The Renters Reform Bill: The future of Section 21 ‘non-fault’ eviction notices
The Government has dubbed The Renters Reform Bill as the biggest ‘shake up’ of the private rental sector for the past 30 years. Changes to ‘fault’ and ‘non-fault’ evictions in the UK rental market may be seen as soon as Autumn 2024. What does this mean in reality for Landlords wishing to regain possession of their rented properties.
The Renters Reform Bill has just passed its third reading in the House of Commons and is back with the House of Lords for further scrutiny. Supporters of the Renters Reform Bill are hopeful these changes will ease what many claim is an increasing need for fairer evictions and assistance for tenants living in less than reasonable conditions. Whereas those in the housing sector warn that the reforms are likely to result in responsible landlords leaving the sector.
A key change introduced by the Renters Reform Bill is the abolition of Assured Shorthold Tenancies (ASTs) and with-it Section 21 ‘no fault’ evictions. Once these reforms are in place Periodic Assured Tenancies will be granted instead. Periodic Assured Tenancies (PRS) tenancies are periodic monthly tenancies with no specified end date and a minimum contractual term of six months. The tenant must remain in occupation for four months before a landlord can serve two months’ notice to vacate. Landlords, therefore, have the certainty of an occupant for only six months at a time. Any ASTs in place at the time the reforms are implemented into law will, however, run to full term.
However, it is not all bad news for Landlords, The Government have confirmed an ‘extended implementation date’ of the changes to Section 21 Notices until a review of the Justice System has been undertaken, for fears the reforms would result in an increase in Section 8 or ‘fault’ based evictions, overwhelming the Courts.
The reforms promise landlords extended grounds to repossess where a tenant is exhibiting anti-social behaviour or persistent non-payment of rent. The current legislation provides a strict threshold for Landlords wishing to serve a tenant with a Section 8 ‘fault’ based Notice.
A Section 8 Notice can only be served when a tenant is in arrears of a minimum of 8 weeks’ rent (if rent is paid weekly), two months’ rent (if rent is paid monthly), one quarter rent (if rent is paid quarterly) and at least three months’ rent (if rent is paid annually). Up until the date of the hearing the Tenant is able to clear these arrears and avoid an automatic Order for Possession. Persistent non-payment of rent would indicate a less stringent approach, which is positive for landlords.
However, at present we have limited guidance as to what these measures will look like in practice, or how they will ensure confidence for landlords wanting to regain possession of their properties.
The Government has repeatedly affirmed the Bill is not intended to be a barrier for Landlords, but rather a move towards fairer terms for renters, ensuring a secure and decent home, whilst providing confidence to landlords to continue to invest in the UK Property market.
The impact of the reforms appears to have been ‘watered down’ due to the persistent delays to the Bill’s introduction. Even if the Bill was to be introduced in Autumn of 2024, it does not seem that it’s full impact would be felt until a review of the UK Justice System is undertaken at an unidentified date, meaning a delay in the abolition of Section 21 Notices. However, Landlords should always be live to the fact this seems to be a real possibility in the coming years.
We will ensure to keep you updated as the Renters Reform Bill progresses. Any questions with respect to gaining possession of your tenanted property please feel free to get in touch with a member of the Litigation Team.
