Renters’ Rights Bill – What You Need to Know

The Renters’ Rights Bill, introduced on September 11, 2024, and progressing through Parliament, aims to reform the private rented sector in England. It intends to create a fairer and more secure environment for tenants while also establishing clear guidelines for landlords.

Here’s a breakdown of the key aspects and what they mean for landlords:

Key Provisions and Implications for Landlords:

1. Abolition of Section 21 “No-Fault” Evictions:

What it means: Landlords will no longer be able to evict tenants without a specific, justifiable reason once the bill is fully enacted. Currently, Section 21 allows landlords to regain possession of their property at the end of a fixed-term tenancy or during a periodic tenancy without needing to prove fault on the part of the tenant.  

Impact on Landlords: Landlords will need to rely solely on Section 8 of the Housing Act 1988, which outlines specific grounds for possession. These grounds include rent arrears, damage to the property, anti-social behaviour, and the landlord’s intention to sell or move back into the property. The government is expanding and clarifying these Section 8 grounds.

2. Assured Periodic Tenancies:

What it means: All new tenancies will automatically become periodic (rolling on a month-by-month basis) from their inception, removing the concept of fixed-term Assured Shorthold Tenancies (ASTs). Existing fixed-term tenancies will convert to periodic tenancies once the legislation comes into full force.

Impact on Landlords: Landlords will need to adapt to a more fluid tenancy environment. While this provides tenants with greater flexibility, it may require landlords to adjust their financial planning due to potentially more frequent tenant turnover. However, it could also lead to more stable, long-term tenants if managed well.

3. New and Amended Grounds for Possession (Section 8):

What it means: The Bill introduces new mandatory and discretionary grounds for possession and amends existing ones to account for the abolition of Section 21. Examples include:

Mandatory Ground for Sale or Landlord Moving In (Ground 1A & Amended Ground 1): Landlords can seek possession if they genuinely intend to sell the property or if they or a close family member wish to occupy it. However, these grounds cannot be used within the first 12 months of a tenancy, and a minimum of four months’ notice must be given. Landlords may also face restrictions on re-letting the property shortly after regaining possession on these grounds.

Increased Rent Arrears Threshold (Amended Ground 8): The mandatory threshold for eviction based on rent arrears is proposed to increase from two to three months’ worth of unpaid rent. The notice period for this ground will also increase from two to four weeks. Discretionary grounds for repeated late payment of rent will remain.

Impact on Landlords: While losing the “no-fault” eviction route, landlords gain clearer and potentially more robust grounds for regaining possession in legitimate circumstances. The extended notice periods will require careful management of these processes.

4. Limitations on Rent Increases:

What it means: Landlords will be limited to increasing rent only once per year, and they must follow a formal process, typically using a Section 13 notice, providing at least two months’ notice. Rent increases must be in line with the current market rate, and tenants will have the right to challenge increases they deem excessive through the First-tier Tribunal. Rental bidding wars, where landlords and agents accept offers above the advertised rent, will be illegal.

Impact on Landlords: Landlords will need to plan rent reviews more strategically, considering the annual limitation. They must be prepared to justify proposed increases with evidence of local market rents and may need to engage with the tribunal if increases are challenged.

5. Right to Request Pets:

What it means: Tenants will have the right to request to keep a pet in the property, and landlords must consider this request and cannot unreasonably refuse it. Landlords may be able to require tenants to take out pet insurance to cover potential damage.

Impact on Landlords: Landlords will need to adopt a more flexible approach to pets in their properties and have valid reasons for refusal. They may need to update their tenancy agreements to reflect this change and consider the implications for property maintenance and potential damage.

6. Private Rented Sector Ombudsman:

What it means: A new mandatory Ombudsman scheme will be established to resolve disputes between landlords and tenants more quickly and cost-effectively than court proceedings. The Ombudsman will have the power to instruct landlords to issue apologies, take remedial action, and pay compensation.

Impact on Landlords: All landlords will be required to register with an approved Ombudsman scheme and familiarise themselves with its processes. They will need to develop internal complaint-handling procedures and be prepared to engage with the Ombudsman if disputes arise.

7. Private Rented Sector Database:

What it means: A new database of private landlords and rental properties will be created. Landlords will be required to register their properties and provide specific information. This aims to improve transparency, help tenants make informed decisions, and enable better enforcement by local authorities.

Impact on Landlords: Landlords will need to register themselves and their properties on this database and keep the information up to date. Failure to register may prevent them from being able to serve a valid Section 8 notice.

8. Decent Homes Standard:

What it means: The Decent Homes Standard, previously applicable mainly to social housing, will be extended to the private rented sector. This means all rental properties must meet minimum standards of repair, safety, and essential facilities. This will also incorporate “Awaab’s Law,” requiring landlords to address health hazards like damp and mould within strict timeframes.

Impact on Landlords: Landlords will need to ensure their properties meet these standards and carry out necessary repairs and maintenance. Failure to do so could result in penalties and Rent Repayment Orders.

9. Prohibition of Discrimination:

What it means: It will be illegal for landlords and agents to discriminate against prospective tenants based on their receipt of benefits or having children.

Impact on Landlords: Landlords will need to ensure their tenant selection processes are fair and do not directly or indirectly discriminate against these groups.

10. Restrictions on Rent in Advance:

What it means: Landlords will be limited to asking for and accepting no more than one month’s rent in advance before the start of a tenancy.

Impact on Landlords: Landlords will need to adjust their financial expectations at the start of a tenancy.

Overall Impact on Landlords:

The Renters’ Rights Bill represents a significant shift in the private rented sector, aiming to provide greater security and rights for tenants. For landlords, this means:

• More regulated processes: Landlords will need to adhere to stricter procedures regarding evictions, rent increases, and property standards.
• Increased responsibilities: There will be a greater emphasis on maintaining property standards, handling tenant requests fairly (e.g., pets), and engaging with the new Ombudsman service.
• Potential for longer tenancies: The move towards periodic tenancies, if managed effectively, could lead to more stable and longer-term relationships with tenants.
• Need for adaptation: Landlords will need to update their tenancy agreements, internal processes, and understanding of the legal framework to comply with the new legislation.
• Focus on professionalism: The Bill aims to raise standards across the sector, which may benefit responsible landlords in the long run by creating a more level playing field and improving the reputation of the industry.

It’s important for landlords to stay informed about the progress of the Bill through Parliament and to seek professional advice to understand how these changes will specifically affect their circumstances and how to ensure compliance. The Bill is currently in the House of Lords, and further amendments may occur before it becomes law. The implementation timeline for different aspects of the Bill may also vary.

Navigating the upcoming Renters’ Rights Bill and its implications for your property can feel overwhelming. Simplify the process and stay ahead of evolving tenancy laws and compliance requirements with Rentr. We continuously monitor legislative updates, ensuring you remain compliant and your property management is seamless. Download Rentr today and let us handle the complexities, so you can manage your property with confidence.