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The government has published its draft of the Renters Reform Bill and it was presented to parliament last week. Before becoming law, the bill will have to pass through the various parliamentary processes, undergo scrutiny and possible amendments. It is unlikely to be finalised this year and may only become law in 2024 with a further period of transition for new and existing tenancies. Whilst the initial press headlines may have caused concern, the details in the proposal offer landlords far more reassurance and may in fact prove advantageous to many. Here is a brief summary of the key highlights which are relevant to you:
The most common type of tenancy for many landlords is an Assured Shorthold Tenancy, or ‘AST’. Moving forward this will be replaced by an open-ended, rolling agreement, known as a periodic tenancy. Periodic tenancies already exist today, typically when a tenancy continues on a rolling basis after the initial fixed term has ended. Annual rent increases in line with market rents will still be permitted.
Currently, a Section 21 notice allows a landlord to regain possession of their property without providing a reason and this has been the most publicised change within the reforms. In our experience it is highly uncommon for landlords to evict a tenant who is paying rent on time and looking after their property. Landlords will still be able to regain possession based on specific circumstances or grounds for possession under a revised Section 8 notice (see below).
Landlords can still evict a tenant when they fall into rent arrears. There will also be increased protection for landlords if the tenant has fallen into repeated arrears or in cases of anti-social behaviour. Crucially, if landlords want to sell their property or are moving back in, you will still be able to do so. The government also plans to digitise the possession process to improve speed and efficiency against the current system.
Tenants will now have a legal right to request to have a pet in the property. However, as a landlord you will be able to refuse such a request under reasonable circumstances, such as restrictions under your superior lease. Should you consent to a pet you will be able to insist that the tenant takes out a pet insurance policy to cover any potential damage. This is currently prohibited under the Tenant Fees Act 2019 and would be a welcome change in order to further protect landlords.
A new private rented sector ombudsman will be introduced as a resolution service for private landlords and tenants. Additionally, a private rented property portal will be created to help landlords understand their legal obligations and give tenants access to view landlord compliance.
As a landlord you do not need to take any action at this time. As the bill makes its way through Parliament we will receive more detailed information and we will keep you fully informed throughout this process. Given these impending changes, there has never been a better time to be using our fully managed services so that we can ensure you are kept fully compliant and up-to-date with any future changes in legislation.
Should you have any questions or require any further advice please do not hesitate to contact me.
