The Government has announced plans to introduce some of the biggest changes the private rented sector has seen for years. The legislation is still in the planning stage, but we have been given an insight into the sorts of changes that could be introduced next spring.
- What? Legislative changes as a result of the ‘Fairer Private Rented Sector’ White Paper.
- When? Expected within the next six to 12 months and will apply to new tenancies first before being applied retrospectively.
- How? Designed to level the playing field for approximately four million tenants giving them more security and stability. New laws, processes and systems will be introduced, although the balance between tenants’ power and landlords’ rights is tricky
Expected changes to tenancies include:
- All tenancy agreements must be in writing.
- No fixed-term tenancies (i.e. six or 12 months), and all tenancies will be periodic.
- All tenants are to be able to give two months’ notice that they are leaving at any point in the tenancy.
- No automatic rent review clauses.
- Rent is reviewed no more than once per year, by two months’ notice only.
- No ban on pets, but insurance can be insisted on.
- No ban on DSS or families (possibly extending to no ban on vulnerable people or prison leavers).
However, where there is demand for a property, will the Government make taking such renters mandatory above others? The Property Portal will be created as a single place where landlords can review their compliance with rules.
Decent Homes Standard
The Decent Homes Standard has applied to social housing for many years, but the Government has resisted applying it to private renting until now.
It is currently estimated that one million homes in the private rented sector do not meet the Decent Homes Standard. Breaches will be enforced by local councils and there are expected changes to notices, and no more section 21 Notices.
All section 8 Notices must be served because of a tenant’s fault or landlord’s reasonable ground.
The deposit must be protected, but there is no indication at present that other requirements (e.g. EPC, Gas Safety Certificates etc) must be proven prior to serving notice.
In terms of rent arrears, the mandatory possession ground for rent arrears becomes three instances of being in arrears of more than two months within a three-year period. However, rent is not classed as in arrears if it is caused by the timing of welfare benefit payments. The notice period for rent arrears is increased to four weeks but the notice period for serious antisocial and criminal behaviour decreased.
Expected changes to the court process
There is no proposal to introduce a new Housing Court. ‘Wide-ranging court reforms’ are expected, but details have not been set out. A paperless process is expected with cases sorted according to priority.
Mediation and advice to be more widely available, and the First Tier Tribunal will hold trials relating to disrepair claims and rent increases.
The new property ombudsman
- Membership will be mandatory.
- Available remedies will include compensation up to £25,000, mandatory apologies, obligation to provide information and undertake
- Their decision will be binding – and can be enforced through the courts.
Enforcement against landlords
Councils are to be given new investigative powers and the ability to issue Civil Penalty Notices – effectively making it a criminal offence which can be heard in the Magistrates’ Court.
Rent Repayment Orders mean that breaches of the Decent Homes Standard can require rent to be repaid to the tenant and the Property Ombudsman can award compensation to tenants for breaches.
There will be restrictions on marketing properties after tenants have been served notice and a Rogue Landlord Database will be set up, and entry onto the database will be non-negotiable.