Dominic Morris
Partner
Co-Head of Living and Head of Senior Living (UK)
Article
8
There's been much criticism of the government's apparent hesitation to move the Renters (Reform) Bill ('the Bill') forward through the parliamentary process and get it onto the statute books for the New Year. The Bill has now finished the Public Committee stage, whereby wide-ranging evidence was heard from key voices in the sector; as a result, many significant amendments have been made to the Bill.
We consider the key amendments below – the now amended Bill will be considered by MPs at a date to be announced, meaning that amendments could be kept, dropped, or further ones introduced. We know from the recent announcement by Michael Gove MP that the abolition of s.21 'no-fault' eviction will be delayed until there is further court reform, and no date for that has been given. Meanwhile, the amendments made in the Public Committee Stage are a good reflection of the sector's view of the strengths and weaknesses of the Bill.
The Bill will end fixed-term tenancies and assured shorthold tenancies so that tenancies will instead be periodic and assured. There has been considerable consternation among student landlords in the private rented sector regarding the detrimental impact of removing fixed term tenancies and 'no-fault' evictions. Simply put, students may not be moved on in accordance with the academic year.
This amendment introduces a new ground of possession for landlords – Ground 4A – and allows a landlord to seek possession of a property where it was let to a full-time student/someone the landlord reasonably believed would become a full-time student during the tenancy. The date of the notice seeking possession is between 1 June and 30 September (i.e. the end of the academic year). This ground recognises that landlords in this space operate a cyclical model and require vacant possession in time for the new student year. It allows for mandatory possession (so a court must make a possession order if the ground has been proven).
When the Bill was first published, the Explanatory Notes indicated that Purpose-Built Student Accommodation (PBSA) would not be subject to the reforms so long as the provider was registered for a government-approved code. Therefore, these PBSA operators could still grant fixed-term tenancies and obtain possession after the expiry of the term in the normal way. However, despite this clear legislative intent, there was no mechanism within the Bill to make this a reality. It was expected that a mechanism to exempt PBSA from the tenancy reforms would be introduced via an amendment, but this has not yet happened. As the Bill now stands, PBSA operators are not exempt from the tenancy reform. Therefore, they will have to let on periodic assured tenancies and will need to find a ground of possession to evict tenants (which is not the new ground of possession 4A, above, because that does not apply to PBSA).
The new possession ground 4A only applies to Houses in Multiple Occupations (HMOs). PBSA is not usually considered to be an HMO. This is because a PBSA usually falls within the exceptions to HMOs (as set out in paragraph 4, Schedule 14 of the Housing Act 2004), as it is managed in accordance with codes of practice, usually the Universities UK/Guild HE Code of Practice or the ANUK/Unipol Code of Standards for Larger Residential Developments).
An amendment has been put forward to address the judgment of the Supreme Court in Rakusen v Jepsen and others, [2023] UKSC 9. That case found that a Rent Repayment Order (and other specified penalties) could not be made against a superior landlord; this case was closely followed by those operating a 'rent-to-rent' model. The amendments in the Bill mean that superior landlords can now be sanctioned for various housing-related breaches. Penalties can either be apportioned between the immediate and superior landlords, or else the landlords can be made jointly and severally liable.
In the course of letting a property, it will be an offence to discriminate on the basis that:
Amendments have been introduced allowing for regulations to be made which specify the requirements that must be met in England by qualifying residential premises. There is also scope for enforcement of these requirements by local housing authorities. No regulations are available, so the detail is not yet there, although the introduction of the Decent Homes Standard into the private rented sector (PRS) have been heavily foreshadowed. Requirements for the PRS could include the state of repair of the premises, things to be provided for use by, or the safety, security or comfort of those occupying, and the means of keeping the premises at a suitable temperature.
These requirements would apply to a wide range of tenancies in England (including assured, agricultural and Rent Act tenancies) in HMOs unless the HMO is social housing and the landlord or provider of accommodation is a registered provider of social housing.
Several amendments have been added to strengthen local housing authority powers to uncover and sanction breaches of the legislation:
For more information or queries regarding the Renters (Reform) Bill, please get in touch with Dominic Morris or Şenay Nihat.
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