The Renters Rights Bill – The Full Review

The Renters Rights Bill aims to provide greater security and stability for renters. Once introduced into law the Bill will be known as The Renters Rights Act.

Periodic Tenancies

The Bill will remove fixed term assured tenancies. Going forwards all tenancies will be periodic, meaning that tenants will be able to remain in a property until such time as they give the requisite 2 month notice to vacate. The aim of this change is to prevent tenants having to continue to stay and pay rent for substandard properties.

New Grounds for Possession  

One of the headline changes being bought in by this legislation is the abolition of Section 21 evictions. Known as non-fault evictions, giving landlords the right to seek possession of their property from tenants even where there has been no breach of the tenancy agreement by the tenant. Under Section 21 a landlord is required to serve a two month notice on the tenant.

The Bill will introduce new protections for tenants who temporarily fall into arrears. Under the current ground 8 eviction for arrears, a landlord may serve notice and issue proceedings where the tenant is in two months of arrears. The Renter Rights Bill is seeking to increase this to three months. Currently the notice period under section 8, ground 8 is two weeks, the new Bill will seek to increase this to four weeks.

Provisions are to be introduced to give landlords some protection where their circumstances change. The Bill includes strengthened provision for landlords to claim back their property where they seek to move into the property or sell it.

Tenants will have a 12 month protected period at the start of their tenancy, during this period landlords will not be able to rely upon the new grounds (of moving in or selling) to evict a tenant. Once the 12-month period has expired, landlords can serve notice under these new grounds, the notice period is four months.

The Bill will extend the provision which prevent landlords obtaining possession where they have failed to protect a deposit or registered the property on the database.

Rent Increases

A fixed process will be implemented for rent increases in the private sector. Landlords will be able to increase rent once per year to the market rent. To do this, a section 13 notice will need to be served, this notice will have to give the tenant at least two months’ notice of the rent increase.

Tenants will have the right to challenge the rent increase at the first-tier tribunal if they believe that it has exceeded the market rent. Reforms will be made to how the tribunal operates, the tribunal can no longer increase the rent, nor will the tribunal be able to back date the rent increase.  The tribunal will also have the power to defer rent increases by two months where there is exceptional hardship.

The reliance on rent review clauses will no longer be permitted.

Implementation

The new provision will come into force in one stage, on this date the new tenancy system will apply to all private tenancies. Existing tenancies will immediately convert to the new system and all new tenancies will be governed by the new rules.

Existing fixed term tenancies will be converted to periodic tenancies.

Court Proceedings

Under the new provision, after the service of a notice, if a tenant fails to vacate the property, court proceedings will need to be issued and thereafter a bailiff instructed.

At this stage the guidance has not been released on what evidence a landlord will need to show to prove the grounds of eviction, this is not so relevant for rent arrears, but for cases where a landlord is seeking to evict on the basis that they are selling or moving into the property, they will need to evidence this.

Furthermore, The Ministry of Housing, Communities and Local Government is working with the Judiciary, the Ministry of Justice and HM Courts and Tribunals Service to ensure that the county court is prepared for the changes to the tenancy system. At the moment, it would not be unusual for eviction under section 8 to take between 6-8 months due to court delays, therefore lots of work will need to be done to rectify this position.

There are plans to digitise the possession process to make it more efficient, but no real information has been released on this.

Private Rented Sector Ombudsman

A new ombudsman service will be introduced, all private landlords in England will be required to join, even where you use a managing agent.

The tenant will be able to use this service to complain about the landlords actions or behaviours and will offer a binding resolution service against both landlord and tenants. For instance, it will have powers to compel the landlord to take remedial action or pay compensation.

The ombudsmen service will also be given robust enforcement measures, with the assistance of the local authority they will have power to fine up to £40,000 and prosecute landlords criminally for continuing or repeated breaches.

This service is proposed to be introduced once the act has received Royal assent. It is likely that landlords will be required to pay an annual fee for the service.

This database is set to replace the functionality of the current rouge landlords database.

Private Rented Sector Database

The Bill will introduce a database, all landlords will be legally required to register themselves and their properties on the database and will be subject to penalties if they fail to do so.

The database proposes to be a one stop shop where landlords can obtain guidance to help them understand their obligations and demonstrate compliance. Landlords will be required to pay to register on the database.

Prohibiting Rental Discrimination

Landlords will be prevented from discriminating against tenants with children or those who receive benefits. Landlords will retain the right to have the final say over who they rent their property to, but it would be unlawful to discriminate against someone on these grounds.

Some mortgages and insurance contracts prevent the letting of properties to those with children and/or those on benefits. The Bill provides that a landlord cannot be compelled to discriminate by their mortgage contract. Currently existing insurance contracts which begin before the legislation comes into force will be exempt from this provision.

Rental Bidding

The practice of rental bidding will be bought to an end under this Bill. The Bill will require landlords and letting agents to publish an asking price for the property. It will also prohibit them from asking for any bids above this price.

Renting with Pets

The Bill will prevent landlords from unreasonably withholding consent when a tenant requests to have a pet in their home and allows tenants to challenge unfair decisions. This will be one of the areas of dispute that the new ombudsman service will address. There is also provision for landlords to obtain insurance for pet damage and the ability to recover the costs of this insurance from the tenant.

Decent Homes Standard

This is a new standard which is being introduced, the Bill will allow regulations to be made setting out a DHS requirement for rental properties and provide the local authority with effective enforcement powers.

Awaab’s Law

This Law was introduced for social housing through the Social Housing (Regulation) Act 2023 and the Bill will extend it to the private rental sector. This will ensure that all renters in England are empowered to challenge dangerous conditions and that all landlords must take swift action to make sure homes are safe.

Landlords will be required to address hazards such as mould within a certain time period, if they fail to do so, tenants will be able to bring action through the courts.

Enforcement & Investigatory Powers

Councils will be provided with a range of new powers which will allow them to enforce the new reforms and investigate breaches. Civil penalties and rent repayment orders are being extended. First or minor non-compliance will incur a civil penalty of up to £7,000 and serious or repeat non-compliance a civil penalty of up to £40,000.

Tenants will also continue to be able to seek rent repayment orders, and the Bill will introduce measure to increase the effect of RROs. Making them easier to pursue and giving wider coverage. One of the amendments being that the maximum amount of rent a landlord could be ordered to repay will increase from 12 to 24 months rent. There will also be an extension of the period in which tenants can apply for RROs to 24 months.

What’s Next

Tenant support groups are seeking further amendments to the Bill – they would like a limit in rent increases and a cap on rent in advance. They are also seeking provisions to prevent landlords seeking guarantors.

This new Bill carries a lot of urgency with it and formed part of Labour’s election manifesto, the government seems keen to push this legalisation through and deliver on the reforms they promised.

The next reading of the Bill is due on the 9^th October. Thereafter it will progress through Parliament. Parliamentary time allowing, there is a chance it could be an act before the end of the year and given Royal assent by around April – June 2025.