Boodle Hatfield Property Insights, June 2023 - Flipbook - Page 2
Boodle Hatfield
Property Insights
uncertainty that the current regime of a fixed term
and no fault eviction can bring.
•
Further reforms will limit the ability to agree a
standard contractual provision to review the tenancy
rent. Reviews will be limited to annual reviews,
triggered by a formal notice process with the tenant
able to challenge any proposed increase via the First
Tier Tribunal with conventional rent review clauses
of the type we are used to in practice now being
deemed ‘vague’ and ‘unconnected to the market’.
The reforms outlined above will perhaps impact most on
the “occasional” landlord wanting to let a family home
whilst overseas, or other temporary relocation. For this
group of landlords, the current section 21 regime allows
the landlord that the certainty that it can terminate a
tenancy at the end of the fixed term with minimal fuss
or expense and return to their home or indeed choose
to sell the property should they wish. This issue will be
addressed in part by a new statutory ground allowing a
landlord to evict a tenant if it can prove it intends to sell
the property or allow a family member to move into the
property. However, such a change may prove too risky
for some landlords in this sector, who may opt to simply
leave a property vacant rather than run the risk of having
to take costly and potentially time consuming court
proceedings to regain possession of a family home that
has been let on a short-term basis.
Another important factor to consider is quite how
the court system will deal with the likely increase in
possession proceedings under the statutory grounds
once the section 21 notice procedure is no more.
Without considerable investment in the current court
system, this may mean that it will be slower and more
expensive for landlords to evict problem tenants such as
those with significant arrears or where there has been a
significant breach of the tenancy. This is addressed in
part by proposals for the creation of a new Ombudsman
scheme, tasked with providing cheaper and quicker
dispute resolution together with a new online portal.
Reform is still some way off. It is anticipated that the
earliest the proposals outlined in the new Bill could come
into force is early 2024, subject to first being passed
by Parliament. Quite how the changes will impact on
existing tenancies, in particular those with a fixed term
that will run beyond the likely implementation date in
2024, is currently unclear.
Whilst these reforms may make the private rental sector
less attractive to some landlords, who may see this
increased regulation as the final straw, there is in practice
little in the new Bill that should concern responsible
landlords, given that the focus is to take action against
those landlords that act unfairly. The nature of the
reforms do however give rise to a question as to quite
how and when the courts will find the resources and
capacity to deal with disputes where court action is
required.
Colin Young, Property Litigation Partner
Reform to 1954 Act
Whilst much of the recent focus has been on residential
leasehold reform, there are also proposals afoot to
reform commercial leaseholds in the form of a review of
the Landlord and Tenant Act 1954. The Law Commission
has announced plans to review how the current right to
renew business tenancies works in practice and will
consider options for reform, acknowledging that aspects
of the 1954 Act are burdensome, unclear and out of date
and may be the cause of unnecessary delay and costs to
landlords and tenants alike.
The review is form part of a larger exercise aimed at
revitalising high streets and town centres and improving
the environmental sustainability of commercial
properties. It is anticipated that the focus will be on
creating a leasehold framework that is used, rather than
widely contracted out of (as is the case with the present
framework), whilst still allowing landlords and tenants to
make their own agreements fostering a productive and
beneficial commercial relationship between the parties.
A consultation paper, providing more detail proposed
reforms is anticipated late 2023.
Kellie Jones, Property Litigation Partner
