Renters Reform Bill: Considerations beyond Section 21
After the recent publication of the Renters Reform Bill, it is a good time for landlords to start thinking about how to approach the upcoming change in law in terms of tenancy drafting.
The proposed abolition of assured shorthold tenure will have significant impacts on social landlords; most particularly in relation to:
- probationary periods and starter tenancies – as the Bill is drafted, it will no longer be possible to have a starter tenancy which is either replaced or converted into a fuller tenure agreement once the probationary period is successfully completed.
- short term accommodation – (for example move-on accommodation and other forms of supported and temporary housing), as the usual short forms of AST will not longer exist and be replaced instead by ongoing periodic tenancies (note however that the changes in the Bill will not impact on contractual tenancies issued to cover interim duty to house cases).
- longer duration fixed term assured shorthold tenancies – often but not always in relation to affordable rented stock.
The most obvious outcome to the abolition of assured shorthold tenure will be that the mandatory possession procedure under Section 21 of the Housing Act 1988 will no longer be available, and consequently a landlord will always be required to show a ground of possession in order to obtain a possession order from the Court. There are substantive proposed changes to the grounds for possession contained in the Bill.
In the immediate flurry of analysis around the Bill, a less considered impact to the loss of shorthold tenancies centres around tenancy rights and obligations. How can a landlord deal with the more enhanced rights given to (currently) non shorthold or five year fixed term tenants, which it does not generally offer in relation to residents of shorter term accommodation?
The most common examples of enhanced rights, are the rights to take lodgers, to sublet part of the property, to improve or adapt the property and the right to exchange the tenancy with another qualifying tenant of a social landlord (noting that the right to mutual exchange is one which is required by the Regulator's Tenancy Standard, so it will be interesting to see if the obligation in the Standard to offer exchange rights is amended to take account of the new law, once it is in place).
Succession rights are less likely to be impacted by the Bill, as succession to partners/spouses has always applied to the permitted forms of assured shorthold social housing tenant, however landlords should consider whether their occupancy agreements allow current full assured tenure residents a right of family succession and whether this should continue under the new tenure regime. There is often a tension between succession rights and waiting lists; where housing stock is limited and waiting lists long, some consideration of the impacts of enhanced succession rights would be prudent.
As a first step therefore, over the coming months, it would be a useful exercise for landlords to consider whether enhanced rights should be held back for a period of time before being granted, or indeed whether they should be withheld entirely (although in the latter case bear in mind regulatory requirements and any other external factors such as LSVT contractual obligations or housing grant agreements). Where the context of a landlord's client group is mixed, with different types of housing and housing need catered for, perhaps specific forms of tenancy could be used for particular client groups, so that the tenancies can be properly tailored to differing circumstances.