Preparing for Rental Reform: What You Need to Know
Nobody likes change. No matter what it’s all about, any sort of kink to the routine can send even the coolest of us into a bit of a flap.
No matter how much we protest though, change is on the horizon in 2023, with rental reforms promised as part of the government’s Levelling Up scheme.
Unsurprisingly, landlords are feeling a bit hot under the collar about new legislations, but what is there to be getting worked up about? We caught up with Carly Jermyn, CEO and founder of Woodstock Legal Services, a specialist in resident and landlord tenant law and landlord herself, to get the lowdown on what to expect, and just how much upheaval we should be bracing for.
Are the new rental reforms a positive thing?
A landlord herself, Carly says she isn’t panicking about the changes, and maintains that for landlords who have got their house in order, there’s honestly nothing to worry about:
We need reform. The aim is to have a fair rental sector. I think the system is a little bit fragmented, a bit broken. It needs work, we do need reforms.
What are the key rental reform changes?
The reforms are all about ensuring the industry is built on some key components:
- High standards
- Stability for tenants
The primary elements for landlords to be aware of are the introduction of the Decent Homes Standard, the changes around section 21 and the requirement to rent to tenants with pets.
The Decent Homes Standard
‘We’ve seen a push over the years about increasing the standard of accommodation. And this is another move towards that’, explains Carly.
The changes require landlords to ensure that their property meets the required living standards for tenants, as set out by government. Most private rented properties that are properly maintained and compliant with all existing legislation should already be above these standards, so private landlords shouldn’t have any concerns, but Carly stresses that it is important to make sure that all your i’s are dotted and t’s are crossed when it comes to ticking off everything on the list:
It’s going to be quite a challenge for some older properties (to meet the standards). And the social housing sectors have struggled. So, it’s a high standard that’s going to be applied to the private rental sector.
What exactly constitutes a ‘decent home’?
You can check out a list of what defines a ‘decent home’ here, but Carly also recommends calling in the professionals if there are any areas that you are unsure about, and also to help manage any projects which may need budgeting for:
Get the experts in so that they can confirm whether they think your property does comply with the standards that are coming in, so that you can plan the work across your portfolio budget for it. Plan it, make sure it’s done early, and then it’s monitored.
What about Section 21?
‘There’s a huge amount in the news and has been for a very long time about section 21s. You know, they’re not particularly in favour for tenants and tenants’ rights groups, and there’s been a push for a long time for them to be abolished, and it looks set to happen’, said Carly.
The change effectively means that in order for a landlord to gain possession of the property, they will have to have a reason for doing so.
The reality is people have always had a reason for doing so – no sensible landlords is going to evict somebody for no apparent reason. But now they will have to prove that ground at court.
Are the new reforms all for the benefit of tenants?
Whilst it may feel that way, actually, no.
Section 21 may seem like a catch all, fool-proof solution, but in many cases, landlords have found themselves stuck in a pricy limbo trying to get their tenants out of their property, while wrangling with legal issues surrounding the notice.
With the new format, it seems (although we shall see how it pans out) that loopholes have been stitched up on both sides of the coin. As Carly explains:
‘One of the positives for landlords about the proposed reforms is that they’re proposing that if a tenant falls into two months’ rent arrears three times over a set period, for example, you can still gain possession as a mandatory ground, which hasn’t existed before.’
‘I think they’ve recognised that often, just before a hearing, tenants would dip below the two month threshold, and that would cause landlords problems in gaining possession, they may end up with a suspended possession order or no order at all.
‘They’ve recognised that it was unfair on landlords. It’s very difficult to deal with tenants that are in arrears repeatedly then bounce back, so they’ve introduced that, and it’s been a bit of a tiny lifeline.’
Regardless of the apparent logic of the change, this is one reform that continues to ruffle landlord feathers. It’s understandable that there is unease in landlord camps, so how can landlords continue to protect their assets, whilst complying with the changes?
‘We know the rough boundaries of the legislation, what they’re proposing and what those grounds will be. And on the face of it, most of those grounds look okay, but the devil will be in the detail’, explained Carly.
‘What landlords need to do is to make sure they’ve got systems and processes, so that if they need to rely on one of those grounds, they’re able to properly evidence that evidence to the court.’
Welcoming pets in rentals
‘As a landlord, and actually, as a lawyer, I don’t really always understand why pets are such a concern for landlords,’ laughs Carly.
Love them or loathe them, we are a nation of animal aficionados, and writing off a section of prospective tenants because of their furry family member is no longer just a questionable business decision, it’s now looking likely to become an absolute no-no.
The new reform looks to state that you are no longer able to refuse a tenant having pets, unless there are reasonable grounds to do so.
Reasonable grounds could include:
- If your property is in a block of flats, and having a pet would be a breach of the lease
- If the welfare of the animal would be at risk (for example 10 dogs in a one-bedroom flat with no garden)
- Concern for other tenants – if an existing tenant has an allergy that would make living with the pet a problem
Carly stresses that an element of common sense must be implemented here, but that embracing pets may be a positive move:
You know, we don’t see that much litigation surrounding damage caused by pets – if I’m honest, it’s quite rare. I suspect there’ll be conversations around those topics, but all in all, I don’t think pets are particularly an issue
Rental reform time frames
So, plenty of change on the horizon. But when is it all coming into play?
In short, nobody really knows! There are whispers that we might see some changes by Spring, but don’t set your clocks by it, nothing has been announced formally yet.
Top tips for Rental Reform Readiness
So, what does Carly recommend you do to get yourself as Reform Ready as you can be?
- Get your house in order: Looking at your portfolio and seeing if there are any properties or tenancies in there that may cause you more of a problem.
- Don’t go crazy serving Section 21s: There are people out there that are making that suggestion and we are seeing a rise in Section 21s.
- Start now: If you don’t have the evidence now that you’d need for an eviction, start to gather it.
- Check the condition: Look at the condition of your property against the Decent Homes Checklist, and plan any tweaks you need to make
- Start any work early: We know how expensive contractors are, we know how difficult it is to get them in there.
To hear the whole conversation, watch the latest episode of the Mashroom Show now, and be sure to join Carly and Team Mashroom on the next episode where we’re looking at Common Claims Against Landlords, which airs on Friday 10th February.
In the meantime, why not head over to the Mashroom Landlord Community on Facebook and join the conversation about the upcoming reforms. We’re all chatting about how it’s going to look for us, and we’d love to hear your thoughts!
See you there!