In the know: Renters’ Rights Bill – key questions answered

The Renters’ Rights Bill aims to ensure a fair balance between strengthening the rights of tenants and preserving landlords’ ability to manage their properties effectively.

The proposed legislation has yet to complete its passage through Parliament, but we are not anticipating any significant changes to the wording, and it is expected to become law within the next few months.

It is similar in its scope to the Renters’ Reform Bill, which was first proposed by the previous Government, but with the addition of some additional clauses to further enhance tenant protections.

The proposals represent a substantial change for landlords across three key areas: rent, length of occupation and increased regulation.

It is important that landlords are prepared so they understand their rights and responsibilities under the new legislation, which will affect both existing and new tenancy agreements.

They will need records to demonstrate they are fully compliant with their new obligations and the increase in tenant protections makes conducting thorough tenant screening more important than ever.

Alongside these changes, landlords are also facing a tightening of Minimum Energy Efficiency Standards (MEES), so it may also be a good time to put a plan in place to address all of these issues.

The following are answers to some frequently asked questions on the contents and scope of the Renters’ Rights Bill. You can also download our briefing document (below) for more information and to see how Strutt & Parker can help you to prepare for the change in the law.

1. How does the legislation impact existing tenancies?

The Bill has a far-reaching impact in that it will abolish all Assured Shorthold Tenancies (ASTs) and fixed-term tenancies and all new and existing tenancies will become monthly periodic tenancies.

Only tenants will be able to end a tenancy and will have the right to quit from day one of their tenancy with two months’ notice.

Landlords will also no longer be able to terminate the tenant’s occupation without cause, using a Section 21 notice. Instead, they must rely on one of the specified grounds set out in the Housing Act. The list will include some mandatory grounds, where the court must award possession if the ground is proven. This would include where the landlord themselves, or a member of their family, would like to occupy the property.

However, there will also be discretionary grounds, where the court will consider if eviction is reasonable, even when the specified ground is met.

2. What is changing in terms of setting and reviewing rents?

There are significant changes in terms of setting rents, rent reviews and taking rent in advance.

New lettings must be advertised at a fixed rent and landlords cannot accept a rent above this level (but can accept a lower rent).

Rent reviews can only be carried out once in every 12-month period and increases must not be above market rents, so it will be important to be able to justify any set rent.

If a tenant considers a proposed rent is above market rent, then they can challenge this at the First Tier Tribunal (FTT).

Landlords can also only collect one month’s rent in advance and quarterly or yearly rent payments will not be permitted. Rent deposits will remain capped at 5 weeks’ rent.

3. Does this mean more administration?

Yes. Under the new law, landlords will need to issue a statement of terms before the start of all new tenancies and within one month of the law coming into effect for existing tenancies.

Landlords will have to register (and pay a fee for) a new tenant redress scheme.

They will also need to register (and pay a fee) for a new landlord database into which they will have to upload compliance documents (which at this stage are assumed to include the EPC, fire safety certificates etc).

Each property must be registered and landlords will be given a unique property reference number for use when marketing. Landlords cannot market the property or recover possession unless they are registered with both databases.

4. What is changing in terms of property standards?

The Decent Homes Standard is being extended to the private-rented sector. The details of the DHS are yet to be confirmed but will introduce new obligations relating to the state of repair of a property to ensure its safety and comfort for tenants.

In addition, landlords will be subject to new rules requiring them to resolve issues where hazards, such as damp and mould, pose a serious risk to the health and safety of the residents (Awaab’s Law). Landlords will need to address complaints within specified timescales.

5. Does the Bill apply to agricultural tenancies?

While it will not apply to residential property let under a Farm Business Tenancy (FBT) or Agricultural Holdings Act (AHA) tenancy, it will apply to any residential property on a holding that is subsequently sublet on an AST or Assured Tenancy so many farms and estates will be affected.

An updated procedure will also be put in place for landlords to avoid inadvertently creating Assured Agricultural Occupancies. The current use of a Form 9 will be replaced with an opt out notice.

If you would like to know more about the Renters’ Rights Bill and how it might impact your property portfolio, contact Sarah Roberts or Matthew Scott.

This article forms part of our ‘In the Know’ series which sees Strutt & Parker experts share insight and advice on how farms and estates can improve their business resilience, both from an economic and environmental perspective.