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A Legal Take on the Rental Reform White Paper

On 16 June 2022, the Government introduced a White Paper called “A Fairer Rented Private Sector”. It proposes the biggest changes to the legislation on residential lettings for 30 years.

The headline from the White Paper is that the Section 21 procedure, the so called “no fault eviction,” will be abolished.

The White Paper talks about striking a balance between the need for tenants to live in their properties without fear of being evicted but balanced against the need for landlords to recover possession of their properties when required. This note looks at how this aim will be achieved and what will replace the Section 21 procedure.

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No Fixed Terms

Only periodic tenancies will be allowed under the new rules.  All fixed terms will be abolished and it follows that break clauses will no longer be permitted.

Tenants will have the ability to terminate tenancies on giving two months written notice.

Other Terms of New Tenancies

There will be a requirement to have a written tenancy but certain other practices are to be banned. In particular there is to be a ban on preventing lettings to families with children or to those tenants who are in receipt of benefits. In addition tenants are to be given a right to request pets – and landlords cannot unreasonably refuse this request.

Rent Increases

The existing system for a landlord seeking a rent increase is essentially retained. A landlord starts the process by serving a notice with a proposed new rental figure.  Under the new rules, the tenant now has two months to object. Once that happens, the dispute is referred to the First Tier Tribunal who will then determine the new rent.

It follows that automatic rent increase clauses in tenancy agreements will be banned

Rent Control

The White Paper says that the government does not support “the introduction of rent controls”. The thrust of the document is that the market and the First Tier Tribunal will regulate the level of rent for each property

Grounds for Possession – Landlord Circumstance Grounds

Amongst other grounds there will now be three mandatory grounds on which landlords can regain possession of their properties – (i) when they wish to sell the property (ii) when they or a member of their family want to move into the property and (iii) when they wish to demolish or substantially redevelop the property. The notice period for each of these grounds will be 2 months.

A landlord will need to produce “evidence” to satisfy one of these grounds. Further guidance is awaited as to what this required evidence will be.

There is an obvious “loophole” to the selling and moving grounds whereby a landlord uses this ground to secure possession and then subsequently decides to re-let the property to another tenant. If this happens, the landlord is prevented from marketing and reletting the property for a period of 3 months following the use of this ground.

Grounds for Possession – Tenant Fault / Circumstance Grounds

When it comes to the tenant fault grounds, the standard Section 8 procedure where the landlord can obtain a possession order by establishing two months arrears both at the date of the notice and at the date of the hearing is retained.

In addition another mandatory ground has been introduced to deal with persistent rent arrears – so, where the tenant has been in at least two months arrears at least three times in the past three years, this will be another ground for possession.

The other tenant fault grounds (eg other breach of tenancy, anti social behaviour) under the old system have all been retained. However these grounds tend to be discretionary.

As a reminder – a mandatory ground means that the landlord just has to prove that ground to secure a possession order; a discretionary ground means that even if the landlord can prove the possession ground, the judge still retains a discretion whether to actually make a possession order. Judges frequently make suspended possession orders on discretionary grounds because the grounds tend to be less serious and they want to give tenants one last chance.

Full details of the proposed grounds for possession, their relevant notice periods and whether the ground is mandatory or discretionary can be found here.

Court Procedure

At the same time as the White Paper, the government has produced its response to its consultation on the creation of a specialist Housing Court. The response to the consultation is that the government does not believe that this step is necessary. 

What is proposed in the response to that consultation and in the White Paper are further court reforms to speed up the existing possession procedure. Whether there are any changes which make a material difference to the speed and efficiency of the existing system remains to be seen.

In addition, under the Section 21 procedure, there was no court hearing in straightforward cases. Under the new rules, the proposal is that every possession case will be listed for a hearing. Again the impact on the court system of this proposal remains to be seen. 

Ombudsman

There will be a new Ombudsman covering all private landlords. The Ombudsman will have the power to “put things right for tenants” including compelling landlords to issue an apology, provide information, take remedial action and/or pay compensation of up to £25,000.

It is anticipated that the Ombudsman will hear complaints about the behaviour of a landlord, the standards of the property or where repairs have not been completed within a reasonable timeframe.

Property Portal

A new digital Property Portal will be set up to which all private landlords must join. The aim is to provide a single “front door” to help landlords understand, and demonstrate compliance with, their legal requirements. It will also assist local councils with their enforcement powers.

Agricultural tenancies

A new mandatory ground will be introduced to allow agricultural landlords the power to evict a tenant if the property is needed for an incoming worker.

Holiday Lets

The new rules will not apply to holiday lets.

Implementation

The Act, when passed, will set out two implementation dates. After the first implementation date, any new tenancies, which would have previously been Assured Shorthold Tenancies under the old system, will be governed by the new rules. There will then be a second implementation date after which all existing Assured Shorthold Tenancies will convert to the new rules.

The Government will give at least 6 months notice of the first implementation date and there will be at least 12 months between the first and second implementation dates which means that there will be a period of at least 18 months in which to convert existing tenancies to the new rules.

* Rex Cowell is a partner and specialist in property litigation at national law firm Excello Law *.

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    Hmmm, so where do Landlords go to complain about the behaviour of tenants, the damage they have inflicted on a property, and the money they owe? Are they going to have to pay up to £25,000 compensation? Thought not. Bit one sided isn't it? I foresee a tsunami of evictions before all this becomes law.

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    Absolutely right! What small, private landlord, in their right mind, would be prepared to operate a business in a legal framework which victimised them like that!

    The injustice involved is really immoral.

     
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    Agriculture tenants can be thrown out ? Hmm, surely they need protection or is it so cheap labour can be imported from oversea ? Now who are the big landowners in this country ?

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    Surely it just means the house goes with the job, if they aren't doing the job any more then the house is needed for whoever is.

     
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    It’s not a white paper it’s a black paper and a black lie.
    They don’t know the meaning of the word fairness. They are the scum of the earth and we are supposed to live in a democracy. So now instead of Landlords given the Tenants 2 months notice, the Tenants give the landlord 2 months notice. The Landlord have lost all control of his property have the Russias take over. It’s Private Freehold Property none of their business whether I want it for a Family member, or to sell or keep, who’s property is it anyway, we didn’t get any help from them when we bought or need their advice or their rubbish interference. So now we will not be allowed to choose out Tenants but must take all sorts. including false Benefit Tenants which is what most of them are already, you are destroying Society. Further there will now always have be a Court Case needed to stitch you up properly and make more billions for so called justice System. Oh yes we we can go to First Tier Tribunals if we have a death wish, some of their staff are ex-Council employees brilliant. We are loosing complete Control and our Property is been confiscated. I suspected this 4 years ago that this was going to happen when a young guy from the Department still wet behind the ears attended a Landlord meeting and said exactly what this Bill contains, he said he was working on it. There you go, the Bill is not safe and should instantly scrapped.

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    It is black because it is based on malice towards landlords.

    It is leading to the demise of the private rental sector. It does not give tenants more rights, it gives them no rights at all to a home as most landlords will not operate when there are laws which do not recognise the rights of private contract.

     
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    A house with the job is a total disaster in an Agricultural setting. I can comment on that one, a first cousin of mine had such employment for 20 years at least, he had some difficulty including marriage break up. He was hard worker good at his job
    and well liked, However the Boss man got old and sons took over he then got the cold shoulder not suited to modern generation computers being alien to him etc. He ended up with nothing and got bad health. When he started that job he could have bought his own house like every one else for £4k at that time, so instead of working for a pittance because of the house supplied, he would have ended up with a a house worth £250k / £300k, waste of a life having once worked on the 14’000 acres from Sandy to Hitchin.

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    The White/ Black Paper says. The Tenant must be allowed to live in his Property without fear of eviction and there’s the problem it’s not his Property.

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    If they have no fear of any repercussions they will behave accordingly. I.e. badly. I forsee society breaking down. More selling now, and even more selling once this rubbish kicks in and landlords sell just to get out.

     
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    Yes Nick I also see society breaking down, the s... hitting the fan, who ever is in government when that happens will have one very big problem, they have been warned

     
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    Just why does the NRLA have any members? Beadle is a disaster !

    Fery  Lavassani

    Edwin, I am an Accredited Member of the NRLA. Except having access to the forms and seminars that you pay for, separate from your annual membership fee, they do ...all. I personally approached Mr. Beadle asking him to put the question of right of freeholder, in the light of open ended tenancies, to the Housing Minister for the purpose of Section 1 of the LPA 1925, he just fobbed me off. I also told him that the chap you send to be interviewed by the BBC, to put our points across, against representative for the Shelter, was so poor that my grandson of 6 could do better job than him. I am a member, but they do not or I better say, they are not capable of representing me.

     
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    It's not just the NRLA, Eastern Landlords are also a waste of time and money now, all we get are zoom meetings , hopeless, my DDR has been cancelled, so as of my next renewal date I will cease to be a member after 30 yrs

     
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    What does Ben Beadle think he is doing by saying he has no problem with S21 going??? He is supposed to represent landlords.

    I think we would be better off with Jeremy Beadle running the NRLA. And he's dead.

     
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    I was in the NRLA but l read carefully some of the officers beliefs and realised that they were a woke organisation. So l left. They are in favour of cpd, which in its own would make letting uneconomical. I rang them and have e mailed them, they are awkward to deal with, and l was explaining that if my wife and l charged a market price to our labours, we would be making a thumping loss. Especially during covid. They were not sympathetic.

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    Andrew, society has broken down ! GB news, mark steyn, reported that just over 1% of crimes are brought before the court. That forcing children into what are sex slaves, is ignored and that a man in Sandwell got 44 months for the raoe of two girlrls. The sun newspaper is reporting on council estates around the country being smashed up !

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    Yes Edwin, and this is just the tip of the iceberg, things are going to get much worse, even my neck of the woods, Norfolk, normally known to be mainly crime free, towns like Gt Yarmouth and Thetford have no go areas

     
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