Renters Rights Bill Summary

Renters Rights Bill Summary

The Renters’ Rights Bill (RRB), although not yet finalised, is expected to pass into law by the summer.

Intended to give tenants greater protection, it spells the end of Assured Shorthold Tenancies, also known as ASTs – the most common type of agreement if you rent to private individuals.

So, what does the Renters’ Rights Bill mean for landlords?

1. Period tenancies replacing fixed term tenancies.
2. No fault evictions and notice periods.
3. How can a Landlord serve notice
4. Pets
5. Advanced Rent
6. Rental bidding
7. Increasing rents
8. The effect on current tenancies
9. Penalties for non compliance.

1. All tenancies will become periodic.

The new legislation will mean that landlords and tenants will no longer agree fixed tenancy periods.

Instead, tenancies will run from month to month until either the tenant serves notice (two months)  or the landlord meets one of the grounds for regaining possession of the property. These tenancies will be known as assured periodic tenancies.

We are not expecting this to have a dramatic impact on the length of time tenants stay as most enquiries are for a minimum of 12 months with tenants only wanting to leave if a change in circumstances occurs.  In this case, even in the case of fixed tenancies, we always advise not to hold a tenant there against their will and advise best practice to replace them with a tenant who is wanting to be there on a more permanent basis.

2. No fault evictions and notice periods.

During the first 12 months of any new tenancy, landlords will not be allowed to move back into their property or attempt to sell it unless they sell to another landlord who will take over the tenancy. This means tenants will have a 12-month protected period; however a tenant can serve notice to terminate during this period. Tenants will be required to give two months’ notice to leave and this must be in line with the rent payment date.

Again, we are not expecting this to have a major impact on our landlords as the current reasons for most notices (selling, rent arrears etc) are still in place.

3. Under the new legislation, how will I regain possession of my property?

The new legislation will abolish section 21 notices (known as no-fault evictions) with the aim of providing more security for tenants.

Landlords must instead use a section 8 notice, citing one of the specific grounds for possession. These include if the landlord (or their family) wants to move into the property, or they want to sell it, among other reasons such as rental arrears and antisocial behaviour.

You will still be able to serve notice if you wish to sell the property or the tenant is in breach of rent arrears or other fundamental terms of the tenancy agreement.

4. Under the proposed new law you will not be able to refuse a tenant permission to have a pet at the property unless there is  a justifiable reason why (ie large dog in a small apartment or multiple dogs in a small garden).

5. No advance rent allowed

The new law also means you are not able to accept rent in advance beyond a one month period. (ie 6 month in advance cannot be agreed and accepted at the start of the tenancy). If a tenant cannot pass referencing without relying on advance rent, we will not accept them as a new tenant.

6. Rental bidding

Landlords and agents will be required to publish an asking rent for the property. This means they will not be allowed to encourage or accept bids above the stated price.

7. As a landlord, will I be able to increase rents? 

Yes, an annual rent increase can be proposed by landlords. They must do this by serving the tenant a section 13 notice. Any proposed increase must be in line with local market rents and evidence provided if required.

If the tenant accepts the proposed increase they will start paying from the next rent due date after the anniversary.

If a tenant believes the rent increase is above the market rate they can dispute it by applying to the First Tier Tribunal. However, they must do this before the start date of the proposed new rent.

We will diarise to review the rent yearly in replace of tenancy renewals to ensure you are achieving the market rate for your properties.

8. Will the new legislation come into force for new and existing tenancies at the same time?

As the Bill is written, the implementation of the new legislation for new and existing tenancies is set to take place on the same day and currently does not allow for any phasing in or out.

It is understood that there will be an adjustment period before the legislation is enforced to allow landlords and agents time to prepare for the new tenancy rules.

9. What happens if landlords or their agents breach the new legislation?

Non-compliance will be met with fines. These fines are being increased and local authority enforcement powers will be strengthened. Fines can be up to £7,000 for minor or initial non-compliance and up to £40,000 for repeat offences.

This is our understanding of the Bill as it’s currently written, there may be some amendments as it works its way through the legal process and we will keep you advised.