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Renters’ Rights Bill: how concerned should we be?

Renters' Rights

Renters’ Rights Bill: how concerned should we be? 

The bill has its second reading today – here’s an initial reaction to the Renters’ Rights Bill, thoughts that could change as it progresses through parliament.

Tom Entwistle reviews the initial bill here.

There’s been much media coverage over the past few months and years in anticipation of the coming changes to the residential letting rules being introduced by the now housing minister, Matthew Pennycook. First, through the period of the Conservative government and its Renters (Reform) Bill, which never became law, then under the new Labour government with its Renters Rights Bill, published September 11, 2024. That’s the one we are concerned with here. 

Given the speed with which the new government wishes to implement reforms to the private rented sector (PRS), much of the material set out in the previous Conservatives’ bill has been used as a basis for the new government’s bill, with several crucial additions.

Given the new government’s commanding majority it is anticipated the bill will go through Parliament and become law by early next year (spring/summer 2025) largely unchanged from the initial draft, though there will inevitably be some changes, which we will follow here as they occur. 

It must be said that some of these reforms will cause landlords concern, and there’s no getting away from the fact, these rules largely favour tenants. However, with proper planning and diligent tenancy management there’s responsible landlords and their agents should cope satisfactorily. Most tenants – perhaps 95 per cent or more of them – are trouble free and they come and go without any issues. 

The point of this article is to identify the key issues and allay some of the fears.

A major change is the abolition of the Section 21 “no-explanation” eviction process. We must now rely solely on Section 8 for evictions. That’s for rent arrears, breaching other tenancy terms or exhibiting anti-social behaviour.

As I’ve said, by far most residential tenancies are problem free. The tenant pays rent on time, looks after the property and leaves by giving notice. But there are a minority of tenancies that, for one reason or another, go wrong and landlords have no choice but to seek possession. 

The grounds for possession are a safeguard for the many issues that can go wrong and are there to assist landlords in achieving a successful eviction of a problem tenant.

In all these cases the key to a successful eviction is having sufficient documentary evidence to prove your case in court. In fact, the Labour housing minister has said that without a solid case, backed by good evidence, landlords won’t even get a court hearing. This will be ever more important under the new rules. This article is designed to help with that.

One major concern for landlords has been the backlog of court cases causing delays in getting access to justice. The new government has said this won’t be a problem, but many in the profession disagree. The courts are critically in need of reform and more resources.

Note: This is a guide, not advice and applies primarily to England. The published bill is a first draft and subject to change as it progresses through parliament. Seek professional advice before making decisions or not.

What are the main measures in the Renters’ Rights Bill?

Overview of the bill’s measures

The Renters’ Rights Bill will introduce:

  1. The abolition of Section 21 evictions including the assured shorthold tenancy (AST). Thus, by leaving only assured tenancies but of a simpler structure - all assured tenancies are to be monthly periodic (month by month). Court hearings will be universally required for an eviction.  The fixed term tenancy goes, giving tenants more security. That’s because effectively the tenancy does not end unless either: (1) the tenant gives 2 months’ notice to leave (they can do this from day one), (2) the landlord wants to sell or occupy the property, either themselves or their relatives, or (3) there is a breach of the terms of the tenancy giving rise to an eviction.
      
  2. Introduction. The new scheme will be introduced “in one stage” meaning all existing tenancies will be overridden. They will transform into the new periodic type of assured tenancy at the date the new bill becomes law. This will be “giving all tenants security immediately”. Landlords and agents will need to concern themselves with updating tenancy agreements as appropriate at the time.

  3. The grounds for possession will be extended from 17 under the AST to 36 (11 discretionary and 25 mandatory) under the Renters’ Rights Bill. Many of these grounds don’t apply to private landlords – see a summary below. According to the government’s guidance this will “ensure possession grounds are fair to both parties”. It willgive tenants more security, while ensuring landlords can recover their property when reasonable.” Tenants will have “more time to find a home if landlords evict to move in or sell” and will ensure “unscrupulous landlords cannot misuse grounds.”

  4. Market rents. Landlords will still be able to increase rents to market levels every 12 months and must use the formal Section 13 procedure. However, above market rent bargaining will be banned and tenants will be able to appeal to the First-tier Tribunal (FFT) if they think increases are above market levels. This will “provide stronger protections against backdoor eviction by ensuring tenants are able to appeal excessive above-market rents which are purely designed to force them out.”

  5. Private Rented Sector Landlord Ombudsman. The new ombudsman scheme will provide “quick, fair, impartial and binding resolution for tenants’ complaints” about landlords. This scheme is intended to mirror the free tenant-landlord complaint resolution service “with established redress practices for tenants in social housing and consumers of property agent services.”

  6. Private Rented Sector Database. A new landlord database will support local councils, helping them target enforcement activity where it is needed most. All landlords will be required to register on the database (paying a small fee) before they are able to use certain possession grounds. This will also be used to help landlords understand their legal obligations better, as well as providing information to tenants to make informed decisions when entering into a new tenancy agreement.
  1. Tenants’ rights to request a pet in the property will be strengthened. Tenants will be given the right to request a suitable pet, the request not to be unreasonably refused. As a safeguard, landlords will be given the right to insist on pet insurance to cover any damage caused to their property.
  1. The Decent Homes Standard. For the first time the Decent Homes Standard is to be applied in the private rented sector. Previously only applicable in the Social Housing Sector, this is to give tenants “safer, better value homes and remove the blight of poor-quality homes in local communities.”
  1. ‘Awaab’s Law’. The bill extends Awaab’s Law from the social sector to the PRS aims to set clear legal expectations about timeframes within which landlords must take action to make homes safe where they contain serious hazards, such as damp and condensation. This law was introduced to the social housing sector in July 2023 as part of the Social Housing (Regulation) Act.
  1. Discrimination. The new bill will make it illegal for landlords and agents to discriminate against prospective tenants who are in receipt of benefits or those with children. Landlords will still be able to discriminate on affordability grounds or the suitability of say a family for the accommodation space.
  1. Ending rental bidding. The practice of agents and landlords bidding up the price of rents when accommodation is scarce will be prohibited under the new bill. Landlords and agents will be forced to state their (market level) rent in their advertisements and accept no offers above the advertised rent, with tenant appeals available to the FTT.
  1. Strengthening penalties. Local authorities will be given increased enforcement powers by expanding civil penalties. A package of “investigatory powers” will be introduced bringing in a new requirement for local authorities to report on their own enforcement activity.
  1. PRS Ombudsman. A new Private Rented Sector Landlord Ombudsman Service is to be introduced which all private landlords in England with assured or regulated tenancies will be required by law to join. This includes those who use a managing agent. The service will be free for tenants to use to complain about a landlords’ actions or behaviours, failure to carry out repairs etc. This service will offer “fair, impartial and binding resolution for tenants”, and will have powers to “compel landlords to issue an apology, provide information, take remedial action, and/or pay compensation.” Local councils will be able to act against landlords who fail to join, or against anyone who markets a PRS property where the landlord is not registered. This will include civil penalties of up to £7,000 for initial breaches and up to £40,000 or criminal prosecution for continuing or repeated breaches. Tenants will be able to seek rent repayment orders against their landlord if the landlord commits an offence by persistently failing to join the ombudsman service
  1. Rent Repayment Orders are to be extended to superior landlords, doubling the maximum penalty and ensuring repeat offenders must repay the maximum amount. This is usually where a landlord (property owner) – the superior landlord – rents out an HMO property to a property manager (tenant) who then sublets without complying with the HMO licencing regulations

Issues for landlords stemming from the changes

Abolition of Section 21. This is perhaps the biggest change. It means landlords can only end tenancies in specific circumstances using the new grounds for possession under Section 8 of the Housing Act 1988. 

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 (previously 2 months) when using these grounds, giving tenants time to find a new home. When in rent arrears tenants will enjoy increased protection as the mandatory threshold for eviction is increased to 3 months’ arrears from 2 months under the present AST.

To regain possession, landlords will need to serve notice in the prescribed form, giving at least the required notice period to the tenant. Under Section 8, if a tenant does not leave, the landlord will need to go to court and convince a judge to issue a possession order by providing sufficient evidence that the chosen ground or grounds apply.

Factual evidence is vital, anecdotal evidence is useless. For example, in the case of rent arrears or persistent late paying the landlord might provide a schedule of payments and missed payments over a period, bank statements showing when payments are made and when they have missed, copies of correspondence or diary entries following phone contacts, emails and letters reminding the tenant when payments are due and when they were missed, etc.

Sale or re-occupation. Landlords will be required to show evidence that relying on these grounds is genuine, for example by providing evidence that an estate agent is engaged. There could also be penalties if the sale is not followed through. In both cases eviction is not possible during the first 12 months of the tenancy and thereafter there is a 4 months’ notice period, to allow the tenant time to relocate.

The grounds for possession. There will be 25 mandatory grounds where a judge cannot refuse a possession order when the ground is proven, and 11 discretionary grounds where the judge can decide whether to issue an order. If landlords feel confident presenting their case in court, they can appear in person (litigant in person) or they can use the services of an eviction specialist. See Schedule 1 of the bill in conjunction with Schedule 2 of the Housing Act 1988 for a full list of the grounds for possession, with the new notice periods etc.

Unlike previously with Section 21, Section 8 allows claimants to attach a money order to cover rent arrears. This means that the evicted tenant could also be given a county court judgement (CCJ) for any arrears claimed. 

Market rents. Section 13 of the 1988 Act (increases of rent) is to be amended in accordance with the new rules. The bill says the government does not intend to impose rent controls, and nothing in the bill restricts landlords raising rents in line with market prices. With the new system, all private rented sector increases will be made via the statutory ‘section 13’ process, as amended. This requires a landlord to complete a simple form, which will be published on GOV.UK, and serve this on the tenant.

If the tenant accepts the proposed rent increase, they simply need to pay the new amount on the next rent day. A tenant can dispute the increase by applying to the First-tier Tribunal, if they think it is above market level. This must be before the starting date of the proposed new rent and tenants should notify their landlord that they are doing so. The bill makes changes to the Tribunal system to support tenants in challenging unreasonable rent increases.

Student Tenancies. A new ground for possession for student lets includes a provision that the property must be an HMO and let solely to full-time students. The notice period is four months – 1 June to 30 September.

Awaab’s Law. The bill extends Awaab’s Law and makes clear legal expectations about time frames within which landlords must take action to make homes safe where they contain serious hazards, such as damp and condensation. As far as landlords and agents are concerned the emphasis should be on making sure that the property is free from serious defects, carrying out regular inspections and risk assessments.

Tenants’ rights to request a pet are to be strengthened. When considering the request to accept a pet in the property, landlords and agents should be mindful of the suitability of the pet for the property type, including the rights of neighbours, whether the pet comes with references, say from a vet to confirm injections / behaviour etc, and whether insurance cover is available. Landlords still have a right to refuse if the pet does not pass these basic tests.

Tenant checks. Rigorous checks when selecting and verifying new tenants are an important part of tenancy management for landlords and agents. Credit checks and referencing using a recognised referencing agency are vital if landlords are to avoid taking on a problem tenant.

Grounds for possession – Renters’ Rights Bill – Schedule 2 Housing Act 1988 and Schedule 1 Renters Rights Bill September 2024. 

This is a summary of those grounds for possession set out in the bill that are applicable to Private Landlords

For more detail see the guide to the bill and the bill itself in conjunction with the Housing Act 1988 as amended.

Mandatory Grounds

Ground

Description

Notice

1 – Occupation by Landlord or family

The landlord or their close family member wishes to move into the property. Cannot be used for the first 12 months of a new tenancy.

4 months

1A – Sale of rental dwelling

The landlord wishes to sell the property. Cannot be used for the first 12 months of a new tenancy.

4 months

4A – Properties rented to students for occupation by new students

A property is let to full-time students and is required for a new group of students in line with the academic year. Must be an HMO, all residents must be full-time students – “the student test” and have been given a notice that possession is required for the next cohort of students. Notice period – 1 June to 30 September. 

4 months

6 - Redevelopment

The landlord wishes to demolish or substantially redevelop the property which cannot be done with the tenant in situ. Various time limits and/or notice requirements exist for this ground depending on the circumstances.

4 months

6A – Compliance with enforcement action

The landlord is subject to enforcement action and needs to regain possession to become compliant.

4 months

7 – Death of tenant

The tenancy was passed on by will or intestacy. Possession proceedings must begin no later than 12 months after death or, if the court directs, after the date on which the landlord became aware of the death.

2 months

7A – Severe ASB/Criminal behaviour

The tenant has been convicted of a type of offence listed in the ground, has breached a relevant order put in place to prevent anti-social behaviour or there is a closure order in place prohibiting access for a continuous period of more than 48 hours.

Landlords can begin proceedings immediately

7B – No right to rent

At least one of the tenants has no right to rent under immigration law because of their immigration status and the Secretary of State has given notice to the landlord of this.

2 weeks

8 – Rent arrears

The tenant has at least 3 months’ (or 13 weeks’ if rent is paid weekly or fortnightly) rent arrears both at the time notice is served and at the time of the possession hearing.

[It would appear there’s no change to this ground allowing tenants to pay off some of the arrears immediately prior to a court hearing, bringing the outstanding amount below the threshold. Also, the bill says, “When calculating how much rent is unpaid for the purpose of this ground, if the tenant is entitled to receive an amount for housing as part of an award of universal credit under Part 1 of the Welfare Reform Act 2012, any amount that was unpaid only because the tenant had not yet received the payment of that award is to be ignored.” 

4 weeks

Discretionary Grounds

9 - Suitable alternative accommodation

Suitable alternative accommodation is available for the tenant

2 months

10 – Any rent arrears

The tenant is in any amount of arrears

4 weeks

11 – Persistent arrears

The tenant has persistently delayed paying their rent,

4 weeks

12 – Breach of tenancy

The tenant is guilty of breaching one of the terms of their tenancy agreement (other than the paying of rent)

2 weeks

13 - Deterioration of property

The tenant has caused the condition of the property to deteriorate

2 weeks

14 – Anti-social behaviour (ASB)

The tenant or anyone living in or visiting the property has been guilty of behaviour causing, or likely to cause, nuisance or annoyance to the landlord, a person employed in connection with housing management functions, or anyone living in, visiting or in the locality of the property. Or the tenant or a person living or visiting the property has been convicted of using the premises for illegal/immoral purposes or has been convicted of an indictable offence in the locality.

Landlords can begin proceedings immediately

14ZA - Rioting

The tenant or another adult living at the property has been convicted of an indictable offence which took place at a riot in the UK.

2 weeks

15 - Deterioration of furniture

The tenant has caused the condition of the furniture to deteriorate.

2 weeks

17 - False statement

The tenancy was granted due to a false statement made knowingly or recklessly by the tenant or someone acting on their instigation.

2 weeks

Rule changes. Many of these rule changes will make little difference to the way responsible landlords operate at present. However, there is to be a general tightening-up of the rules on the conditions in the property and in the ways in which tenants are treated. This includes in terms of discrimination, rent levels and increases, allowing children, benefit tenants and pets where appropriate and county court oversight of all evictions. 

The new bill should hold no fears for those responsible landlords / agents who take a proactive approach and provide safe, warm and secure properties and who treat tenants fairly.

Keep up to date on the Renters’ Rights Bill

Our media partner, LandlordZONE, offers exclusive insights and breaking news on the private rented sector. Keep up to date with everything you need to know by subscribing to LandlordZONE, the UK’s largest online landlord property news website.You can also visit Total Landlord's Renters (Reform) Bill hub which will be regularly updated as more details emerge.

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