Landlords' Guide to the Renters Reform Bill and Section 21 Notices

The private rental sector is currently undergoing some of the most significant and ground-breaking changes in recent memory. The Renters Reform Bill, which was introduced in May 2023, proposes some of the biggest alterations to private renting in decades, and as a landlord, it’s crucial that you understand what these changes mean for you and your rental properties.

One of the most significant reforms under this Bill is the proposed abolition of Section 21 rental notices, otherwise known as ‘no-fault’ evictions. Understandably, this has caused some questions to be asked among landlords, where clarity is needed to establish what replaces these sections and whether any existing tenancies will be affected. Fear not, because this article will explain everything that you need to know about the abolition of Section 21 notices and the Renters Reform Bill.

What Are Section 21 Notices?

A Section 21 notice is a legal notice a landlord can give to a tenant to regain possession of a property at the end of an assured shorthold tenancy. This allows landlords to evict tenants without having to give a reason.

Section 21 notices have been a cornerstone of the private rental sector for many years. They provide landlords with the flexibility to take back control of their property for any reason, such as a willingness to sell the property, move into it themselves, or conduct large-scale renovations.

Normally, landlords are forthcoming – either directly or through a professional letting and property management agent – about proposed rent increases ahead of fixed-term tenancy expiration dates, and rarely is a Section 21 notice ever issued to compliant and transparent tenants. Should disputes arise, landlords can request that tenants vacate the property by an agreed date under Section 21 terms.

However, tenant rights groups have long argued Section 21 notices leave renters vulnerable to ‘revenge evictions’ if they complain about poor conditions or unfair rent increases. Section 21 notices have long provided tenants with little long-term security, given that the landlord has the authority to evict under any terms.

Why Landlords Should Consider Section 21 Notices Carefully

The Renters Reform Bill proposes to completely abolish Section 21 evictions. This means landlords would no longer be able to evict tenants at the end of a fixed term without good reason.

Instead, landlords will have to rely on Section 8 notices which require them to provide specific evidence and ethical grounds for evicting tenants. This could include rent arrears, anti-social tenant behaviour, or needing to sell the property, among other reasons.

However, many landlords are rightfully worried this removal of ‘no-fault’ evictions will leave them in a difficult position. Many believe that the complete abolition of Section 21 will:

• Reduce flexibility and control over their property
• Make it harder to end tenancies with problematic, disruptive, or dangerous tenants
• Increase void periods between tenancies
• Cause difficulties selling or moving into their property

What’s more, there are widespread concerns the changes will cause landlords to leave the property sector altogether, reducing the supply of rented accommodation.

What’s Replacing Section 21 Notices?

Alongside abolishing Section 21 notices, the Renters Reform Bill aims to give the private rental sector a complete overhaul. Some of the key reforms include:

New Section 8 Grounds for Eviction

New mandatory and discretionary Section 8 grounds for eviction will be introduced so landlords can still end tenancies for legitimate reasons.

This includes new grounds if the landlord wishes to sell or move into the property themselves. However, to prevent false claims and unjust Section 8 notices, landlords will need to meet certain conditions when issuing them.

Open-Ended Tenancies

Most tenants will be given open-ended tenancies or rolling monthly contracts after 6 months, instead of lengthy fixed terms. Landlords will still be able to end these with several months’ notice through specified grounds.

Property Portal Requirements

Letting agents and online portals will need to make clear if a property is still under an existing tenancy before advertising it as available to let. This aims to avoid unlawful evictions or immediate termination of tenancy agreements.

Rent Cap

Private rents will be capped annually in line with a yet-to-be-determined measure of inflation. This aims to improve affordability for tenants, who are understandably feeling the difficulties of high rent prices – particularly in London and the South East – alongside other cost of living struggles. Landlords also have to be mindful of proposing rent prices that are considerate of inflation and market demand.

Registration Requirement

All private landlords will need to join a national register and meet minimum legal requirements around property conditions. Trading standards will be able to issue fines for breaches or properties that do not meet the basic living conditions criteria.

Tribunal System

A new specialist housing tribunal will be established to deal with minor disputes between landlords and tenants quickly and cheaply outside of the current court system. This will hopefully streamline many disputes around evictions and prevent a backlog of cases from developing.

Section 21 Notices and RRB FAQs

Many landlords will still have questions about how the proposed changes to evictions will work. Here are answers to some common queries:

When will Section 21 notices be abolished?

The Renters Reform Bill is still making its way through Parliament. If passed, the government aims to abolish Section 21 notices by late 2024. Existing tenancies would be unaffected until renewal.

Can I still use Section 21 notices until then?

Yes, Section 21 notices can still be served on current tenancies until the new law comes into effect. Landlords’ and tenants’ existing obligations remain unaffected.

What if a fixed-term tenancy ends after abolition?

Tenancies will automatically become periodic rather than needing to be renewed for a fixed term. You’ll need to use Section 8 grounds to end such a tenancy.

What about problematic tenants?

You’ll still be able to evict for contract breaches like rent arrears and anti-social behaviour using Section 8 notices. The new mandatory grounds will also help address issues and outline the most efficient procedures for evicting problem tenants.

Can I raise the rent when the new rules start?

Rent increases will be capped each year, likely pegged to the CPI or similar. You won’t be able to raise rents arbitrarily when new rules apply.

Will I still be able to use a letting agent?

Yes, you can still use a letting agent to help manage your properties if needed. They, however, will not be able to issue Section 21 notices on your behalf once the legislation comes into effect.

Understand Your Options When It Comes to the Renters Reform Bill and Section 21 Notices

As a landlord, you must understand how proposals like abolishing Section 21 notices and the wider implications of the Renters Reform Bill will impact you. This Bill will change the private renting space significantly for years to come if passed in its current proposed form.

While concerning for some, for many landlords, the new grounds for possession will provide enough flexibility to take back control of your property when genuinely needed. The government hopes improved rights will also encourage more people to rent long-term, and provided that renting can become more affordable in the long run, hopefully, the sector will not take too big a hit.

Make sure you seek professional advice on complying with new requirements as the reforms take shape. With change ahead, understanding your options will be key to remaining an effective and reliable landlord.