Solicitor Lauren Johnson, in our Dispute Resolution team, looks at the impact of the Renters’ Right Bill on landlords and tenants.
For years the law surrounding Landlord and Tenants has been under debate. The Renters’ Right Bill proposes some of the biggest changes affecting Landlords and Tenants in years.
The Bill’s long title provides a brief overview of the changes it intends to bring in:
‘’A Bill to make provision changing the law about rented homes, including provision abolishing fixed term assured tenancies and assured shorthold tenancies; imposing obligations on landlords and others in relation to rented homes and temporary and supported accommodation; and for connected purposes’’.
The Bill is currently making its way through Parliament and is anticipated to be implemented later in 2025.
What does it mean for Landlords and Tenants?
The Bill is expected to be implemented in one stage, meaning on the implementation date, the new system will apply to all existing tenancies, and any new tenancies granted after the implementation date.
Some of the most significant changes the Bill plans to implement are:
1. The end of fixed term tenancies
One of the major changes the Bill intends to bring in is the end of fixed term assured shorthold tenancies. Upon implementation, all fixed term assured shorthold tenancies will be converted to periodic tenancies. All new tenancies granted after the implementation date will be governed by the new system.
This change is expected to give greater security to tenants, meaning they can stay in their home indefinitely until they decide to give notice to the Landlord.
2. Abolition of section 21 notices ‘’no fault’’ evictions and new section 8 grounds
Under the Bill Landlords will no longer be able to evict their tenants using a section 21 notice. The ban of section 21 notices will come into practice as soon as the Bill is implemented, providing immediate greater protection for tenants against eviction. This change is intended to encourage tenants to challenge poor practice from Landlords without the fear of eviction.
Under the new system, if a Landlord wishes to evict a tenant, they must serve the new style section 8 notice. Similarly to the current section 8 procedure, a Landlord must set out in the notice at least one of the section 8 grounds as their reason for claiming possession and give the tenant the relevant notice period relating to the ground.
The list of section 8 grounds proposed under the Bill have changed slightly. Notably, ground 8, the rent arrears ground, which is one of the most used mandatory grounds under the current section 8 procedure to claim possession, has an increased threshold of 3 months arrears under the Bill, compared to the current 2 months. The notice period has also been to 4 weeks, compared to the current 2 week notice period Landlords must give.
If the Tenant does not leave after the expiration of the section 8 notice, the Landlord will need to apply to the Court to obtain an order for possession.
3. Private Rented Sector Landlord Ombudsman Service and Private Rented Database
Private Rented Sector Landlord Ombudsman Service:
All Landlords in England with assured or regulated tenancies will be required to register with the private rented sector landlord ombudsman service. This will be a free service for tenants where they can complain about their Landlord. The service will have the power to require Landlords to issue an apology, provide information, take remedial action, and pay compensation.
Failure by Landlords to comply with the ombudsmen’s decision regarding a tenant complaint or failure to register with the service could result in face being removed from the scheme and / or enforcement action from the local council. This will include civil penalties of up to £7,000 for initial breaches and up to £40,000 or criminal prosecution for continuing or repeated breaches.
Private Rented Database:
Similarly to the ombudsman service, Landlords will also be required to register with the private rented database. The database will provide guidance on Landlord’s obligations and up to date changes in the guidance.
Landlords in breach of the duty to register with the database will not be able to get a possession order except if the ground under which possession is sought is ground 7A or ground 14. Local councils will also be able to take enforcement action against Landlords who fail to register with the database, with penalties similar to those set out above.
Some other changes proposed by the Bill are increased rights for a tenant to request a pet in the property and application of the Decent Homes Standard, which sets out regulations Landlords must comply with to give tenants better quality homes.
Next steps for Landlords
Landlords will need to keep a close watch on when the Bill will be implemented as it could require Landlords to actively make some changes in the way they are dealing with rented homes.
The Bill is currently going through the House of Commons and is due to go through the Report Stage in mid-January 2025.
Our Dispute Resolution team can advise on property related disputes.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
