landlord may change and to be mindful of the maintenance and standard of your properties to ensure they conform to a Decent Homes Standard, taking swift action where necessary to rectify any issues.

Renters (Reform) Bill and the Decent Homes Standard

Incorporating the Decent Homes Standard into the Renters (Reform) Bill underlines a commitment to elevating living standards across all rental properties. The introduction of a new private rented property portal and extending access to an ombudsman service for all private tenants will enhance the enforcement of standards and ensure landlords address legitimate complaints promptly, particularly those related to property upkeep and safety issues such as damp and mould.

The 2022 white paper titled, "A fairer private rented sector" proposed introducing minimum housing standards, requiring private rentals to meet the Decent Homes Standard for the first time. During the committee stage, this was confirmed, with local authorities gaining enhanced powers to enforce compliance, including imposing fines up to £30,000, issuing banning orders or enabling tenants to reclaim up to 24 months of rent.

What will the Renters (Reform) Bill mean for landlords?

Landlords need to prepare for a new era of enhanced tenant rights and regulatory standards. Compliance will require updating rental practices, maintaining property standards, and responding effectively to tenant grievances to avoid penalties. The bill aims to balance the rights and obligations of both tenants and landlords, improving housing standards and clarifying expectations. Landlords can still reclaim their properties under the bill but must now justify the reasons for eviction. 

Latest developments

Since its introduction in May 2023, the Renters Reform Bill has progressed through various legislative stages, including debates and committee reviews. It is anticipated to be passed into law by 2024, with the Conservative Party prioritising its enactment before the next General Election. Full implementation of the policies will occur gradually to ensure a smooth transition for landlords and tenants alike.

June 2022:

• The government released a white paper titled “A Fairer Private Rented Sector.”

2023 milestones:

• May: Introduction of the Renters Reform Bill to Parliament
• October: MPs debated the bill during its second reading
• November: The bill advanced to the Committee stage for detailed examination.  

 2024 developments:

• Current: The bill is undergoing the Report stage, where MPs may propose further amendments.
• Upcoming: The final debate, known as the third reading, will determine its progression to the House of Lords for approval. The Conservative Party aims to enact this legislation before the next General Election. Not all provisions will take immediate effect upon receiving Royal Assent.