LANDMARK LEGISLATION FOR LANDLORDS: RENTERS (REFORM) BILL INTRODUCED TO PARLIAMENT

The long-awaited Renters (Reform) Bill introduced to Parliament yesterday [17^th May], marks “a once-in-a-generation overhaul of housing laws”, according to the Government.

The Bill seeks to improve living conditions for an estimated 11 million tenants across England, ending the injustice of unfit homes, unscrupulous landlords, and supporting tenants as the cost of living continues to rise; some of the measures outlined include:

• The application of the ‘Decent Homes Standard’ to the private rented sector for the first time, giving tenants safer, higher quality homes and removing the problem of poor-quality homes in local communities
• Tenants have been given the legal right to request a pet in their home, which the landlord must consider and cannot unreasonably refuse. Landlords will be able to require pet insurance to cover any damage to their property
• The introduction of a new digital Property Portal to enable landlords to understand their obligations, and help tenants make better decisions when signing a new tenancy agreement
• A strengthening of the power to evict anti-social tenants, broadening the disruptive and harmful activities that can lead to eviction and making it quicker to evict a tenant acting anti-socially

The measures introduced are designed to protect and support tenants and their landlords and overall, represent a welcome change to the sector. It has long been blemished by the actions of unethical landlords, problem tenants, and those processes that make it harder for honest citizens to live comfortably and make money from rented accommodation.

“Our new laws introduced to Parliament will support the vast majority of responsible landlords who provide quality homes to their tenants while delivering our manifesto commitment to abolish Section 21 ‘no-fault’ evictions.

This will ensure that everyone can live somewhere which is decent, safe and secure – a place they’re truly proud to call home.” – Housing Secretary, Michael Gove

Section 21 notice – evicted from law

One of the biggest areas of contention in the new Bill relates to the scrapping of Section 21 notices.

A Section 21 notice allows landlords and letting agents to issue an incontestable notice of eviction once a tenant comes to the end of their tenancy agreement, and many landlords rely on this to regain control of their property from problematic tenants. Of course, there are those who would use this notice to evict tenants without good and just reason, or in retaliation to a tenant complaining about their poor housing conditions, but I believe these are in the minority.

Generally, the abolishment of this notice is a positive thing for tenants, giving them greater security in their living situation and the comfort that they can’t be arbitrarily forced to leave their homes.  But for landlords and letting agents, it could make the process of evicting tenants more challenging and time-consuming, leading to costly legal expenses and loss of rental income while a claim goes through the legal process.

Improved processes

I’ve previously written about my concerns of the backlogs that could arise because of the banning of Section 21 notices. If all evictions now must be pursued via a full court hearing, rather than an accelerated procedure as allowed through the Section 21 notice, landlords could face a protracted battle to regain their property and recover the rent payments they weren’t receiving from their tenant during that time, as well as the cost of their legal expenses, at least for those who don’t have a Legal Expenses and Rent Guarantee (LERG) policy.

However, the Bill tabled yesterday seems to address this concern with the introduction of a reformed court system, and more powers to progress cases digitally.

The Bill states that: “For the minority of evictions that do end up in the courts, more of the process will be digitised – reducing delays, and a new Ombudsman will provide quicker and cheaper resolutions to disputes”.

On reading the update published yesterday, I do feel that the legislation is more balanced than previously speculated, and I’m encouraged by the measures that could be put in place to speed up disputes and strengthen powers for landlords to evict problem tenants. But there’s no escaping that for many of England’s circa 2 million landlords, the Renters (Reform) Bill does introduce challenges and a greater potential for legal tussles than before.

So, what happens now?

It remains to be seen whether the push for alternative dispute resolution through a new Ombudsman will indeed speed up the process for landlords and letting agents seeking to avoid the courts or add another layer of complexity for those without the support of a legal adviser. I’m also sceptical of how quickly the digitisation of certain claims will be enacted, our experience with the much-discussed MOJ portal is evidence that a digital portal doesn’t always provide the answer.

In light of the new legislation, it’s time for Legal Expenses Insurance (LEI) providers to champion the benefit of a LERG policy, after all, it seems that more landlords than ever will find themselves in need of its support in the future.

Richard Finan, Director of Strategic Development, Arc Legal Group

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