We look below at the key provisions set out in the Renters’ Rights Bill introduced to Parliament on 11 September 2024 that, once passed into law, will make significant changes to residential landlord and tenant law in England.
We focus on the key provisions that apply to the private rented sector.
WolfBite - the key takeaways
• The Renters’ Rights Bill is an amended version of the previous government’s Renters (Reform) Bill.
• The new Bill retains many of the provisions of its predecessor, such as the abolition of assured shorthold tenancies, fixed terms, and “no-fault” evictions under section 21 of the Housing Act 1988.
• There are some notable additions, however, such as new provisions aimed at improving private rented housing standards, outlawing rental bidding wars and extending the circumstances in which Rent Repayment Orders can be made.
• There are also some notable changes, such as to increase some of the notice periods landlords must give when serving section 8 notices, and increasing the financial penalties for breaching the new obligations.
• The new Bill is to be implemented in one stage, not two.
• The new tenancy regime could commence by as early as summer 2025 and will not be tied to a review of the state of readiness of the County Courts.
Renters’ Rights Bill
The Renters’ Rights Bill is an amended version of its predecessor, the Renters (Reform) Bill which was stopped in its tracks after the general election was called earlier this year.
The previous Bill had gone quite some way down the track. Given that many of the provisions in the new Bill are the same or substantially the same, and have therefore already been scrutinised by Parliament, the government expects that it will make speedy progress to becoming law.
As the new Bill currently stands, the key proposals so far as they apply to private landlords and tenants in England are:
• Assured shorthold tenancies will cease to exist.
• There will be no more fixed terms; all tenancies will be periodic assured tenancies, rolling on a monthly or shorter basis.
• No-fault evictions under section 21 of the Housing Act 1988 will be abolished.
• For section 8 notices, new grounds for possession will be introduced (including a new ground where the landlord wants to sell) and some existing grounds will be amended (for example, enabling the landlord to recover possession where a parent, child or grandchild are to move in, and widening the anti-social behaviour ground).
• The notice periods required when relying on certain grounds for possession (such as for rent arrears) will increase.
• Landlords will need to give a written statement of the terms of the tenancy before the tenancy is entered into.
• Deposits will need to be protected before possession orders can be obtained under most grounds for possession.
• Tenants will be able to challenge the rent in the first six months of a new tenancy; private landlords will have to use the statutory process to increase the rent. The new rent will apply from the date of the tribunal determination, with power to defer this in cases of undue hardship.
• Tenants will be able to terminate assured tenancies by giving two months' notice.
• Tenants will have a right to request permission to keep a pet that landlord’s will not be able to unreasonably withhold. Landlords will, however, be able to require pet damage insurance, the cost of which will be a permitted payment under the Tenant Fees Act 2019.
• Landlords could be required to join a new landlord redress scheme before they market or let properties.
• Information about the landlord and the property will need to be entered on a new Private Rented Sector Database before a property can be advertised.
• Make it unlawful to discriminate against those in receipt of benefits or with children.
• It will no longer be possible for long residential leases to be assured tenancies, addressing a longstanding issue where some long leases are vulnerable to being terminated as assured tenancies under the Housing Act 1988.
• Bring measures in that will end bidding wars between prospective tenants by requiring an asking price to be specified and prohibiting landlords and agents from inviting, encouraging or accepting higher bids.
• Apply a “Decent Homes Standard” to the private rented sector, ensuring properties meet minimum levels of repair and safety.
• Extend “Awaab’s Law” to the private rented sector, requiring health hazards to be investigated and fixed in a timely manner.
• Create a digital database with key information for landlords, tenants and councils.
• Require landlords to join a new Private Rented Sector Ombudsman Service to deal with tenants’ complaints, aimed at reducing the need to go to court.
• Strengthen local housing authorities’ enforcement powers.
• Extend the circumstances in which Rent Repayment Orders can be made requiring landlords who commit specified offences to repay rent to tenants.
How does the Renters’ Rights Bill differ from its predecessor?
Although the Renters’ Rights Bill is a revised version of the previous Conservative government’s Bill, there are some notable differences, including:
Rent arrears - Under the new Bill a landlord serving a section 8 notice on the grounds of rent arrears will need to show that there are at least three (rather than two) months’ rent arrears at both the time of serving notice and at the hearing (or thirteen (rather than eight) weeks’ arrears if rent is payable weekly or fortnightly). The previous Bill also proposed a new mandatory ground based on repeated rent arrears, but this has been deleted.
Notice periods - The length of some of the notice periods required when relying on certain grounds for possession have also increased. For example, where the landlord wishes to recover possession in order to sell the property, the new Bill proposes four rather than two months’ notice.
Restricted periods - The length of time landlords will need to wait before being able to rely on some of the grounds for possession have also been extended. For example, where the landlord wishes to recover possession so that they or a close family member can move in, the tenancy will need to have existed for at least one year, up from six months. Similarly, where a landlord serves a section 8 notice stating its wish to move into the property or redevelop, the period during which it is then restricted from re-letting or re-marketing has been increased from three to 12 months.
Rent increases – There are some changes to the way the statutory procedure for challenging rent increases will work. For example, tenants will no longer need to use a prescribed form (a standard form will still be available though), and they will not have to pay a higher rent than the landlord has proposed.
Housing standards - The provisions extending the Decent Home Standard and Awaab’s Law to the private rented sector did not feature in the Renters (Reform) Bill.
Rental bidding – The measures outlawing rental bidding were also not included in the Bill’s predecessor.
Financial penalties - Many of the financial penalties that local housing authorities can impose on landlords for breach key aspects of the new legislation have been increased. Proposed penalties that were previously £5,000 have increased to £7,000, and fines of up to £30,000 have increased to £40,000. Given that councils will be able to keep and use these monies for future enforcement, this is a meaningful increase.
Pets - The time period within which landlords will need to respond to a tenant’s written request to keep a pet has been shortened from 42 to 28 days.
Restriction on possession orders - A new provision has been included that will prevent the court from making a possession order while the landlord is in breach of the obligation to maintain an entry on the new Private Rented Sector Database (subject to limited exceptions).
Rent Repayment Orders (RROs) - The new Bill extends the list of offences for which RROs can be made. RROs are made by the tribunal, requiring a private landlord to repay rent to a tenant or local authority where satisfied that a landlord has committed a specified offence, such as failing to have an HMO licence. Under the new Bill RROs could be made for misusing the possession grounds, breaching the restrictions on re-letting or re-marketing, or failing to maintain an active entry on the new Database. It will also be possible to make RROs against superior landlords and company directors (in rent-to-rent arrangements). The period in which an RRO application can be made will also increase from 12 months to two years.
When might the Bill come into force?
Another significant development is the proposed timescale for bringing the new legislation into effect.
The previous Conservative government’s Bill proposed bringing the changes into force in two stages.
The new Bill, however, proposes introducing the new tenancy system in one stage.
In this way, a commencement date will be fixed on which existing tenancies will convert to the new system and any new tenancies that are signed on or after that date will also be governed by the new regime. Possession proceedings that have already started will, however, be allowed to conclude under the existing rules.
The government has indicated that it will provide a period of notice before the new regime comes into force but, in an interview with the BBC, the Housing Minister suggested that the hope was to put the new tenancy system in place by the summer of 2025.
Will County Courts be able to cope?
The new Bill’s predecessor contained provisions requiring the Lord Chancellor to assess the operation of the possession process in the County Courts in England.
This tied-in to the previous government’s strategy (possibly designed to placate those on its backbenches at the time) of delaying the ban on so-called “no-fault evictions” until satisfied that the Courts could cope with the resulting increase in possession claims brought in consequence of section 8 notices.
Those provisions have been removed from the new Bill.
Instead, guidance issued alongside the new draft Bill says that “…as now, landlords will only need to go through the courts in a small minority of cases where a tenant doesn’t leave at the end of a notice period”.
The guidance continues by saying that the government “expects” that its rental reforms will reduce demand on the courts, that other avenues for early dispute resolution will be available and that it is working with HM Courts and Tribunals Service to “…ensure that the County Court is prepared for the changes to the tenancy system”.
For our part, the government appears to be underestimating the scale of the problem, and the time and money that will be required to improve the already struggling Court system to a level that it could deal effectively with the anticipated increase in section 8-based possession claims.
We will monitor the Bill as it progresses through Parliament.
