The Queen's Speech: Bringing into focus the Renter's Reform Bill

Residential

Yesterday, on 10 May 2022, Prince Charles (on behalf of the Queen) delivered up the Queens Speech which brings back into focus the Renter’s Reform Bill. Specifically, page 67 of the Briefing Document highlights the main elements of the Bill which are as follows (albeit spiced up with some of my initial commentary):

● Abolishment of the so-called ‘no fault’ evictions by removing Section 21 of the Housing Act 1988. This has been a popular topic, but the general feeling seems to be that with the cost of living rising exponentially and the private rented sector having almost doubled in size in the past 10 years, this is welcome news for tenants, but do we need more robust proposals?

● Reformation of possession grounds for landlords, introducing new and stronger grounds for repeated incidences of rent arrears and reducing notice periods for anti-social behaviour, ensuring that they can regain their property efficiently when needed. The strengthening of these grounds appears to be addressing the imbalance of powers between landlords and tenants in favour of landlords, so welcome news for landlords. However, other grounds such as what happens when a landlord needs to move in or sell require finessing. There is a call for clear and comprehensive grounds to be given.

● Application of the legally binding Decent Homes Standard in the Private Rented Sector giving tenants safer, better quality and better value homes. Whilst this seems fab, at first flush, we do already have certain protections in place (Landlord and Tenant Act 1985 and the Environmental Protection Act) so the effectiveness of this new tool is yet to be assessed.

● Introduction of a new Ombudsman for private landlords so that disputes can easily be resolved without the need to go to court. It is hoped that parties will utilise this in the first instance, being a cheaper and less litigious way forward, but importantly, the service is voluntary for private landlords.

● Introduction of a new property portal to help landlords understand their obligations and to give tenants performance information to hold their landlord accountable. This looks like an interesting plan and what it eventually looks like remains to be seen; are we talking a central data base with key documents like gas safety and EPC certificates, and will this amalgamate landlord registration which has been discussed previously at lengths?

Interestingly, lifetime deposits were not mentioned in the plans, albeit there has been much dialogue about this before.

Overall, as this is not the first time that we are hearing about the Renter’s Reform Bill and with the government having a lot on its plate including (but not limited to) the Ukraine war, it’s not certain when this Bill will get over the line, if at all. Pessimism aside, perhaps we see the speech as positive signal in the right direction. I will be discussing more of this in my upcoming MBL seminar so do look out for this in due course.

Commercial

In other news, now aimed at commercial landlords, the government has indicated plans to allow local authorities the power to force compulsory rent auctions of properties that have been vacant on UK high streets for more than 12 months; the aim is to drive regeneration through compulsory purchase orders.

There appears to have been a bit of a push-back on this with many property owners feeling that this is simply not the solution. A solution which has been suggested is to deal with heavy business rates. With so many businesses still struggling with the aftermath of the pandemic, it’s unlikely to be financially feasible for them to trade (or bid in the first instance) from town centre premises.

Some say that the scheme will only attract budget shops which will only provide a short-term improvement to the revitalisation of towns.

There is suggestion that commercial landlords, utilising their development rights, may just end up converting their commercial units to residential properties which appears to be safer than renting at an undervalue- although as we know from my earlier post, residential letting does have its own problems.

Overall, we’ve seen a lot of government intervention in the commercial property arena in recent years; first with the mandatory arbitration scheme for COVID arrears and now with a mandatory rental auction scheme, so we know that there is a decent likelihood of this being pushed through. As to its effectiveness, it remains to be seen, but what is unarguable is that our high streets are looking a little dire and something does need to be done about this.

Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to clients of BLM. Specialist legal advice should always be sought in any particular case.

Who to contact

Priya
Sejpal

Associate , London

View full profile >