What Landlords Need to Know About the Upcoming Renters’ Rights Bill

Significant changes are on the way for the rental market with the introduction of the Renters’ Rights Bill, unveiled by the Labour Government on 11 September 2024. This pivotal legislation has just been officially presented and had its First Reading in the House of Commons, marking the beginning of a major overhaul in how tenancies are managed across the UK.

As the bill progresses towards its Second Reading on 9 October 2024, it’s crucial for landlords to understand the forthcoming changes and how to prepare for them. Here’s a comprehensive guide to the new provisions and their implications for you as a landlord.

Understanding the Renters (Reform) Bill vs. the Renters’ Rights Bill

What Was the Renters (Reform) Bill?

The Renters (Reform) Bill was a proposed piece of legislation aimed at overhauling the private rental sector in England. Introduced in 2022, its primary goals were to improve tenant protections and create a fairer rental market.

Some of the key features included:

• Abolition of Section 21: This would end “no-fault” evictions, requiring landlords to provide a valid reason for terminating a tenancy.
• Rent Control Measures: The bill proposed limits on how often and by how much rent could be increased.
• Improved Tenancy Terms: It aimed to make it easier for tenants to request changes to their rental terms, such as keeping pets or making minor improvements.
• Decent Homes Standard: Enhanced standards to ensure rental properties are safe and habitable.

While the Renters (Reform) Bill made significant strides towards tenant protection, it was not fully enacted before changes were made in subsequent legislative processes.

What Is the Renters’ Rights Bill?

The Renters’ Rights Bill, introduced on 11 September 2024, builds upon the proposals of the Renters (Reform) Bill but includes some notable changes and updates. It continues to focus on enhancing tenant protections but has adjusted some of the original provisions.

Changes from the Renters (Reform) Bill

The Renters’ Rights Bill introduces some modifications to provisions originally outlined in the Renters (Reform) Bill:

1. Longer Notice Periods for Section 8 Possession Procedures: Notice periods for some Section 8 grounds for possession have been extended. For example:

1. 1. Ground 1 (occupation by landlord or family): Notice period extended to 4 months, up from 2 months, and cannot take effect within the first 12 months of a tenancy.
   2. Ground 1A (sale of property): Notice period extended to 4 months, up from 2 months, and cannot take effect within the first 12 months.
   3. Ground 4A (student HMOs for occupation by full-time students): Notice period extended to 4 months, up from 2 months.
   4. Ground 6 (redevelopment by landlord): Notice period extended to 4 months, up from 2 months.
   5. Ground 8 (serious rent arrears): Remains unchanged at 4 weeks’ notice.

2. Mandatory Ground 1A: The new Mandatory Ground 1A, which allows eviction if you intend to sell the property, requires the notice to take effect only after 12 months into the tenancy, up from 6 months under the Renters (Reform) Bill. Additionally, you must provide 4 months’ notice and are prohibited from re-marketing or re-letting the property for 12 months from the notice’s service date. Violations could result in fines up to £7,000.

3. Restrictions on Ground 4A: The Renters’ Rights Bill limits Mandatory Ground 4A to full-time students in HMOs, reverting to the original draft of the Renters (Reform) Bill. This means if a student is renting alone or with other students outside of an HMO, Ground 4A cannot be used.

4. Changes to Mandatory Ground 8: Ground 8 now requires that rent arrears must be three months at the time the notice is served and at the hearing, increased from two months in the previous bill. The notice period remains at 4 weeks.

5. Longer Notice Period for Section 13 Rent Increases: The notice period for Section 13 rent increases has been extended from one month to two months.

6. Shorter Approval Time for Pets: Landlords now have 28 days, down from 42 days in the Renters (Reform) Bill, to consider requests for pets.

7. No “Hardship” Test: Contrary to some speculation, the Renters’ Rights Bill does not include a hardship test for Section 8 mandatory grounds for possession. The courts will continue to enforce possession orders if landlords meet the requirements of the relevant ground.

Why the Difference?

The differences between the Renters (Reform) Bill and the Renters’ Rights Bill reflect a response to stakeholder feedback and evolving priorities. The Renters’ Rights Bill incorporates more specific details and adjustments based on practical considerations and concerns raised during consultations. It aims to balance tenant protections with the needs and realities faced by landlords, ensuring a more refined and effective approach to rental market reform.

In summary, while the Renters (Reform) Bill laid the groundwork for important changes in tenant rights, the Renters’ Rights Bill builds upon this foundation with updated provisions that reflect the current landscape and address feedback from landlords and tenant advocacy groups.

Preparing for the Changes

With the Renters’ Rights Bill expected to become law by summer 2025, it’s important to start preparing now. Review your tenancy agreements, update policies on rent increases and pets, and ensure compliance with the Decent Homes Standard. Staying informed about the bill’s progression and any potential amendments will be crucial.

Final Thoughts

Navigating these changes will require adjustments, but with proactive planning, you can manage the transition smoothly. At Eviction Support Group, we’re here to support you, offering guidance on managing evictions under the updated rules.