Published: 01/11/24
The Renters’ Rights Bill, introduced by the Labour Government on 11th September 2024, aims to bring substantial changes to the rental market. The Bill passed its Second Reading in the House of Commons on 9th October 2024, with 424 MPs voting in favour and 104 against.
Having passed its Second Reading, the Bill will now move to the Committee Stage for detailed examination. It is expected to become law by the summer of 2025.
Currently, Section 21 of the Housing Act 1988 (“HA 1988”) enables private landlords to terminate a tenancy agreement without having to provide any reason and/or establish fault on the part of the tenant, commonly known as ‘no-fault’ evictions. A Section 21 notice requires the landlord to provide the tenant with two months’ notice to leave the property and if the tenant does not leave, it is mandatory for the court to make a possession Order.
One of the main changes proposed in the Bill is the abolition of Section 21 Notices. Landlords will no longer be able to evict tenants from their properties at short notice and without a valid, legally defined reason. The tenancy will end only if the tenant chooses to leave the property by providing two months’ notice, or if the landlord has a valid reason, as defined by law under Ground 8, Schedule 2 of the HA 1988. Such grounds for terminating the tenancy are being expanded and will include the landlord wanting to sell the property, redevelop the property, landlord/family moving into the property and where the tenant is at fault, including where a tenant commits antisocial behaviour, has damaged the property or is in significant rent arrears.
The grounds to evict a tenant for rent arrears are being widened and the tenant will have to have at least three months’ rent arrears, as opposed to two months, both at the time the notice is served and at the time of the possession hearing. Furthermore, the notice period for the rent arrears will be increased from two weeks to four weeks.
Under the Bill, landlords can only increase the rent once a year, which must align with market rates by serving a ‘Section 13’ notice, setting out the new rent and giving at least two months’ notice of it taking effect. The Bill introduces a prohibition on landlords asking for, or accepting offers, above the advertised rent price which will ultimately stop rental bidding wars.
Tenants will be able to challenge unreasonable rent increases which exceed the market rate at the First-tier Tribunal, who will determine what the market rent should be. The government’s aim is essentially to prevent backdoor means of eviction, while ensuring that rents can be increased to reflect current market rates.
The Bill is intended to make the market fairer by preventing landlords from discriminating against tenants who have children or receive benefits. The Bill will ensure that terms in mortgages and superior leases, which restrict the letting to private tenants who do not have children or do not receive benefits, have no effect. As such, if tenants do have children or are in receipt of benefits, the lender or landlord cannot claim a breach of contract even if the contract expressly prohibits this.
In addition, tenants will have the right to request to keep pets in their homes, and landlords will need a good reason to refuse such request.
Awaab’s Law, introduced in July 2023 as part of the Social Housing (Regulation) Act and setting out the governments’ new guidance on the health risks of damp and mould for social housing landlords, will now apply to private rentals whereby landlords must fix serious hazards in their properties, such as dampness or mould, within a set timeframe, otherwise landlords will risk certain penalties.
The Decent Homes Standard, first introduced in 2000 by the government to ensure that all social housing meets set standards of decency, will also apply to private rentals, ensuring properties are safe and habitable. If a privately rented property fails to meet the requirements under the Decent Home Standard, the local authority will be able to take enforcement action, such as the issue of civil penalties of up to £7,000.
In accordance with the HA 1988, long leases can currently be deemed as Assured Tenancies in certain circumstances, as such, the Court would be mandated to grant a possession Order where there are significant arrears. The Renters’ Rights Bill proposes that any lease with a fixed term over seven years can no longer be an Assured Tenancy. This will put an end to the issue of mandatory possession claims for rent arrears in long leases where ground rent is payable which exceeds certain limits.
What was previously called the ‘Property Portal’ will now be renamed as the ‘Private Rented Sector Database’. All landlords of assured and regulated tenancies will be legally required to register themselves and their properties on the database or face financial penalties and/or criminal prosecution.
Guide to the Renters’ Rights Bill - GOV.UK
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