What Landlords Need to Know About the Renters’ Rights Bill at it passes through stage two of its progress in Parliament – 10/10/2024

As the Renters’ Rights Bill moves through Parliament, it’s clear that major changes are on the horizon for UK landlords. At Tortoise Property, we understand how important it is for landlords to stay informed and be prepared for the impact of this legislation. In this post, we’ll break down the key amendments in the bill and explain how they will affect you as a residential landlord.

1. Abolition of Fixed-Term and Assured Shorthold Tenancies

One of the most significant changes in the Renters’ Rights Bill is the abolition of fixed-term and assured shorthold tenancies. Once the bill is passed, all tenancies will become periodic, meaning landlords will no longer be able to offer fixed-term contracts for a set number of years. Instead, tenancies will automatically renew on a monthly basis unless a tenant gives notice or there is a valid reason for the landlord to seek possession.

For landlords, this shift means a more flexible rental market, but it also means reviewing your long-term property strategies to adapt to this new framework.

2. Changes to Grounds for Possession

The bill also proposes stricter rules on when and why landlords can seek possession of a property. Under the new legislation, there will be tighter controls on “no-fault” evictions, known as Section 21 notices. Instead of simply issuing a notice without providing a reason, landlords will need clear, justifiable grounds for eviction, such as anti-social behaviour or rent arrears.

The courts will also be required to consider additional factors when making decisions about eviction cases, making it more challenging to remove tenants unless a strong legal reason is provided.

3. Rent Increases: New Controls and Challenges

Rent increases are a critical area for landlords, and the Renters’ Rights Bill will introduce new controls to regulate them. If landlords wish to raise the rent, they will need to follow a statutory procedure, and tenants will have the right to challenge any increase they consider unreasonable.

This means landlords must be cautious and plan carefully when it comes to rent increases, as tenants may turn to a tribunal if they feel the rise is unjustified.

4. Tenants’ Right to Request Pets

One of the more surprising elements of the bill is that it gives tenants the right to request permission to keep a pet. Under the new rules, landlords cannot simply refuse such a request without a valid reason. However, landlords can require tenants to take out pet insurance or cover potential damage caused by pets.

While this offers tenants more flexibility, it also gives landlords the option to protect their property, ensuring that any damage caused by pets is covered.

5. Financial Penalties for Non-Compliance

The new bill introduces significant financial penalties for landlords who fail to comply with the regulations. These penalties can reach up to £7,000 for issues such as illegal evictions or failing to follow proper procedures when managing tenancies.

It is essential for landlords to stay on top of their legal responsibilities to avoid these costly fines.

6. Mandatory Landlord Redress Schemes

Landlords will be required to join a mandatory redress scheme under the new legislation. These schemes provide a platform for resolving disputes between landlords and tenants, offering a quicker alternative to court proceedings.

Failure to join one of these schemes could result in penalties, so it’s important to make this a priority.

7. Tackling Discrimination in the Rental Market

Another crucial aspect of the Renters’ Rights Bill is the prohibition of discrimination in the rental market. Landlords will no longer be able to refuse to rent to tenants based on factors such as having children or being in receipt of benefits.

Any clauses in tenancy agreements that restrict tenancy on these grounds will need to be removed to comply with the new rules.

8. The Decent Homes Standard

One of the practical changes for landlords concerns the Decent Homes Standard. If your property doesn’t meet this standard, you won’t be able to advertise or rent it out. The Decent Homes

Standard ensures that all rental properties are:

  • Safe and free from serious hazards,
  • Properly heated and insulated, and
  • Fit for habitation.

Landlords will need to make sure their properties meet these criteria or face the possibility of losing tenants or being unable to market their properties.

9. Changes to the Tenant Fees Act

The bill will also make changes to the Tenant Fees Act, particularly around pet insurance. Landlords will now be able to charge tenants for pet insurance under certain circumstances, helping manage the risks associated with tenants keeping pets in rental properties.

10. Rent Repayment Orders

The bill introduces rent repayment orders, which protect tenants who pay rent in advance. If a tenancy ends earlier than expected, tenants will be entitled to a refund for rent that covers the period after the tenancy ends.

This is another layer of tenant protection that landlords will need to factor into their financial planning.

Additional Information for Landlords

In addition to these core changes, there are a few other important points for landlords to consider:

  • Transitional Provisions: Existing fixed-term tenancies will automatically convert into periodic tenancies, so landlords should review and update their contracts during this transition period.
  • Impact on Existing Contracts: Many of these changes will override current tenancy terms. Contracts will need to be updated to comply with new rules around rent increases, pets, and possession.
  • Legal Support and Resources: We recommend that landlords seek professional advice to ensure they are fully compliant with the new legislation. Solicitors, landlord associations, and professional property management companies can offer valuable guidance.
  • Key Dates and Deadlines: There will be deadlines for compliance, including updating tenancy agreements and joining redress schemes. Landlords should be prepared and act early to avoid penalties.

Conclusion

The Renters’ Rights Bill is set to bring significant changes to the UK rental market. As landlords, it’s essential to stay informed and take the necessary steps to ensure compliance with the new regulations. From changes to tenancy structures to new financial penalties and protections for tenants, there’s a lot to consider.

At Tortoise Property, we’re here to help you navigate these changes and ensure that you’re fully prepared for the future. If you have any questions or need support, feel free to reach out to us.

For more information on the Renters’ Rights Bill, visit the Parliament website.

If  you would like to call please please ring 01733 592020.

Mike Matthews

Tortoise Property

mike.matthews@tortoiseproperty.com