Renters Reform Bill

Answer

The Renters Reform Bill (the Bill) was first introduced on 17 May 2023 to fulfil the conservative manifesto of abolishing 'no fault evictions’ under section 21 of the Housing Act 1988. The Bill aims to implement a complete overhaul of the current rental legislation, including abolishing fixed-term assured tenancies and assured shorthold tenancies, which arguably don’t provide tenants with sufficient long-term security of tenure. The Bill also aims to:

• make it illegal for landlords to refuse to rent properties to those in receipt of benefits or those with children;
• create a national landlord register; and
• introduce a new private rented sector ombudsman, which is intended to be an impartial, independent body that’ll be able to enforce binding resolutions between landlords and tenants, in order to resolve complaints more quickly and cheaply than the current court system.

As well as proposing the abolishment of section 21 evictions, the Bill also creates a more extensive list of grounds for possession based on the existing section 8 possession proceedings contained within the Housing Act 1988.

The overall aim of the Renters Reform Bill is to create a fairer private rented sector with better housing conditions and a greater sense of security for renters to prevent unjustified rental increases and genuine landlords from being undercut by criminal landlords. For example, according to the government, almost a quarter of rented properties currently fail to meet basic decency standards.

Current legislation − section 21 Housing Act 1988

'No fault evictions' are currently governed by section 21 of the Housing Act 1988. It’s not possible to serve a section 21 notice on a tenant to expire during the fixed term of a tenancy. However, a notice can be served to expire after the fixed term has expired and enables a landlord to bring possession proceedings, without the need to rely on any of the grounds of possession under section 8 of the Housing Act 1988. Accordingly, there’s no onus on the landlord to show that the tenant has done anything wrong in order to evict them.

Where a section 21 notice has been validly served (in compliance with the below conditions), the tenant will be given a minimum of two months' notice to vacate the property. If the tenant doesn’t vacate after this time, the landlord can bring possession proceedings against the tenant.

In order to be able to serve a section 21 notice on a tenant, the landlord must have complied with various obligations. Examples of these obligations are as follows:

(i) requirement to protect the deposit in an approved Tenancy Deposit Scheme (where a deposit is payable);

(ii) to have provided the tenant with the relevant documents such as a gas safety certificate, an Energy Performance Certificate, the relevant prescribed information and How to Rent Guide; and

(iii) compliance with the Tenant Fees Act 2019.

Also, landlords must not have been served with a notice from the relevant local authority (eg, an improvement notice or emergency works notice) as this will be seen to be a retaliatory eviction wherein the tenant has raised a legitimate concern regarding the condition of a property. Such a notice invalidates any section 21 notice served on a tenant after the complaint was made. However, there are certain exceptions to this such as where the property is for sale.

The procedure as set out in section 21 of the Housing Act 1988 allows for accelerated possession proceedings to be commenced, which means that the court can decide the matter without the need for a court hearing and decided on the papers alone. The court will grant possession where the above criteria has been complied with, the assured shorthold tenancy has ended, no further assured shorthold tenancies exist and the minimum of two months' notice has been provided by the landlord.

Progress of the Renters Reform Bill

The Bill was introduced in the House of Commons and is currently at the report stage. The Bill has garnered a lot of support from renters in respect of the abolishment of section 21 evictions. However, on 20 October 2023, the government announced that it wouldn’t abolish the current section 21 until "we judge sufficient progress has been made to improve the courts" and that this change wouldn’t be implemented until reforms to the justice system are in place. No timescales were given in relation to these reforms, nor did the government provide further detail about what sufficient progress would look like. Therefore, the removal of section 21 has been somewhat in doubt.

More recently, in a letter to the conservative MPs dated 27 March 2024, it was explained that the Lord Chancellor would be required to publish an assessment on barriers to possession and the readiness of the courts in advance of abolishing section 21 for existing tenancies. This report may give us a greater insight into the likelihood of the abolishment of ‘no fault evictions’.

The upcoming general election scheduled for 28 January 2025 may be significant for the outcome of the Renters Reform Bill. For example, the Labour Party has proposed to remove section 21 evictions prior to court reform.

Impact on tenants

The current status of the rental market means that there are various challenges that tenants currently face. For example, it has been asserted by the government, when introducing the Bill, that evictions with short notice have a range of negative impacts. For example, these periods:

• worsen the educational outcomes for children; and
• mean that tenants find it increasingly difficult to maintain stable employment, preventing families from settling in a certain area.

The abolishment of section 21 evictions would likely provide greater security of tenure for tenants. However, this doesn’t remove a landlord's power to evict their tenant where other circumstances occur. For example, the Renters Reform Bill enables

The Renters Reform Bill has been faced with some criticism from tenants who say that notice periods should be increased to provide greater time for tenants to secure alternative accommodation. Increased notice periods would not apply to section 21 evictions if they’re wholly abolished (as proposed in the Bill).

Impact on landlords

There are circumstances where genuine landlords need to evict their tenants within reasonable timescales, such as where tenants wilfully don’t pay their rent or display antisocial behaviour. Some genuine landlords are also undercut by criminal landlords. The government states that the reforms "aim to celebrate the overwhelming majority of landlords who do a good job and give them peace of mind that they can repossess their property when a tenant is behaving badly or when their circumstances change".

At present, many landlords will rely on the section 21 procedure, even in circumstances where tenants haven’t paid the rent or have breached the terms of their tenancy. This is often because the section 21 procedure is quicker and cheaper (due to the ability to use accelerated proceedings) and because the outcome is more certain as the court doesn’t have any discretion in making the possession order. If section 21 was to be abolished, landlords would have no other option but to pursue possession under the new section 8 grounds. This would involve an in person hearing, resulting in increased delay and strain on the court system, as well as a potential increase in costs for both tenants and landlords alike. It's worth noting that the Bill intends to implement a new private rented sector ombudsman. Yet, since the government sought to delay the progression of the Bill until sufficient court reform had taken place, it’s apparent that the new ombudsman may not be adequate to deal with such evictions.

Conclusion

It’ll be interesting to review the report referenced in the letter to the conservative MPs dated 27 March 2024 in order to identify whether the government still seeks to remove section 21 evictions and what necessary court reform steps are needed in order to do so. It’s clear from recent commentary that there’s mounting pressure to progress the Bill from both tenants and their supporting organisations. However, it seems that there’s an overall sense of apprehension from landlords due to the likely increase difficulty in evicting problem tenants.

Sahana Grimaldi is a trainee solicitor at Womble Bond Dickinson.