The Government has revealed much more detail about its long-awaited and somewhat feared Renters’ Rights Bill that had its initial reading in parliament earlier this month.
While the Bill is very similar to the Tory’s Renters (Reform) Bill from a drafting perspective, Labour’s housing minister – and the Bill’s architect – Matthew Pennycook (main image) has now revealed more about the bewildering range of new regulations, fines and responsibilities that landlords and their agents face once the bill goes live.
This will be most likely in April or May next year, although Pennycook has made it clear some of its measures will be phased in as they will require secondary legislation, while some will land immediately particularly the ban on Section 21 evictions.
The new guidance runs to nearly 10,000 words so here is our summary of what’s inside. We will be publishing a separate exploration of the changes to evictions and tenancy law.
Many readers will be unaware that the system of fixed-term Assured Shorthold Tenancies used in England for some 40 years is to be swept away and replaced largely by open-ended periodic tenancies and tenants will be able to give two months’ notice to quit at any point in the tenancy while it will be much more difficult and time-consuming for landlords who need to eject tenants.
Landlords will be restricted to one rent increase a year ‘to the market rate’ and will have to be executed via an official Section 13 notice while tenants will have to be given two months’ notice, and will be able to challenge the increase via a simplified First Tier Tribunal system. Rent review clauses within contracts are also to be banned.
Landlords will have to sign up to paid-for membership of the Private Rented Sector Landlord Ombudsman whether they use a letting agent or not. Tenants will use the service to complain about landlords and if problems are unresolved, the ombudsman will be able to compel landlords to apologise, provide information, take remedial action and/or pay compensation. Non-compliant landlords will face fines of up to £40,000 in the worst case if they fail to join the scheme.
Landlords are to have their personal and property details publishing within a new Private Rented Sector Database for England and it will be mandatory to be registered on the database with, again, fines reaching £40,000 for those who refuse to comply. The database will also become a training and information portal for landlords.
The Bill will formalise a ban on landlords who won’t take on tenants with children or those on benefits ‘overtly’ while giving landlords the final say on who lets their property based on each tenant’s ability to pay the rent or pass referencing checks but not just because they are a family or in receipt of Universal Credit.
Landlords will be able to reject tenants if they don’t ‘suit’ a property so for example a mother with a baby wanting to rent a studio flat. The Government is also to ban agreements or mortgage terms that prevent landlords renting out to these two groups. Landlords will face a fine of up to £7,000 if found flouting these rules.
These are to be banned in a “crackdown on the minority of unscrupulous landlords who make the most of the housing crisis by forcing tenants to bid for their properties”. Once enacted, the Renters’ Rights Bill will require landlords and letting agents to publish an asking rent for their property. It will also prohibit them from requiring, encouraging, or accepting any bids above this price.
As previously announced, tenants will be given the right to challenge landlords who stipulate ‘no pets’ but landlords will be allowed to require tenants who do bring in animals to their homes to take out pet damage insurance.
Landlords will have to ensure their properties meet a national Decent Homes Standard including ensuring damp and mould issues are dealt with promptly via ‘Awaab’s Law’ requirements, and tenants will be able to take their landlord to court over non-compliance.
These are already used often by tenants to reclaim their rent when a landlord fails to licence a property and in London these orders can be very expensive, often running into five figures. Labour plans to double this to 24 months’ rent while also enlarging the scope of RROs to include:
• Knowingly or recklessly misusing a possession ground;
• Breach of a restriction on letting or marketing a dwelling-house;
• Continued tenancy reform breach after imposition of a financial penalty, continued breach of landlord redress scheme regulations after imposition of a financial penalty for this breach;
• Provision of false information to the PRS Database when purporting to comply with PRS Database regulations
• Continued failure to register with the PRS Database after imposition of a financial penalty for this breach.
RROs will also be extended to cover ‘superior landlords’ and company directors in order to include the rent-to-rent sector.
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