Important News - Renters Rights Bill presented in Parliament

Here we go. The government are standing by their word and will push this Bill through as promised relatively quickly.

 

The Renters Rights Bill was ‘presented’ in Parliament on the 11th September and the Second Reading took place on the 12th September 2024.

 

The Bill

So what’s included in the Bill. New laws will ban unfair “no-fault evictions” , there will be an end to bad practices, such as bidding wars to drive up rents, and unreasonable mid-tenancy rent increases.   

 

According to the government, more than 11 million people in England live day in, day out with the knowledge that they could be uprooted from their home with little notice and no justification. This is not in fact the case as the majority of landlords (and letting agents) work well with tenants entering into discussion prior to the tenancy coming to an end, following formal processes and procedures to navigate renewal of tenancy or brining the tenancy to an end.

 

Overview of Bill Measures

The Renters’ Rights Bill will:

 

• Abolish section 21 evictions and move to a simpler tenancy structure where all assured tenancies are periodic – providing more security for tenants and empowering them to challenge poor practice and unfair rent increases without fear of eviction. The government will implement this new system in one stage, giving all tenants security immediately.

• Ensure possession grounds are fair to both parties, giving tenants more security, while ensuring landlords can recover their property when reasonable. The bill introduces new safeguards for tenants, giving them more time to find a home if landlords evict to move in or sell, and ensuring unscrupulous landlords cannot misuse grounds.

• 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. As now, landlords will still be able to increase rents to market price for their properties and an independent tribunal will make a judgement on this, if needed.

• Introduce a new Private Rented Sector Landlord Ombudsman that will provide quick, fair, impartial and binding resolution for tenants’ complaints about their landlord. This will bring tenant-landlord complaint resolution on par with established redress practices for tenants in social housing and consumers of property agent services

• Create a Private Rented Sector Database to help landlords understand their legal obligations and demonstrate compliance (giving good landlords confidence in their position), alongside providing better information to tenants to make informed decisions when entering into a tenancy agreement. It will also support local councils – helping them target enforcement activity where it is needed most. Landlords will need to be registered on the database in order to use certain possession grounds.

• Give tenants strengthened rights to request a pet in the property, which the landlord must consider and cannot unreasonably refuse. To support this, landlords will be able to require pet insurance to cover any damage to their property

• Apply the Decent Homes Standard to the private rented sector to give renters safer, better value homes and remove the blight of poor-quality homes in local communities.

• Apply ‘Awaab’s Law’ to the sector, setting clear legal expectations about the timeframes within which landlords in the private rented sector must take action to make homes safe where they contain serious hazards.

• Make it illegal for landlords and agents to discriminate against prospective tenants in receipt of benefits or with children – helping to ensure everyone is treated fairly when looking for a place to live.

• End the practice of rental bidding by prohibiting landlords and agents from asking for or accepting offers above the advertised rent. Landlords and agents will be required to publish an asking rent for their property and it will be illegal to accept offers made above this rate.

• Strengthen local authority enforcement by expanding civil penalties, introducing a package of investigatory powers and bringing in a new requirement for local authorities to report on enforcement activity.

• Strengthen rent repayment orders by extending them to superior landlords, doubling the maximum penalty and ensuring repeat offenders have to repay the maximum amount.

Tenancy Reform

The Renters’ Rights Bill will introduce a transformative new tenancy system, ending the threat of arbitrary section 21 evictions, which uproot renters from their homes with little notice and minimal justification. The new tenancy system will provide tenants with greater security and stability and empower them to challenge bad practice without fear of retaliatory eviction. Landlords will also benefit, with more straightforward regulation, and clearer and expanded possession grounds.

 

Periodic Tenancies

The Renters’ Rights Bill will remove fixed-term assured tenancies. Fixed-term tenancies mean renters are obliged to pay rent regardless of whether a property is up-to-standard, and they reduce flexibility to move in response to changing circumstances, for example after relationship breakdown, to take up a new job or when buying a first home.

 

Instead, all tenancies will be periodic, with tenants able to stay in their home until they decide to end the tenancy by giving 2 months’ notice. This will end the injustice of tenants being trapped paying rent for substandard properties and offer more flexibility to both parties to respond to changing circumstances.

 

Grounds for Possession

We value the contribution made by responsible landlords who provide quality homes to their tenants and believe landlords must enjoy robust grounds for possession where there is good reason to take their property back. To support this, the bill clarifies and expands grounds for possession, while ensuring tenants are protected from arbitrary eviction and given enough time to find a new home.

 

Landlords must, as in the current system, go to court if a tenant does not leave. They will need to provide evidence that the ground is met. For mandatory grounds, the court must award possession if the ground is proven. For discretionary grounds, the court can consider if eviction is reasonable, even when the ground is met.

 

Where a tenant is at fault, landlords can give notice using the relevant grounds at any point in the tenancy. This includes where a tenant commits antisocial behaviour, is damaging the property, or falls into significant arrears.

We will introduce new protections for tenants who temporarily fall into rent arrears, supporting both parties by preventing tenancies which are otherwise viable from ending. We will increase the mandatory threshold for eviction from 2 to 3 months’ arrears and increase the notice period from 2 weeks to 4. This will allow tenants more time to repay arrears and remain in their homes, while ensuring landlords do not face unsustainable costs. Landlords can also continue to use the discretionary rent arrears grounds, for example if rent is repeatedly late.

 

As well as tenants, landlords’ own circumstances can sometimes change, and the bill includes strengthened rights to reclaim properties when it’s necessary, for example to sell or move in. 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 when using these grounds, giving tenants more time to find a new home, and reducing the risk of homelessness.

 

In some sectors, it is necessary to move tenants on where accommodation is intended for a particular purpose, for example where the current tenant may no longer need the accommodation or is no longer eligible to occupy it. We will therefore introduce a limited number of possession grounds to ensure there is an adequate supply of properties in vital sectors such as temporary and supported accommodation, and for critical housing schemes such as ‘stepping stone’ accommodation.

 

To support compliance with requirements introduced elsewhere by the bill, we will prevent landlords gaining possession if they have not properly protected a tenant’s deposit or registered their property on the private rented sector database. We will ensure landlords are always able to rectify non-compliance, so they are not prevented from regaining possession indefinitely. These restrictions will not apply to antisocial behaviour grounds.

 

Rent Increases

In line with the government’s manifesto, we will empower private rented sector tenants to challenge unreasonable rent increases. This will prevent unscrupulous landlords using rent increases as a backdoor means of eviction, while ensuring rents can be increased to reflect market rates.

 

In future, all rent increases in the private rented sector will be made using the same process. Landlords will be able to increase rents once per year to the market rate – the price that would be achieved if the property was newly advertised to let. To do this, they will need to serve a simple ‘section 13’ notice, setting out the new rent and giving at least 2 months’ notice of it taking effect.

 

If a tenant believes the proposed rent increase exceeds market rate, they can then challenge this at the First-tier Tribunal, who will determine what the market rent should be.

 

We will reform how the Tribunal works to ensure tenants feel confident in challenging poor practice and enforcing their rights. Currently, tenants face the risk that the Tribunal may increase rent beyond what the landlord initially proposed – we will end this, so tenants never pay more than what the landlord asked for. We will also end the practice of backdating rent increases – with the new rent instead applying from the date of the Tribunal determination – to ensure tenants are not unexpectedly thrust into debt. And, in cases of undue hardship, we will give the Tribunal the power to defer rent increases by up to a further 2 months.

 

To ensure tenants always have a right of appeal, and prevent backdoor evictions, rent increases by any other means – such as rent review clauses – will not be permitted. This will also ensure all parties are clearer on their rights and responsibilities.

 

Credit: Susie Crolla (GLM)