Renters Reform Bill - IMPORTANT

 

I am aware that understandably, a lot of concerns have been raised about the Government White Paper. I have not read the 83 page version however want to share some views.  This is the biggest change to lettings since 1988, so I make no apologies for a long update. Some of the press coverage has been disturbing with most headlines distilled down to ‘Landlords forced to allow pets.’  The claim is it will redress the balance between landlords and 4.4 million tenants in the private rented sector (PRS).  It will be a major reset of power between tenants and landlords

 

This pretty much mirrors what happened in Scotland, and that all worked out ok despite the fears. Also, this isn’t the finished legislation. It will go to committees & working groups before being batted between the House of Commons & House of Lords for amendments. Finally, it remains very short on detail. I have made some notes on the key points below. These are opinions based upon what I know so far.

 

 

Abolition of section 21: All tenancies will likely be periodic from the start, leaving tenants free to give notice and exit. Landlords will be able to evict tenants with legal cause under new Section 8 grounds. Those grounds are to be added to. The detail of the actual legislation will be key and, as yet we don’t know what it is. Landlords will also be able to move into their properties or move their family members in.

 

Blanket bans: You will not be able to ban renting to families with children or those on benefits. I am on record as saying any discrimination is wrong. Sadly, this will lead to private landlords adopting the same approach as some social landlords and simply telling tenants that their income before benefits is too low and that they cannot afford the property. The fact is, where a landlord has a choice of tenants, they will clearly opt for the one who suits them best.

 

Rent review: This lacks any real detail however it seems that the principle of s13 (form 4) may well apply to all rent reviews giving a tenant an opportunity to appeal. Our rent review clause is not an arbitrary one, and rather a demonstrable mechanism.

 

Pets: Ignore the Daily Mail claiming landlords will be forced to accept pets. This is untrue. Our ASTs cover this, and the proposal is unworkable. For example, what if dogs are prohibited in the headlease where you have a leasehold property ? A landlord only needs to consider a request and give a reason to decline the same. What is a valid reason?

 

A private-renter's Ombudsman: This is good news for us. Will landlords want to be open to redress or ask us to take on that burden? This will include rent repayment orders for landlords who don’t undertake repairs or meet the decent homes standard

 

Decent homes standard: It is long overdue to apply the Decent Homes Standard to the private sector. It’s a ‘low bar’ and frankly very few of our properties won’t meet this standard.

 

Landlord Portal:   Government says this is not a landlord register and rather you have to register for the portal – it could be an advice portal for landlords but with some information from the register of rogue landlords and agents included.

 

Recovering possession: There is to be new powers to recover possession from ant-social tenants and grounds on rent arrears are to be improved. Bailiff resources are to be improved and there is to be a drive to list initial hearings sooner in ASB cases.

Deposits: Don’t expect ‘lifetime’ deposits any time soon as no one has yet come up with a workable plan. Ultimately, someone will have to fund or insure it. It remains a vote winning soundbite devoid of any substance.

 

Other matters: There will be a new ground for possession for landlords who want to sell. It is not clear how landlords can prove this. In Scotland a third of landlords are accused of fibbing about their plans to sell or simply make little effort to do so.  Landlords may simply have to list properties for sale and then have them sit in limbo for weeks while seeking possession and, even then, they could just withdraw the properties from sale once the tenant vacates. It is important to note that students are included and so, as it stands, the student let market will face significant changes. Landlords will not be certain that students will vacate and that they will be able to go ahead with new tenancies. Therefore, they are unlikely to execute tenancies in advance and instead, leave them in abeyance until they can be sure that they will get possession. Where there is a group of students sharing and one drops out, they may also seek to give notice potentially leaving all the student group without accommodation. Depending on how the legislation is written two months may be the statutory notice period or it may be a minimum notice period with tenants having to give longer notice if they pay rent in advance. Some landlords and agents may move to quarterly payment just to gain a longer notice period. We also don’t know how this will work with joint tenants. Currently, in a fixed term tenancy all tenants must give notice together but in a periodic tenancy only one tenant needs to give notice.

 

In summary The White Paper is little more than a list of proposals which will be subject to scrutiny and amendments. For this reason, we will not be amending anything until the legislation is released & scrutinised.  As always there will be benefits and opportunities.  I suspect tenancies will become longer for one. As always I will keep you informed, Best Wishes, Chan

 

 

Yours Sincerely

 

Chan Khangura BA (Hons) DipRLM MARLA MNAEA

Proprietor & Managing Director Whitegates Estate Agents Huddersfield & Brighouse

Owner Whitworths Managing Agents

Owner Easy Lettings Northwest

Owner Linden Lettings

https://huddersfieldproperty.blogspot.com/