As headlined in the recent election campaign, the Government has now published its Renters’ Rights Bill (the Bill), setting out its proposed reforms to housing law in England. The Bill is similar to the previous Renters (Reform) Bill, put forward and ultimately abandoned under the Conservative government, but does differ in a few important areas which we highlight in this insight below. The Bill had its first reading in Parliament this week. Amendments to this Bill may be made as it makes its way through the Parliamentary process.

No more Assured Shorthold Tenancies

These will be abolished, so that only periodic assured tenancies can be granted. All existing Assured Shorthold Tenancies will cease to exist after a set date (which will be established once the Bill becomes law). After this point, all Assured Shorthold Tenancies, whether periodic or fixed term, will become Assured Periodic Tenancies, with a period of no more than one month, the aim of the legislation being that all Assured tenancies are periodic tenancies. This will include demoted tenancies and will affect starter tenancy provisions. Consequently, landlords will no longer be able to gain possession of a property following service of a notice under section 21 Housing Act 1988.

More grounds for possession

The Government is proposing a number of additional grounds for possession as well as amendments to existing grounds for Assured Tenancies, the most notable being:

Mandatory Grounds for Possession

• A new Ground 2ZA will apply where a superior landlord is seeking possession against the immediate landlord of the tenant.
• A new Ground 5C will apply where the landlord is an employer letting the property to their employee for work related purposes and that employment or purpose has ceased.
• New Grounds 5E & 5F under which landlords can seek possession in specific circumstances where the property is required for supported accommodation.
• A new Ground5G will apply where the tenancy was granted pursuant to section 193 Housing Act 1996 and a Local Authority (LA) has informed the landlord that the accommodation is no longer required under that provision.
• A new Ground6A will apply where the landlord requires possession because of enforcement action brought by a LA.
• Ground 8 to be amended to exclude amounts of rent arrears that have arisen because a tenant has not yet received payment of universal credit where they are entitled to an amount for housing as part of an award of universal credit. A major change from the previously proposed Renters’ Reform Bill is that the number of weeks of rent arrears required to serve a notice under Ground 8 has been extended from eight to 13 weeks.
• The Previously proposed Ground 8A, which was applied if there were arrears equal to more than two months’ or eight weeks’ unpaid on at least three separate days in the period of three years before service of the notice, has been abandoned.

Discretionary Grounds for possession

• The wording of Ground 14 is no longer to be amended. Under the Renter (Reform) Bill, the ground was amended so that landlords would have to prove that a tenant has engaged in conduct which is “capable of” causing nuisance or annoyance instead of “likely to” cause nuisance or annoyance. This has been abandoned in the Bill.
• A new Ground 18 landlords will be able to seek possession where a tenant of supported accommodation is not engaging with support services.

Notices of Seeking Possession

A new Notices of Seeking Possession (NoSP) for Assured Tenancies will be published by Regulations.

Notice Period Provisions

There will be new minimum periods for Assured Tenancies to be specified in NoSPs before proceedings can be issued

Notably, the Bill shortens the current Notice period of Ground 7A but states that a possession order cannot be made until 14 days have passed since the service of a Notice under either Grounds 14 or 7A.

Pets

The Bill implies a term into Assured Tenancies to allow tenants to request consent to keep a pet: this section does not apply to social housing tenancies within the meaning of Housing and Regeneration Act 2008.

Tenants’ Notices to Quit

These will have a standard period of two months (or less if specifically agreed with the Landlord). A tenant’s Notice to Quit can be given at any time. Importantly, the tenant will be able to withdraw their Notice to Quit if the tenant and landlord agree in writing to the withdrawal. 

Illegal eviction under Section 1 Protection from Eviction Act 1997 will now punishable with Civil penalties

LA can impose a monetary fine of up to a limit of £40,000.

No lease of over seven years can be an assured tenancy

The change originally proposed in the Renters (Reform) Bill to ensure that no lease with a term of longer than seven years can be an assured tenancy is preserved. This means that it will no longer be possible to argue that a long lease is an assured shorthold tenancy (something that was a major concern for mortgage lenders) and it will make it clear that shared ownership leases of less than 100% ownership are not assured tenancies.

This part will come into effect two months after the Bill receives royal assent. The implications for Registered Providers are significant because it will no longer be possible to serve a Notice of Seeking Possession when dealing with a breach of a shared ownership lease; instead, the landlord will be forced to rely on the forfeiture provisions that are typically used with “full” leases. Landlords will also need to ensure that the rent under a shared ownership lease is properly demanded meaning that, for example, a s.166 notice will be required – something that the courts have recently picked up on and suggested is required: see the recent (but non-binding) County Court case of Sovereign Network Homes v. East.

How Capsticks can help

The Bill will now progress through Parliament and amendments may be made. We will review the progress of the Bill and keep you updated in regards to any Housing Management considerations you should make in respect of your tenancy agreements, pet policies and allocation considerations.

For further information on how we might assist your organisation, please contact Sarah Christy, Steven Wood or Tim Pearl.