The Renter’s Rights Bill. All You Need To Know

 

As you may have read in the press this new piece of legislation is passing through parliament and, if passed as proposed, will bring about significant change in the Private Rented Sector.

At Quealy & Co, we are fully aware of what is being proposed, and generally, our view is that landlords who care for their properties and the conditions in which their tenants live should have nothing to worry about. It is becoming increasingly important to operate in line with new rule and the cost of falling foul can be significant. We will be able to guide you through everything that is changing and how to approach new challenges as they arise.

We urge any client to call us and discuss what is being proposed so we can offer guidance.

The Renters’ Rights Bill was introduced in the House of Commons in September and the government has provided the following briefing which provides background to the bill and an overview of its main provisions:

‘The bill implements commitments in the 2024 Labour Party manifesto to reform the regulation of the private rented sector and is intended to “give greater rights and protections to people renting their homes, including by abolishing section 21 ‘no fault’ evictions and reforming grounds for possession”. Most of the bill’s provisions apply only to England.

The bill builds on the Renters (Reform) Bill which was introduced in the House of Commons by the Conservative government on 17 May 2023. The bill did not complete all its parliamentary stages before the dissolution of Parliament in May 2024.

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What would the bill do?

The Renters’ Rights Bill would:

Reform tenancies

• abolish assured shorthold tenancies and with them, section 21 ‘no fault’ evictions. Instead, private rented sector tenancies would be periodic assured tenancies with no end date – providing more security for tenants. Tenants would need to provide two months’ notice to end the tenancy.
• reform and expand the grounds for possession to enable landlords to reclaim their properties when necessary, whilst ensuring appropriate safeguards for tenants.

Strengthen tenants’ rights

• limit rent increases to no more than once per year, requiring landlords to serve a statutory (section 13) rent increase notice and give at least two months’ notice. Tenants would be able to challenge above-market rent increases through the First-tier Tribunal (Property Chamber).
• prohibit the practice of ‘rental bidding’. Landlords and letting agents would be required to publish an asking rent for their property. They would then be prohibited from inviting, encouraging or accepting offers of rent above the asking price.
• give tenants the right to request a pet, which landlords must consider and cannot unreasonably refuse. Landlords would be able to require insurance to cover potential damage from pets.
• make it illegal for landlords to discriminate against tenants who receive benefits or who have children when letting their property.

Create a landlord redress scheme

• introduce a new ombudsman service for the private rented sector, which all private landlords would be required to join. The service would provide fair, impartial and binding resolution for tenants’ complaints about their landlord. It would have powers to compel landlords to issue an apology, provide information, take remedial action, and/or pay compensation.

Create a private rented sector database

• create a new private rented sector database to bring together key information for landlords, tenants and local authorities. This would enable: 1) tenants to access key information to inform their choices when entering new tenancies and throughout their tenancy; 2) landlords to understand their legal obligations and demonstrate compliance; and 3) councils to target enforcement activity where it is most needed.

Create a legal standard for property conditions

• introduce a decent homes standard to the private rented sector and provide local authorities with the power to enforce it. The bill would also apply Awaab’s Law to the sector, which would set timescales within which landlords must make homes safe when they contain serious hazards and empower tenants to challenge unsafe conditions. The details will be set out in secondary legislation.

Expand enforcement powers

• expand rent repayment orders, including by: 1) extending them to new offences; 2) doubling the maximum penalty; and 3) ensuring repeat offenders have to pay the maximum penalty. Rent repayment orders allow a tenant or local authority to apply to the First-tier Tribunal (Property Chamber) for an order that a landlord or their agent has committed an offence and should repay rent of up to a maximum of 12 months.
• strengthen local authorities’ enforcement powers, expand financial penalties and introduce a new requirement for authorities to report on enforcement activity. The bill would also give the Secretary of State the power to appoint a lead enforcement authority, whose role would include providing guidance and information to local authorities to ensure consistent enforcement.

The Ministry of Housing, Communities and Local Government has published a guide to the Renters’ Rights Bill. See below. To date, the bill’s impact assessment has not been published.

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Why is the government legislating?

The bill is intended to address a range of issues in the private rented sector, including those associated with assured shorthold tenancies.

Assured shorthold tenancies were introduced by the Housing Act 1988 and became the default tenancy in the private rented sector in England from 28 February 1997.

The sector has grown significantly since then; 4.6 million households rented their home from a private landlord in 2022/23, representing 19% of all households in England. A diverse range of households, including families with children, live in the sector.

Assured shorthold tenancies offer no long-term security of tenure. Section 21 of the 1988 act enables private landlords to repossess their properties without having to establish fault on the part of the tenant. It is referred to as the ‘no-fault’ ground for eviction.

Housing insecurity can have a range of negative impacts on people’s physical and mental health, finances, employment prospects, and ability to form support networks in their local community.

Lack of security also means tenants can feel unable to enforce their rights in relation to repairs and to challenge unreasonable rent increases. The private rented sector has a higher proportion of properties that do not meet standards than other housing tenures.

Additionally, private landlords in England are not required to belong to a redress scheme. Tenants are often left to negotiate with their landlords and enforce their rights through the courts. The court system can be costly and time consuming for both tenants and landlords.

Landlords have also reported problems with the current system of private renting. For example, they have had problems recovering properties when faced with anti-social behaviour or rent arrears. They use section 21 to avoid lengthy processes and the uncertainty associated with evicting tenants through a section 8 notice (which is used when a tenant has breached the terms of a tenancy). Landlords also report difficulties in accessing information and support to navigate the laws and regulations in the sector.

Although local authorities have extensive powers to address poor property conditions and management standards in the private rented sector, there’s evidence of low and inconsistent levels of enforcement between authorities. A lack of robust data and information on the sector is recognised as a key barrier to effective enforcement action.

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When would the bill come into force?

Following Royal Assent, most of the act’s provisions would come into force on a date(s) to be specified by the Secretary of State in regulations.

The government “wants to see tenants benefit from these reforms as quickly as possible”. It therefore intends to introduce the new tenancy system for the private rented sector in one stage. Upon the commencement date, the new tenancy system would apply to all private tenancies – existing assured tenancies would become periodic, and any new tenancies would be governed by the new rules.

The BBC has reported that the government hopes to have the new tenancy system in place by summer 2025. The government says it “will work closely with all parts of the sector to ensure a smooth transition to the new system, and will provide sufficient notice ahead of implementation”.

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Reaction to the bill

The bill, in particular the abolition of section 21 ‘no fault’ evictions, has been broadly welcomed by organisations representing tenants, the housing sector and local government.

Responding to the introduction of the bill, the chief executive of the housing charity Shelter, Polly Neate, referred to it as “a watershed moment”. Generation Rent, a campaigning organisation that represents renters, said the bill was “an important step forward for our rights which should be celebrated”. Chief executive of the homelessness charity Crisis, Matt Downie, said it would “provide tenants with long-overdue security and protection against homelessness”.

Tenant organisations have urged the government to pass the bill as soon as possible to prevent landlords from rushing to evict tenants before the new legislation is in force. They have also called for stronger protections for tenants, in particular to prevent unaffordable rent increases. The Renters Reform Coalition (RRC) of charities and campaign groups wants in-tenancy rent increases to be limited to the lower of inflation or wage growth. It also considers all grounds for possession should be discretionary, so that courts can take a range of factors into account when considering a possession claim.

Landlord bodies initially opposed the abolition of section 21. Both the National Residential Landlords Association (NRLA) and the Large Agents Representation Group have emphasised the tenancy reforms represent “the biggest change to the sector for over 30 years” and the sector must be given sufficient time to prepare for the changes. Landlords have also called for court reforms to improve the speed and efficiency with which possession claims are processed.

The provisions to establish an ombudsman service for the private rented sector and to require all private landlords to join have been broadly welcomed by all stakeholders, as has the establishment of a private rented sector database.

Enforcement measures are viewed as important by all stakeholders. London Councils and others are calling for adequate funding so local authorities can carry out effective enforcement.

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Do you need further advice about evolving legislation?

Quealy & Co are your rental property management experts for North Kent. We urge any client to call us and discuss what is being proposed so we can offer guidance.

Call us 01795 429836 or email hello@quealy.co.uk to chat with a member of our friendly and experienced team about anything to do with your rental property.