The Renters Rights Bill – Latest for Landlords
The Renters Rights Bill had its first reading in the House of Commons recently. It will be scrutinised, and amendments may yet be made, but given the large Labour majority in the Commons, the Bill could move quickly and may even become law as soon as next year. Here's what Landlords need to know.
Many will already be familiar with the Renters (Reform) Bill that made its way to its second reading in the House of Lords under the previous Conservative government. It was lost due to the snap election but revived in the form of The Renters Rights Bill by Labour, whose manifesto promised the end of Section 21 'No Fault' evictions from day 1, should they get into power. The newly named Renters Rights Bill is largely the same as the previous iteration but includes an additional 80 clauses as Labour tries to fulfil its pledge to even the scales for landlords and tenants.
Removal of No-Fault Evictions
The removal of Section 21 No-Fault evictions has generated most of the headlines and although there are many other significant aspects of the new bill, such as the discarding of fixed-term tenancies and a new Landlord Ombudsman, this is where we'll begin. No-fault evictions were due to be scrapped in The Renters Reform Bill but Labours' Renters Rights Bill goes one step further when it comes to introducing much stronger protection for tenants, introducing rent control, and limiting rent increases for current tenants to once per year.
The end of fixed-term tenancies
The end of fixed-term tenancies will be a major issue for both tenants and landlords as tenants will lose their security of tenure and landlords will no longer have the guarantee of rent for the fixed term.
Tenants will now have to give two months notice to end a tenancy and the Government believes that the lack of a fixed term will make it more flexible for tenants to move if their circumstances change.
Removal of tenants
Tenants who are at fault will still be able to be served a Section 8 notice at any point during a tenancy. Previously, under Section 8 notices it was necessary for tenants to be 2 months in arrears when the notice was served and at the time of a court hearing in order for a Judge to grant possession back to the Landlord.
Under the new Bill this will still be the same however this will be increased to three months of arrears leading to mandatory possession and the notice period for the Landlord in this scenario will increase from two to four weeks.
Rent Increases
As there will be no renewal of tenancies, Landlords will be allowed to increase rent once a year to the market rate using a Section 13 notice of rent increase. Tenants will still have the opportunity to challenge this increase via the First-Tier Tribunal if they feel the increase is above market rate.
The Government have also made a big play of the banning of rental bidding wars. In our experience as an Agent, this is something that we don’t see and the only time that rents go over the asking rent is when tenants themselves offer more to secure a property. As an agent we can’t see this changing anything significantly for our Landlords in the North of England.
New Landlord Database & Ombudsman Service
Landlords will be required to join a new Ombudsman service for complaint management purposes and to make it easier for tenants to communicate anything they're unhappy with. In addition to this, it will also be compulsory for Landlords to join a new private rented sector database, better informing landlords of their obligations and allowing tenants to look at their prospective landlord's history of compliance ahead of time. This is a positive for many landlords but may ring alarm bells for those who struggle with compliance or don't have the time or resources to check every aspect of compliance. Of course, for those landlords who use a fully managed property management service, their agent will already be guiding them through compliance so we may see an increase in landlords opting to use these service for the peace of mind they provide.
Blanket refusals
Discrimination is something else that the Bill seeks to outlaw such as blanket bans on tenants with children or tenants that receive benefits.
Tenants will also have the right to request permission to keep a pet, subject to any necessary consents that the Landlord may need to get but the Landlord will be able to request that on giving permission for the tenant to keep a pet that the tenant has adequate insurance to cover the level of damage that the pet may cause to the property.
Final thoughts
It will be interesting to see if there are any significant changes to the Bill before it becomes law and we will be keeping a close eye on developments so that we can keep all Landlords and Tenants informed of any changes to the Private Rented Sector.
