The death, the resurrection and the death again of the Renters (Reform) Bill

 Sean Hooker, Head of Redress scheme

 

 In his latest blog, Head of Redress at The Property Redress Scheme, Sean Hooker, explores the impact of the General Election on the Renters (Reform) Bill. What are the consequences of a 4   July election on the landmark Bill that was so close to reaching its final hurdle? Read Sean’s blog to find out more about the ongoing saga of the Renters (Reform) Bill and his analysis of the   options that lie ahead.

 

The Renters (Reform) Bill saga gets curiouser and curiouser and may have disappeared down a rabbit hole entirely. “Events dear boy, events” as former PM Harold MacMillian famously never said, have intervened once again.

I had temporarily stopped writing my blog series before the new year as the whole process had ground to political halt and I did not want to be the boy who was crying wolf!

But suddenly it appeared the legislation was firmly back on the menu, only for the plate to be whipped away before a single bite was had!

It doesn’t rain but it pours!

Yes, a bedraggled Prime Minister, stood at the Downing Street lectern and as the rain sluiced down, announced the country was going to the polls in July!

With the General Election now called and this blog all but written, I have had to rapidly stop the presses and see if I could salvage it and meet my deadline as promised.

It is worth first of all taking a moment to see how we have got here, and where we were before the announcement that the PM had gone to the King.

I know where I was! Literally coming out of a meeting in the House of Lords, having attended the launch of the Renting Done Right report, a joint effort between the National Residential Landlord Association and Goodlord.

A stellar gathering of experts in the room, debating the next stages of the Bill but now no doubt all in shock that it may all be for nought.

It of course should not have come to this.
 

From the easy path to the difficult road.

The passage of a bill through Parliament has never been a straightforward process and while some laws can be passed remarkably quickly, most wend their way through both houses at a sedentary pace before finally entering the statute books.

The Renters (Reform) Bill has however had a torrid time getting through the process, even by these arcane standards. What is even more remarkable is that it was never meant to be this way.

The Government’s plans were that they would publish a White Paper outlining the intentions of the Bill and the mechanisms of how to deliver the reforms; then go out to consultation and iron out all the challenges before an oven ready bill was produced.

Well, we waited an inordinate amount of time for the publication of the White Paper. From a manifesto pledge in 2019 until June 2022 in fact. The round tables and discussions then started and finished and then we waited again. 2022 ticked into 2023 and still we waited and in May the Bill at last had its first reading in the Commons and was published.  
 

The second reading, which in most cases is a few weeks after a bill is first introduced, however did not materialise, so we waited again. Summer came and faded and still no second reading. The leaves fell and Christmas beckoned and as October was about to rollover to November, the Bill was read and debated and moved to the Committee Stage.

A frenetic month saw the Bill’s scrutiny gather pace and it did look like it could make rapid progress, but then as we entered a New Year 2024, the Bill, now heavy with amendments, still had no date for its third and final reading in the Commons and still had to negotiate the House of Lords.

In the meantime, there were all sorts of rumours and rumblings about when the General Election would be called and with local elections in May, this was one date that pundits were taking seriously as a possibility.

If this was the case, the Bill would have fallen and we would be back to square one.

Of course, this did not occur and instead, the Bill returned to the House of Commons Chamber at the end of April and was voted on and passed through.

It looked odds on to make it through

With everyone believing an election before the autumn was now almost impossible, the Bill appeared to have every chance now of being passed and to make sure this could happen, it was subject to a carryover motion, which would have still been able to be considered in the new parliamentary session after the summer.

The Bill, however, which had its first reading in the House of Lords on 1 May 2024 republished was a much different beast to what had been presented to “The other place” a year before.  Over 200 amendments had been tabled and while all the opposition’s changes had been voted down, significant government amendments had been accepted.
 

The oven ready Bill had therefore been through the air fryer and emerged quite different to what was originally on the menu.

The Bill has since had its second reading and whilst the peers stated they would not oppose the passage of the Bill, it was expected to be subject to another raft of amendments in the committee stage. This will not now happen, but wait for the possible twist at the end.

 

A smorgasbord that was promised but what ended up on the plate?

So, what does the Bill look like now? It has been a moving feast and while large parts of the original are still in place, significant amendments had been made to the current draft which was going to go the committee stage in the House of Lords.

Rather than go through these individually, my team has updated our individual guides to each section and what is currently looks like. You can access the guides here.

 

There is however one area that has attracted the most heated debates and this is the abolition of Section 21 and the related scrapping of fix term ASTs.

The landlord and letting agent community welcomed the amendments to the notice periods and the changes to the new grounds for possession, which will need to be given before a notice is valid. It also applauded the announcement on moratorium on the actual date Section 21 goes, until after significant improvements to the court system are made.

Tenant groups have called these changes a watering down of the Bill and have been very damning on how long the promise to get rid of no-fault evictions has taken.

The reality now is that regardless of whether the Bill was passed or not, there is no date for this major change to take place. But what is now certain, is it will now fall under the watch of a new government, regardless of its colour.

There was also a last-ditch attempt by the opponents of scrapping Section 21 to allow negotiated fixed term tenancies if both a landlord and their tenant wanted these.

This was originally proposed as an amendment in the House of Commons, but was rejected as a wrecking amendment so was disqualified and not debated. It would however have been allowed to be debated in the Lords, where the rules are different.

This will now not happen.

Legal loophole

It would however not have been successful, in my view, as the scrapping of Section 21creates a legal situation where a fixed term is meaningless, as a tenancy can only be legally ended by the landlord if they give a valid reason. There was originally no provision for one of these reasons to be the contractual term if the tenancy has expired.

Adding in this provision would create a legal loophole and the issue of whether an opt out was consensually agreed would cause endless disputes.

The Government, however, proposed amendments for student lets, to try and make sure that they can be ended once the student’s studies or the academic year finishes, but any further exceptions will create many legal paradoxes that would make the whole thing unworkable.
 

An uncertain future

Only time would have told whether the new tenancies would work and would take some explaining to all parties before they become comfortable with them.

At the moment there are fears on both sides, with landlords uncomfortable about perpetual tenancies and tenants wary of losing the certainty of a fixed term. Remember, it was only a few years back we were talking of mandatory three-year fixed tenancies.
 

It remains to be seen now the bill has fallen and we wait to see what the iteration a new government will take, what they will bring in, as the opposition is determined to get rid of Section 21 come what may. They are odds on favourites to win. Renters Reform 2 is coming mark my words! Finally, there must always be a health warning on the packet of my blogs. The changes are not yet law and do not apply yet. They are also still subject to change, so while we can prepare for some of the measures, there has to be a fair measure of contingency in the mix.
 

Now the bill has fallen, then the new government has the opportunity to reintroduce it and while the Bill goes back to square one in the process, hopefully all the hard work will have been done to get it onto the statute books. However, we have been here before!

 

Wash-up? No Wash-out. 

 

“There was one more possible twist that could have occurred that would have saved the bill. 

 

A Parliamentary process occurs when an election is called, by which pending legislation which has sufficiently progressed through both Houses, could be subject to what is known as Wash Up and passed on the nod after an acceptable version is agreed by the Government and opposition.

 

An intense behind closed doors process of horse trading has been taking place, but by the Friday when Parliament was prorogued, the Renters (Reform) Bill 2023 was no more! 

 

The Leasehold and Freehold Bill did make it through to the pre-prolongation process, albeit appearing on the House of Lords Order Paper denuded of the provisions for limiting ground rent, so washed up and watered down!