The Renters (Reform) Bill: CLA analysis

This week saw the introduction of the Renters (Reform) Bill in Parliament. The bill has been on the cards since 2019 and follows last summer’s white paper: ‘A fairer Private Rented Sector’.

It fulfils the Conservative Party’s manifesto commitment of removing section 21, also known as the notice-only or “no-fault eviction” possession route.

The advantage of section 21 is that it has helped landlords avoid the lengthy court delays and associated costs that come with pursuing a section 8 possession. For this reason, landlords use section 21 to deal with anti-social tenants, tenants in rent arrears and multiple other reasons rather than pursue the section 8 route.

The bill introduces some new grounds for repossession for landlords, such as where they wish to sell the property or move in a close family member, but this will do little to reduce the uncertainty for landlords who fear that, until the courts are properly resourced, they will not be able to deal with the additional burden that will be placed on them in the absence of section 21.

The CLA has been working hard to ensure that the existing grounds for repossession are strengthened. We are pleased to see a tightening up of the rent arrears grounds and the acknowledgement that the ground for anti–social behaviour must be made to work in practice. It will still be possible for landlords to raise rents every 12 months in line with market levels.

We have long-argued that rural areas have unique challenges when it comes to the private rented sector. As a result of our lobbying work, the bill contains a new ground for possession where the property is required for an incoming agricultural worker. The CLA will continue to lobby for the definition to be appropriately widened. Additionally, the bill strengthens the “employers’ ground” by ensuring that possession of a property is granted when an employment contract ends – thereby reducing the element of discretion and uncertainty.

The bill also sees the end of the Assured Shorthold Tenancy and states that all assured tenancies are to be periodic and capable of being ended by the tenant by giving notice. The CLA has consistently argued that longer fixed term tenancies should be treated differently, and it seems we were listened to. More detail on tenancies of more than seven years will be in our analysis.

Despite previous announcements, the bill does not introduce a ‘Decent Homes Standard’ to the private rented sector. However, the Department for Levelling Up, Housing and Communities has told the CLA that the government is still committed to this change and will respond shortly to last September’s consultation on how the standard could be delivered in the private rented sector. You can read the CLA response to that consultation here.

The bill makes provisions to allow the secretary of state to require that all private rented sector landlords (including prospective ones) to be members of a “landlord redress scheme”, aka a private rented sector Ombudsman. Some details are set out in the bill but future regulations will need to be scrutinised. The stated aim is that this will provide “fair, impartial, and binding resolution to many issues and to be quicker, cheaper, and less adversarial than the court system.”

As expected, the bill also introduces a private rented sector database, previously described as ‘The Property Portal’. This database aims “to help landlords understand their legal obligations and demonstrate compliance”. It is also intended that the database will help councils target their enforcement activity against the worst offending landlords. There is likely to be a fee to register, and the CLA will provide more detail to members on this in due course.

The bill states that landlords must consider and may not “unreasonably refuse” a tenant’s request to keep a pet. To balance this, landlords may make it a condition that the tenant obtain pet insurance against damage or they may recharge the tenant for increased insurance costs borne by the landlord due to a pet being kept at the property.

While some of the provisions in the bill are concerning for members, there are still opportunities for the CLA to influence government thinking and lobby for amendments to the bill. We will continue to work closely with our Parliamentary and Civil Service contacts to make sure that this bill is drafted to minimise any negative impact on the rural private rented sector.