Charities | Legacies
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The government describes the Renters (Reform) Bill (the Bill) as the "biggest shake-up of the private rented sector in 30 years". Introduced to Parliament on 17 May 2023, the Bill intends to fulfil the 2019 Conservative manifesto commitment to abolish 'no fault' evictions in England.
The Bill seeks to find the balance between remedying the precarious lack of security that England's eleven million private renters face, whilst also celebrating the overwhelming majority of England's roughly two million responsible landlords by ensuring that they can quickly repossess their property where they have a legitimate reason for so doing.
The changes introduced have the potential to affect a broad range of stakeholders operating within the private rented sector. The charity sector is no exception, given its historic reliance on the flexibility afforded by section 21 evictions in both their capacity as landlords and beneficiaries of gifts in wills.
Previously, charities have made use of 'no fault' evictions to achieve vacant possession in three key areas:
The reforms the Bill seeks to introduce which are worthy of particular note for the charity sector are as follows:
Since their introduction in 1988, section 21 'no fault' evictions have allowed landlords to end a tenancy without establishing fault on the part of the tenant. This form of eviction is to be entirely abolished, with the result that landlords will only be able to evict a tenant in particular circumstances set out in the legislation.
Whilst this development may appear to swing the pendulum of control overly towards tenants, the Bill also ensures that landlords' other rights of possession are strengthened. New mandatory grounds for possession have been introduced which allow landlords to recover their properties when they need to and these will assist charities in the key scenarios referred to above.
The following list details the most significant reforms to the grounds of possession which are likely to be useful to charities. Landlords are entitled to regain possession in the following circumstances:
Where the landlord intends to sell the property, provided that repossession does not occur within the first six months of the tenancy. This is key in relation to properties left as gifts in wills as notice will still be able to be served on tenants so that the property can be sold vacant where desirable.
Where the property is held for use by a minister of religion to perform the duties of their office, and the property is required for occupation by a different minister of religion. Note that the landlord must have given notice to the tenant at the beginning of the tenancy that the ground might be relied upon.
Where the property is intended to be used as supported housing and:
Where the tenancy was granted under the Local Housing Authority’s duty under section 193 of the Housing Act 1996 to provide temporary accommodation to someone who is homeless, and the landlord has been informed that the tenancy is no longer required for that duty.
Where a qualifying landlord intends to demolish or reconstruct all or a substantial part of the property and those works cannot reasonably be carried out with the tenant in occupation.
At its first introduction to Parliament, Housing Secretary Michael Gove stated that he hoped to see the Bill in place "as quickly as possible". However, it is still in its infancy, currently undergoing its second reading in the House of Commons and so Royal Assent is unlikely to be received before Spring 2024.
The government has confirmed that at least six months' notice will be given ahead of the first implementation date, after which all new tenancies will be periodic and governed by the new rules. All existing tenancies will transition to the new system on the second implementation date, with the government further confirming that there will be at least twelve months between the first and second date. It is worth charities considering their tenancy arrangements now to decide if any changes should be made ahead of the bill being passed.