An update on the Renters' Rights Bill

The Renters’ Rights Bill is progressing quickly through parliament. It had its third reading on 14^th January and passed in the House of Commons, with all Government amendments made at the Committee stage accepted.

It has now begun its journey through the House of Lords. Here’s a summary of the most significant changes proposed in the Bill:

All tenancies will become periodic

• Assured Shorthold Tenancies (AST) will be replaced by a new type of tenancy agreement.
• Minimum fixed terms – e.g 6 or 12 months – will no longer be permitted and landlords and agents can be fined if the tenancy agreement purports to grant a fixed term.
• Tenants will be able to give two months’ notice at any point from the start of their tenancy.
• It will be mandatory to issue tenants with a written statement of the terms of the tenancy (new prescribed clauses and other regulations are expected to be set out in due course).

Section 21 will disappear

• Landlords will no longer be able to give a tenant two months’ notice without having to state a reason.
• Tenants can only be evicted by the serving of a section 8 notice that states a valid legal ground.

Section 8 grounds will be reformed – and many notice periods will increase

Landlords will still be able to evict tenants who breach the terms of their rental agreement and regain possession if they have a legally valid reason.

However, because Labour is keen to avoid tenants becoming homeless, many grounds have been reformed and notice periods increased to give them more time to find new accommodation.

Some key things to note:

• If you want to sell or move into the property, the notice period will increase to 4 months and the tenant will be protected from eviction under these grounds for the first 12 months of their tenancy.
• If you want to sell, the property can’t be either marketed for let or rented out (including as a holiday let or on licence) for 16 months from the serving of the notice. So, if you evict your tenant and then either can’t sell or decide you no longer want to sell, the property will have to sit empty until the notice period and a further 12 months have elapsed.
• Rent arrears: currently, you can use this ground once a tenant is two months in arrears, giving them two weeks’ notice to leave. Under the Bill, they will have to be three months in arrears, and the notice period will double to four weeks.

Landlord registration and membership of an ombudsman will become mandatory

A new Private Rented Sector (PRS) Portal will be created, which will:

• Hold a register of landlords and their properties.
• Contain certain information about convictions and fines, ultimately replacing the current database of rogue landlords.
• Serve as an information resource for landlords to help them comply with existing rules and keep them updated on changes to the law.

A new ombudsman will also be established to provide a forum for tenant complaints and give tenants a route to redress.

Landlords will be legally obliged to register on the portal and join the ombudsman. There will be a fee for both, which the Government has said will be ‘reasonable and proportionate’.

‘Bidding wars’ for new tenancies will be banned

Landlords and agents will be banned from encouraging bidding wars between tenants and charging more than the advertised rent.

Discrimination rules will be strengthened

It will be illegal for landlords and agents to refuse to accept tenants simply because they have children or are in receipt of benefits.

Landlords won’t be able to refuse reasonable requests for tenants to keep a pet

• Tenants will have to make a written request if they want to keep a pet.
• Landlords will have 28 days to object and must state a good reason – e.g. the property isn’t suitable for the type of pet, or the head lease prohibits pets.
• The Tenant Fees Act will be amended so landlords can require tenants to pay for pet insurance.

Landlords won’t be able to ask for more than one month’s rent in advance

• Advance payments of more than one month’s rent will become a prohibited payment under the Tenants Fees Act.
• If a tenant wants to pay more up front, they can – but the landlord will no longer be able to request or require it.
• The normal one month’s rent in advance cannot be paid until after the tenancy agreement has been signed.
• Tenancy deposits and holding deposits will not be affected.

There will be new minimum property condition standards

• A Decent Homes Standard will be introduced, setting clear minimum health and safety requirements for privately rented properties.
• ‘Awaab’s Law’ will be applied to the PRS, requiring landlords to address and fix serious health hazards within a strict legal timeframe.

Civil penalties will be expanded and increased

• The maximum civil penalty – that’s a fine that can be issued by a local authority without having to take a landlord to court – will increase from £30,000 to £40,000.
• Councils will be able to issue a civil penalty for unlawful evictions – currently they have to go to to court.

More information about how penalties are changing can be found in our article, ‘Landlord fines: Changes under the Renters' Rights Bill’.

Rent Repayment Orders (RROs) will be strengthened

• It will be possible for RROs to be made against not only superior landlords, buy any landlord in the letting chain, regardless of who receives the tenants' rent.
• The maximum penalty will be doubled, from one to two years’ rent.

 

We don’t expect any more than further minor and technical changes before the Bill is passed, which is likely to happen before the spring.

Although Labour is keen to see some parts come into force immediately - including the removal of section 21 - most of what’s in the Bill will take time to finalise and enact.

 

If you have any questions or concerns, our Your Move experts are always here to help. Just get in touch with your nearest branch and have a chat with one of the team, or book a free lettings consultation.

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