Private Rented Sector Update – 10 key changes landlords need to know

The pandemic has affected the private rented sector (PRS) in many ways. In the last 14 months we have seen multiple changes to the law to protect renters during this difficult period including banning evictions and increasing notice periods. New rules come into force today, 1 June 2021, and to coincide with these latest updates we have put together a list of 10 key changes landlords in England should be aware of.

The focus up until now has largely been on emergency measures but as the country moves forward with its pandemic recovery, attention is increasingly turning to the Government’s proposals to reform the PRS. We therefore include both current legal updates and longer-term changes to watch out for.

1. End of the eviction ban

The eviction ban came to an end on 31 May 2021. Landlords can now proceed to enforce possession orders and are not restricted to the limited exemptions that have been in force since November 2020.  Landlords still need to give tenants 14 days’ notice of eviction which means in most cases evictions will not take place until mid-June at the very earliest and even then landlords are likely to experience delays as bailiffs tackle the backlog of cases. Bailiffs have also been advised not to carry out evictions where residents are self-isolating or have Covid-19 symptoms. The Government has updated its guide for private landlords which can be accessed here.

2. Notice periods have reduced

As of today, 1 June, notice periods for both section 21 and section 8 notices seeking possession have reduced.  Section 21 notices now require 4 months’ notice and claims must be issued at Court within 8 months of service of the notice. Section 8 notices served on rent arrears grounds require 4 months’ notice where there are less than 4 months’ rent arrears. Only 4 weeks’ notice is required where there are at least 4 months’ arrears.

Look out for further changes to section 8 notices on 1 August 2021 when the notice period will reduce to 2 months where there are less than 4 months’ arrears. It is expected that notice periods will revert to the pre-pandemic periods from 1 October 2021 subject to the Government’s Coronavirus roadmap going to plan. The Government has updated its ‘Technical Guidance on Eviction Notices’ which contains a helpful table showing all the changes to notice periods since March 2020.

3. New prescribed forms for notices seeking possession

The changes in notice periods mean there are new prescribed forms which must be used when giving notice. The forms on the Government’s website have now been updated to reflect the most recent changes. Landlords who have already served notices and are waiting for them to expire may wish to serve a new notice to take advantage of the shortened notice periods. There is nothing preventing a landlord from serving a further section 8 or section 21 notice if one has already been served.

4. Breathing Space Moratorium

The Breathing Space Moratorium came into force on 4 May 2021. This gives those in debt some temporary relief against creditors including landlords. Where a tenant has obtained a breathing space (which can only be granted by an FCA authorised debt advice provider or a local authority), then the landlord  cannot chase for unpaid rent, serve notices seeking possession based on rent arrears or commence or continue court proceedings without the permission of the court. The prescribed form for serving a section 8 notice has been updated to include reference to the breathing space moratorium.

While a breathing space is in force, landlords can still commence or continue section 21 proceedings against a tenant even if the tenant is in rent arrears However, a landlord would not be able to claim any outstanding rent as part of a section 21 claim.

5. Changes to court possession procedure

Practice Direction 55C (“PD 55C”) that modifies the court possession procedure currently remains in force until 30 July 2021. The period for filing reactivation notices (notices to reactivate claims issued before 3 August 2020) expired on 30 April 2021. Landlords still wishing to re-activate these older claims will need to make an application to court and should expect to have to explain the reason for the delay. For new claims being issued now, landlords must continue to comply with the extra requirements set out in the practice direction including providing the court and the other side with a notice setting out what knowledge they have as to the effect of the pandemic on the tenant and their dependants.

Court possession procedure was also modified by the “Overall Arrangements for Possession Proceedings.” This document set out a number of changes to procedure including the introduction of review appointments prior to listing a substantive possession hearing, Covid-19 case marking and an order for prioritising cases. The Overall Arrangements currently have no expiry date and it is unclear whether these arrangements will continue after the end of 30 July 2021, when PD55C is due to end, or whether both will be extended. Given the trajectory set for notice periods and the longer term economic impact of the pandemic, it seems likely that a modified possession process will continue to apply for longer.

6. Right to Rent checks

Temporary measures have been in force during the pandemic to allow Right to Rent checks to be carried out remotely by video call. This adjusted procedure was due to end on 17 May 2021 but the deadline has been extended to 20 June 2021. As things currently stand, from 21 June 2021, landlords will be required to conduct face-to-face checks again. Landlords who have carried out checks remotely during the period when the temporary changes were in force (30 March 2020 – 20 June 2021) will not be required to carry out retrospective face-to-face checks and can rely on the checks carried out under the temporary procedure.

7. New licensing schemes

The last 12 months has seen various additional and selective licensing schemes come to an end and the implementation of some new schemes delayed as a result of the pandemic. However, a number of local authorities have now started, or will shortly be starting, new schemes, for example, Oxford City Council’s new additional licensing scheme commences on 10 June 2021. Landlords and agents should ensure they keep up-to-date on schemes in their areas. Remember that licensing does not just apply to houses in multiple occupation (HMOs) and properties let to a single individual may require a licence if they are situated in a selective licensing area. Managing or being in control of an unlicensed property is a criminal offence and can have serious consequences for landlords including tenants applying for rent repayment orders.

8. The end of section 21

Landlords and tenants have been eagerly waiting for updates on the Renters’ Reform Bill, the Government’s proposed legislation to reform the PRS including abolishing section 21 ‘no fault’ evictions in England. The bill was first announced in December 2019 but there has been limited progress since then. In the Queen’s Speech last month, it was announced that “the Government is committed to building back fairer and having a Better Deal for Renters in England.” Improving security of tenure for private tenants together with strengthening possession grounds where landlords have a valid reason to evict are key areas of reform proposed. The most recent Government announcement is that a White Paper detailing the reform package will be published in the autumn with legislation to follow in due course. A new Renters’ Reform Bill is therefore unlikely to appear before 2022.

9. Life-time deposits

Life-time deposits is another key proposal to look out for in the Renters’ Reform Bill. The Government still appears committed to exploring a new model whereby deposits are transferred between properties to make it easier and more affordable for tenants to move home. It is hoped the Government’s proposed White Paper will set out more detail on how this will work, particularly in relation to joint tenants, where there may be more practical challenges in relation to how the deposit is dealt with at the end of the tenancy.

10. Register of landlords

Finally, what about proposals for there to be a new national register of landlords in England? For some time now there has been a discussion about whether all PRS landlords should be required to join a national register or be subject to mandatory redress scheme membership. While it was unclear whether the Government still intended to pursue this policy, it also received a mention in the Queen’s Speech as part of the Government’s pledge to improve standards in rented accommodation. Therefore, we anticipate there being further discussion on the merits of a landlord register when the Government’s White Paper appears later this year.

Overall, there is a lot for landlords to look out for in the next few months and over the course of the next year. While we should expect to see some return to pre-pandemic procedure as part of the country’s wider coronavirus recovery, longer-term reform is on the horizon and we will have to wait and see what the ‘new normal’ will look like for the PRS.

*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*