A flicker of hope for Landlords?
Will the new Rental Reforms Bill mean Landlords are given more freedom to identify good, trustworthy tenants?
A New Rental Regime in the second quarter
The Renters' Rights Bill is set to become law by Easter 2025, earlier than many anticipated. Once the Bill receives Royal Assent, all residential tenancies in England will automatically convert to assured tenancies. This marks the end of assured shorthold tenancies, which will transition to periodic tenancies on the commencement date. Notably, fixed-term residential tenancies will largely cease to exist, with only a few exceptions.
One of the most significant changes is the abolition of no-fault evictions, which currently allow landlords to ask tenants to vacate without providing a reason. Under the new law, landlords must have a valid reason to evict a tenant, supported by convincing evidence presented at a court hearing.
The Bill also introduces sweeping reforms to improve renters' rights. Landlords and agents will no longer be allowed to enter bidding wars or accept offers above the advertised rent. Enhanced safety standards under the Decent Homes Standard will be implemented, rent increases will be limited to annual adjustments capped at ‘market rate’ levels, and new measures will tackle discrimination violations. These changes, among others, aim to create a fairer and more secure rental market.
When the new Rental Reforms Bill comes into effect, it will introduce significant changes to the rental market in England. Let’s explore two changes, both abolitions, that are expected:
- Abolition of Assured Shorthold Tenancies (ASTs)
Current situation: Most rental agreements in England are assured shorthold tenancies (ASTs), which often include fixed-term agreements.
Change: The Bill will convert all ASTs into assured tenancies on the commencement date.
Impact:
Fixed-term tenancies will largely disappear, replaced by periodic tenancies (rolling month-to-month agreements).
Tenants will no longer face mandatory move-out dates based on a fixed term unless specific legal grounds for eviction apply.
- End of ‘No-Fault’ Evictions (Section 21 Notices)
Current situation: Landlords can evict tenants without providing a reason by issuing a Section 21 notice, giving tenants as little as two months' notice.
Change: Section 21 notices will be abolished.
Impact:
Landlords will need a valid legal reason to evict tenants (e.g., rent arrears, anti-social behaviour, selling the property or wanting to move a family member into it).
Evictions will require court hearings, where landlords must provide convincing evidence to justify their claims.
With the end of No-Fault evictions, bringing predicted lengthy and costly court hearings - will the Landlord be offered any remediation?
This is not clear. The new Bill will dissuade landlords from staying in the property market. Favouring the tenant even further, Landlords will see their rights diminishing. Today’s market is in desperate need of rental properties, so what can Parliament do to keep landlords happy?
Perhaps the County Courts will start registering Possession Orders as CCJs (County Court Judgments)?
Currently, Possession Orders that include an order to pay the Landlords costs of obtaining possession are not automatically registered as County Court Judgments (CCJs) as they serve a different legal purpose. Possession Orders are court rulings granting a landlord the right to regain possession of their property, while CCJs are used to record debts that have not been repaid. Often Courts do not register a possession order as CCJ even if the order contain a judgment for rent arears. Consequently, this may allow a tenant(s) with rent arrears to go under the radar un-noticed and assist serial defaulters.
However, the suggestion to register Possession Orders as CCJs raises interesting questions about transparency, accountability, and the rights of tenants.
If County Courts were to begin registering Possession Orders as CCJs, it would mark a significant change in how rental disputes are handled and recorded. Such a move could impact tenants’ credit ratings, making it harder for them to secure future housing or loans. This could be seen as disproportionately punitive, especially in cases where tenants face eviction due to circumstances beyond their control, such as sudden financial hardship. Maybe the answer would be to defer registering possession orders that include an order for payment of the Landlords costs for ‘say’ three months to allow the tenant(s) a further opportunity to avoid a ‘CCJ’ being registered.
Transparent rental agreements
On the other hand, advocates might argue that it would create greater accountability for tenants and landlords alike, ensuring that rental histories are transparent. However, implementing this would require careful consideration of factors such as the reasons for eviction, whether the tenant had an opportunity to contest the case, and how such records could be challenged or appealed.
With the Rental Reforms Bill introducing stricter eviction criteria and removing no-fault evictions, the potential for abuse or unfair treatment may decrease.
Fairness
With the Rental Reform Bill looming on the horizon, and with Landlords facing substantial fines between £7,000.00 - £40,000.00 for getting their documentation wrong or acting unfairly contrary to the New Laws, it seems that what was intended to be a levelling up process for both Tenants and Landlords, the Rental Reforms appear to be swinging heavily weighted in the tenant’s favour.
Landlords need support, most of them are Law abiding citizens and with the ever decreasing demands and costs that they are being caused to incur, it is no surprise that they are leaving the industry, after all, who would want to rent out a property if they thought for one moment that by getting paperwork or a procedure wrong, they might end up being convicted of a criminal offence, when a tenant ordered to pay them rent arrears or costs, may not even have a ‘Civil CCJ’ registered against them and can carry on with their lives unaffected.
How can this be perceived to be just?
Courts
One thing that appears most likely to happen as a result of the New Rental Reforms, is that a Court System that is already bulging at its seams and is unable to cope with its current workload effectively, will in all probability grind to a standstill. The Court will need to deal with many more hearings, there will be longer delays, and Landlords will become more frustrated as a result.
Get Expert Legal Advice
Worried about the impending legal changes? Concerned about rent arrears? Need to evict tenants?
Get expert legal advice from Coles Miller’s highly experienced Debt Recovery Manager Eric Holt, whose specialisms include landlord and tenant disputes. He is based at our Poole office.
