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Big changes are afoot in the world of residential landlord and tenant lettings with the expected reform bill to be announced this week. From a property litigation perspective, it is undoubtedly a series of changes that will have huge repercussions in the residential letting business.
In March 2021, the UK government announced a series of reforms to the country's rental market aimed at improving the rights and protections of tenants. Michael Gove, the Housing Minister says:
We’re introducing new legislation, it will be out next week and it will change the way in which the relationship between landlords and tenants work, providing tenants with new protection which should ensure that they’re better protected from arbitrary rent increases.
Here is a summary of what the bill contains and how it could impact renters in the UK.
Abolition of "no-fault" evictions
One of the key provisions of the Renters' Reform Bill is the abolition of "no-fault" evictions, also known as section 21 proceedings. Under the current system, landlords can evict tenants at the end of a fixed-term tenancy or during a periodic tenancy without giving a reason. It can leave tenants feeling vulnerable and insecure in their homes. The proposed reforms would put an end to these evictions and provide tenants with greater security of tenure.
Introduction of lifetime deposits
Another significant change proposed in the Renters' Reform Bill is the introduction of lifetime deposits. Currently, tenants are required to pay a deposit at the beginning of a tenancy. At the end of the tenancy, the deposit is returned to the tenant, minus any deductions for damages or unpaid rent. It is not always as straightforward as that. The proposed reforms would allow tenants to carry their deposit from one tenancy to the next, which would save them the hassle of having to come up with a new deposit each time they move. This would also help to reduce the financial burden on tenants, especially those who move frequently.
Reform of the Section 8 eviction process
The Renters' Reform Bill also proposes changes to the Section 8 eviction process, which allows landlords to evict tenants if they have breached the terms of their tenancy agreement. The reforms would make it easier for landlords to use this process and provide more grounds for eviction, including cases of anti-social behaviour and domestic abuse. However, the proposed changes would also give tenants greater protection against retaliatory evictions and would require landlords to give longer notice periods before evicting tenants. At the moment, depending on the ground for possession, it can be as little as 14 days’ notice. That is likely to double.
Improvements to rental property standards
The Renters' Reform Bill also contains measures aimed at improving the standard of rental properties in the UK. Landlords would be required to ensure that their properties meet certain minimum standards before they can be rented out. This would include ensuring that properties are free from hazards such as damp and mould, and that they have adequate heating and insulation. The proposed reforms would also give tenants the right to take legal action against landlords who fail to meet these standards. If ever there was an incentive for landlords to keep their properties in good order, this is it.
What impact could the Renters' Reform Bill have on tenants?
Overall, the Renters' Reform Bill is designed to give tenants greater security and protections in the rental market. If the proposed changes are implemented, tenants would no longer have to worry about being evicted without a good reason, and they would be able to carry their deposit from one tenancy to the next. Landlords would also be held to higher standards, which would ensure that tenants are living in safe and comfortable homes.
However, the proposed reforms could also have some unintended consequences. Landlords may become more reluctant to rent out their properties if they feel quite reasonably that their rights are being eroded, which could lead to a shortage of rental properties in some areas. There may also be an increase in the number of Section 8 evictions, which could lead to more tenants being forced to leave their homes. It is quite possible rents will increase if there are less landlords willing to stay in the market.
In conclusion, the Renters' Reform Bill has the potential to significantly improve the rights and protections of tenants in the UK. However, it is important to consider the potential impacts of these reforms on both tenants and landlords, and to ensure that the rental market remains balanced and sustainable.
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