The Renters Rights Bill: Our Guide for Landlords & Tenants

The New Renters Rights Bill, here’s what you need to know in nutshell.

The new Renters’ Rights Bill aims to transform the rental market by banning Section 21 evictions, limiting rent increases, and improving living standards for tenants. With several other proposed measures for landlords and the introduction of various tenant-friendly policies, this bill could change the landscape for both renters and landlords alike.

Most of the key points covered are taken from the Government website; gov.uk

Overview of bill measures

The Renters Rights Bill will:

• Abolish section 21 evictions and move to a simpler tenancy structure where all assured tenancies are periodic – providing more security for tenants and empowering them to challenge poor practice and unfair rent increases without fear of eviction.
• Ensure possession grounds are fair to both parties, giving tenants more security, while ensuring landlords can recover their property when reasonable. The bill introduces new safeguards for tenants, giving them more time to find a home if landlords evict to move in or sell, and ensuring unscrupulous landlords cannot misuse grounds.
• Provide stronger protections against backdoor eviction by ensuring tenants can appeal excessive above-market rents which are purely designed to force them out. As now, landlords will still be able to increase rents to market price for their properties and an independent tribunal will make a judgement on this, if needed.
• Introduce a new Private Rented Sector Landlord Ombudsman that will provide quick, fair, impartial and binding resolution for tenants’ complaints about their landlord. This will bring tenant-landlord complaint resolution on par with established redress practices for tenants in social housing and consumers of property agent services
• Create a Private Rented Sector Database to help landlords understand their legal obligations and demonstrate compliance (giving good landlords confidence in their position), alongside providing better information to tenants to make informed decisions when entering into a tenancy agreement. Landlords will need to be registered on the database in order to use certain possession grounds.
• Give tenants strengthened rights to request a pet in the property, which the landlord must consider and cannot unreasonably refuse. To support this, landlords will be able to require pet insurance to cover any damage to their property.
• Apply the Decent Homes Standard to the private rented sector to give renters safer, better value homes and remove the blight of poor-quality homes in local communities.
• Apply ‘Awaab’s Law’ to the sector, setting clear legal expectations about the timeframes within which landlords in the private rented sector must take action to make homes safe where they contain serious hazards.
• Make it illegal for landlords and agents to discriminate against prospective tenants in receipt of benefits or with children – helping to ensure everyone is treated fairly when looking for a place to live.
• End the practice of rental bidding by prohibiting landlords and agents from asking for or accepting offers above the advertised rent. Landlords and agents will be required to publish an asking rent for their property and it will be illegal to accept offers made above this rate.
• Strengthen local authority enforcement by expanding civil penalties, introducing a package of investigatory powers and bringing in a new requirement for local authorities to report on enforcement activity.
• Strengthen rent repayment orders by extending them to superior landlords, doubling the maximum penalty and ensuring repeat offenders have to repay the maximum amount.

Tenancy reform

The Renters’ Rights Bill will introduce a transformative new tenancy system, ending ‘no explanation’ section 21 evictions. The new tenancy system will provide more information to tenants and will empower them to challenge bad practice without fear of retaliatory eviction. Landlords will also benefit, with more straightforward regulation, and clearer and expanded possession grounds.

Periodic tenancies

The Renters’ Rights Bill will remove fixed term assured tenancies.

All tenancies will now be periodic, where tenants will be able to stay in their home until they decide to end the tenancy, giving two months’ notice. The aim of this is to provide more flexibility to both landlords and tenants.

Grounds for possession (Section 8)

Landlords must, as in the current system, go to court if a tenant does not leave. They will need to provide evidence that the ground is met. For mandatory grounds, the court must award possession if the ground is proven. For discretionary grounds, the court can consider if eviction is reasonable, even when the ground is met.

Where a tenant is at fault, landlords can give notice using the relevant grounds at any point in the tenancy. This includes where a tenant commits antisocial behaviour, is damaging the property, or falls into significant arrears.

The new bill will increase the mandatory threshold for rental arrears from 2 months to 3 months, with a notice period of 4 weeks. This will allow tenants more time to repay arrears and remain in their homes, while ensuring landlords do not face unsustainable costs. Landlords can also continue to use the discretionary rent arrears grounds, for example if rent is repeatedly late.

Tenants will benefit from a 12-month protected period at the beginning of a tenancy, during which landlords cannot evict them to move in or sell the property. Landlords will need to provide 4 months’ notice when using these grounds, giving tenants more time to find a new home, and reducing the risk of homelessness.

The Bill will prevent landlords gaining possession if they have not properly protected a tenant’s deposit or registered their property on the private rented sector database. It will ensure landlords are always able to rectify non-compliance, so they are not prevented from regaining possession indefinitely. These restrictions will not apply to antisocial behaviour grounds.

Rent Increases

Tenants will be able to challenge what they consider an unreasonable rent increase. The main aim here is to prevent the so-called back door evictions, where landlords use rent increases as a form of eviction, whilst ensuring rents are increased at the current market rate. There is nothing new here really, as the First Tier Tribunal System has been in place for several years.

In future, all rent increases in the private rented sector will be made using the same process. Landlords will be able to increase rents once per year to the market rate – the price that would be achieved if the property was newly advertised to let. To do this, they will need to serve a simple ‘section 13’ notice, setting out the new rent and giving at least 2 months’ notice of it taking effect.

Implementation

To end section 21 evictions as quickly as possible, the government will introduce the new tenancy reform for the private rented sector system in one stage. On this date the new tenancy system will apply to all private tenancies – existing tenancies will convert to the new system, and any new tenancies signed on or after this date will also be governed by the new rules.

Existing fixed terms will be converted to periodic tenancies, and landlords will no longer be able to serve new section 21 or old-style section 8 notices to evict their tenants.

Renting with pets

Pets can bring a huge amount of joy to their owners. We are committed to supporting responsible pet ownership in the private rented sector. The Renters’ Rights Bill will ensure landlords do not unreasonably withhold consent when a tenant requests to have a pet in their home, with the tenant able to challenge unfair decisions.

We know that some landlords are concerned about potential damage caused by pets. That is why the Renters’ Rights Bill will allow landlords to require insurance covering pet damage. This will provide landlords with reassurance that any damage caused by a pet can be taken care of, and that the responsibility for preventing and resolving damage caused by a pet will fall to the tenant.

We will publish guidance for landlords and tenants before the new rules come into effect.

Above are the main points to digest from the new Renter Reform Bill. At the time of this post the bill hits the committee stage in the house of commons. There is still fair way to go until law, but we will keep you updated along the way.

Scargill Mann & Co’s Final thoughts

There is a lot of information to take in, but we feel there isn’t much to worry about for the large numbers of compliant landlords. There will be a few more administrative hoops to jump through, but these will be manageable and nothing we can’t help you with.

There is one big headline to consider from the bill which will affect all landlords.

Under the bills grounds for repossession a landlord can now only serve notice for the the following, to move back into the property, sell the property or move in a family member. In the last 12 months the vast majority of our Section 21 notices have been for the above reason. No landlord would consider evicting a tenant for no reason, that just doesn’t make sense.

A 12-month protected tenancy window however, and a 4-month notice period for the above reasons, in our opinion seem very unfair on the huge numbers of compliant and conscientious landlords. This topic we feel will be a big talking point as the bill progresses to law.

Maybe now is the time to consider Rent & Legal protection, to cover yourself against the additional costs of serving notice and any rental arrears. We have an excellent and affordable policy through our referencing partner Rightmove, which covers legal expenses and guarantees the rent up until vacant possession.

Although there is a lot to consider, don’t panic. We are here to help and guide you through the next 12 months.