The Renters’ Rights Bill (“Bill”) was introduced to Parliament yesterday. According to the Labour Government’s manifesto, the Bill is designed to transform the experience of private renting and includes, as anticipated, the removal of Section 21 ‘no fault’ evictions.
This Bill represents Labour’s answer to the Conservative’s Renters (Reform) Bill, which failed to pass through Parliament before the recent general election. However, certain elements have been retained, such as the Decent Homes Standard and the right for a tenant to request permission for a pet in a rental property.
If the Bill becomes law, then the proposed changes to the private rental sector will have a significant impact on both landlords and tenants.
How will it impact landlords and tenants?
1. Security of tenure:
All fixed-term assured tenancies will become periodic, providing tenants with greater security and enabling them to challenge poor practice and unfair rent increases without fear of retaliatory eviction.
2. Abolishment of Section 21 evictions:
Effective as soon as the Bill becomes law and will apply to all private tenancies. Section 21 ‘no fault’ notices served before the Bill becomes law will continue to be valid until they expire.
3. Change to possession grounds:
Further protective measures for tenants (for example, increasing the mandatory threshold for eviction from 2 to 3 months’ arrears and the notice period from 2 to 4 weeks). Strengthened rights for landlords to reclaim properties when necessary (e.g. to move back in or sell). Tenants will benefit from a 12-month protected period at the commencement of a tenancy, during which landlords will be unable to evict them to move in or sell the property. Landlords seeking to rely on this ground will need to provide 4 months’ notice.
4. Right to challenge above-market rents:
The Bill will allow tenants to appeal above-market rents. Landlords remain entitled to increase rents to the market price and an independent Tribunal will determine this, if necessary.
5. Private rented sector Landlord Ombudsman Service:
All private landlords in England with assured or regulated tenancies will be obliged to join. Tenants will be able to use this service to complaint about landlords’ conduct and action. The service will provide binding resolutions and may also compel landlords to take certain steps (e.g. remedial action, payment of compensation).
6. Private rented sector database:
All landlords of assured and regulated tenancies will be obligated to register themselves and their properties on the database. Landlords could be subject to penalties if properties are let without having been registered. Further, the database will allow landlords to access relevant guidance, helping them to understand their obligations and demonstrate compliance.
7. Pets:
Tenants will have strengthened rights to request a pet in the property. Landlords will have to carefully consider the request and will be prevented from unreasonably refusing consent. Landlords will be able to require adequate pet insurance in place to cover the risk of damage.
8. Introduction of a Decent Homes Standard:
The Bill will allow for regulations to be made setting out Decent Homes Standard requirements for private rented sector homes alongside providing local authorities with appropriate enforcement powers.
9. Awaab’s Law:
Extended to the private rental sector, which will allow tenants to challenge dangerous conditions. Landlords will have to take swift remedial action, failing which tenants will be able to commence enforcement action through the courts.
10. Discrimination:
Landlords will retain the right to choose a tenant on the basis of affordability, but not on the basis a prospective tenant is in receipt of benefits or has children.
11. Rental Bidding:
Landlords and agents will have to advertise the rent being sought and will be prevented from asking for, encouraging or accepting rent above the published price.
12. Local authority enforcement:
Expansion of civil penalties, wider investigative powers and a requirement to report on enforcement activity.
13. Rent repayment orders:
Rent repayment orders will be extended to superior landlords. Further, the maximum penalty will be increased to 2 years’ rent and repeat offenders will be required to repay the maximum amount of rent.
Conclusion
The Bill introduces a raft of measures that are designed to transform the private rental sector. If passed in its current form, the impact on both landlords and tenants will be significant. Whilst tenants will immediately benefit from greater security, it will have far-reaching implications for landlords. We will closely follow its progress through Parliament and shall provide further updates on the proposed legislation in due course.
To discuss any of the points raised in this article, or if you require advice on any property-related issues, then please contact Daniel Blake (dblake@quastels.com), a Property Litigation Partner in our Dispute Resolution team, or fill out the form below.
