Your guide to the main points in the Renters’ Rights Bill
A bill that will radically change the PRS was published last week - we look at the main points affecting landlords, tenants and letting agents.
The Renters’ Rights Bill, which was published by the Government last week, contains some major reforms of the PRS.
A ban on Section 21 ‘no fault’ evictions has grabbed the headlines, but there are many other measures in the bill that will affect landlords, tenants and agents.
Law next spring
The bill was given its first reading as it begins its progress through Parliament, with Housing Minister Matthew Pennycook predicting it will pass by spring next year and become law soon afterwards.
It contains many of the same things as its predecessor the Renters (Reform) Bill, which was introduced by the Conservatives, but was lost when the General Election was called in May. The new Labour Government has introduced 80 additional clauses.
From Government statistics, there are 2.3 million landlords in England and approximately 11 million renters.
Here are some of the most important measures in the bill:
- Removal of ‘no fault’ Section 21 notices for all tenancies
- A new mandatory Ombudsman for all landlords
- A mandatory private rental sector database of landlords
- Strict controls on rent bidding and offers during marketing a property for a tenant
- Removal of fixed term tenancies, creating rolling tenancies from the outset
- A 12-month protected tenancy period for tenants
- A ban from discriminating against tenants on benefits, or with children
- Tenants given strengthened rights for having a pet in a rented property
- Strict controls on rent reviews and a ban on in-tenancy rent review clauses
- Stricter possession grounds for landlords, with longer notice periods
- A new possession ground for landlords renting to students
- The Decent Homes Standard to be applied to the private rental sector
- The application of ‘Awaab’s Law’ to the private rental sector, setting timeframes for a property to be remedied of any health risks
- Strengthening of local authority enforcement powers and expanding civil penalties
- An expansion of Rent Repayment Orders
In more detail:
Tenancy and possession
End of Section 21, the so-called ‘no fault eviction’. (Section 21 notices served before the commencement date of the law will continue to be valid until they expire).
Abolish fixed-term tenancies. All tenancies to become periodic. Tenants can serve two months’ notice to end the tenancy, at any time, and via any written method.
New ‘landlord circumstance’ grounds. A new ground where the landlord needs to sell will be introduced, as well as an amended ground where the landlord or their family needs to move in. Landlords won’t be able to use these grounds in the first 12 months of a tenancy, will need to give four months’ notice, and can’t market the property for 12 months after the notice expires or the claim is filed at court.
Mandatory rent arrears ground amended – requiring three months’ arrears and four weeks’ notice.
A new student possession ground – which will require prior notice from the landlord and only applies to HMOs let entirely to students.
Ban discrimination against tenants in receipt of benefits or with children when choosing who to let to.
Ban on ‘no pets’ tenancies. Tenants will have the right to keep pets, and landlords will need a good reason if they refuse. Landlord can ask tenants to take out pet insurance to cover potential damage to property.
Setting rents
Ban rental bidding wars – preventing landlords and agents from encouraging or accepting rents above the listed rate.
Limit in-tenancy rent rises to a single annual increase capped to whichever is lowest of market rates or the amount proposed by the landlord. Landlords must give two months’ notice. Tenants can challenge this via the First-tier Tribunal. Any increase can’t happen until the tribunal has made its decision.
Standards and enforcement
Introduce a Decent Homes Standard to the private rented sector with fines of up to £7,000 for failing to meet standards
Extend Awaab’s Law to private renting – setting clear timeframes within which landlords must make homes safe where they contain serious hazards
Create a digital private rented sector database with information for landlords, tenants, and councils
Local authority enforcement – give local authorities greater powers to investigate and enter PRS properties, and substantially increase the financial penalties for non-compliance
Resolving disputes
Set up a new ombudsman service that will provide fair, impartial and binding resolution to both landlords and tenants, reducing the need to go to court.
(Support for landlords who want to initiate disputes will not be through the ombudsman, but the Government has confirmed they are looking at ways to allow this).
The full bill can be found here
Produced using material supplied by Butler Sherborn Estate Agency and the NRLA (National Residential Landlords Association).
Most of my property insurances have a clause stating that cover will not be given if tenants are in receipt of housing benefits or have been introduced by Council Homing Services. I wonder if this is being addressed?