What is the Renters’ Rights Bill and how will it impact possession proceedings?

The Renters’ Rights Bill (“the Bill”) is a bill that was introduced in Parliament (the House of Commons) in September 2024. The Bill has undergone its 1^st reading; however it still has a long way to go before it obtains royal assent and becomes law.

The Bill is the new Labour government’s response to the conservative government’s Renters (Reform) Bill. Due to the Snap General Election, the Conservative Party’s Renters (Reform) Bill did not pass through all the stages of the legislative process before Parliament was dissolved and thus it was not made into law. Both bills attempt to reform the private residential renting market. However, they have a slightly different approach.

The Renters’ Rights Bill includes similar provisions to the Conservative’s Bill in terms of the abolition of Section 21 no-fault evictions and the inclusion of pets in rental agreements. However, it also includes new reforms focusing on the ensuring Homes for rent are of a decent standard, in addition to addressing rental bidding wars.

The Current Legal Position

Notwithstanding any upcoming bills the current legal position for a landlord wanting to terminate an assured shorthold tenancy is as follows:

Serve a section 21 notice to terminate the tenancy on a no-fault basis.
Serve a section 8 notice to terminate the tenancy on specific grounds which are listed in Schedule 2 to the Housing Act 1988 (as amended).

When will the Renters’ Rights Bill Become Law?

The first reading of the bill took place on the 11^th September 2024 in the House of Commons. However, it still needs to undergo multiple readings in both the House of Commons and the House of Lords before receiving Royal Assent. The Bill is currently expected to come into effect in mid-2025.

The Proposed changes in the Renters’ Rights Bill

Abolishing section 21 evictions
1. The Bill proposes to abolish ‘no-fault’ evictions. This will apply to both new and existing tenancies. Following the implementation of the Bill, Landlords will have to rely instead on a s.8 ground for possession. A full list of proposed grounds for possession can be found at table 1, here: https://www.gov.uk/government/publications/guide-to-the-renters-rights-bill/82ffc7fb-64b0-4af5-a72e-c24701a5f12a#tenancy-reform. A landlord will only be able to evict a tenant for a prescribed reason, as listed in the table enclosed above.
2. This could potentially place a greater burden on the courts and their resources due to the expected rise in cases. It is unclear at this stage if there will be any reform to the judicial system to address this.
3. As well as abolishment of the ‘no-fault’ route to eviction, the Bill proposes to alter mandatory ground 8 of the Housing Act 1998, which relates to rent arrears. At the moment, a landlord can serve a s.8 notice if there are at least 2 months of rent arrears. That s.8 notice will currently take 2 weeks to expire. The Bill describes that a landlord can serve a s.8 notice if there are at least 3 months of rent arrears. That s.8 notice will take 4 weeks to expire. This is a significant change.
Abolishing Fixed Term Tenancies
1. The Bill proposes to abolish all assured shorthold, fixed term tenancies. When implemented the Bill will make all residential tenancies periodic, assured tenancies, which is a significant change and important to note.
Introducing a new Private Rented Sector Landlord Ombudsman
1. The introduction of the Ombudsman is intended to provide an impartial and fair resolution service to settle disputes between tenants and landlords without having to take the dispute to court.
2. All private landlords will be required by law to join the service. Failure to join the service will render landlords liable for civil penalties and criminal prosecution. Tenants will be able to use the service for free, to complain about a landlords’ actions or behaviours. The Ombudsman will have powers to compel landlords to issue an apology, provide information, take remedial action or pay compensation. Landlord will likely be required to pay an annual fee per property for signing up to the service. Landlords will not be able to use the Ombudsman service to complain about their tenants.
Creation of a Private Rented Sector Database
1. All landlords and their properties will need to be registered on the Private Rented Sector Database and could be subject to penalties if they market or let a property without registering it. Further, if landlords do not register then they will not be able to obtain a possession order, except in limited grounds.
2. Landlords will be required to pay to register on the database. It is yet to be determined how much private information shall be freely available on the public register.
Providing Tenants strengthened rights to request a pet in the property
1. Currently there is no statutory right for a tenant to keep a pet at their rental property, nor a statutory right to request to keep one. At present the tenant’s rights in this regard are dependent on the term of the tenancy. Most commonly, tenancy agreements prohibit tenants from keeping a pet at the property.
2. The Bill will give all tenants the right to request a pet. It will also give Landlords the right to require insurance covering pet damage to protect against potential damage caused by pets.
Applying the Decent Homes Standard to Private Rented Sector including the application of ‘Awaab’s Law’
1. This will aim to provide safer, better value homes to renters and reduce the number of poor-quality homes in communities. The Bill introduces a ‘Decent Homes Standard’ (DHS) in the private rented sector. This will result in further regulations to be made, setting out DHS requirements and will provide local councils with enforcement powers. At the moment this appears to be not too dissimilar to the improvement notice or emergency remedial action notice currently in existence, simply with introduction of a DHS.
2. ‘Awaab’s law’ was introduced through the Social Housing (regulation) Act 2023, and previously only applied to social housing. Following the implementation of this Bill, ‘Awaab’s Law will also apply to privately rented homes. It means that landlords must address hazards such as damp and mould within a specific time frame otherwise enforcement action may be brought against them. This will likely also work in conjunction with the new Ombudsman.
Making it illegal for landlord and agents to discriminate against prospective tenants in receipt of benefits or with children
1. The Bill shall ban advertisements for rental with ‘No DSS’ for example.
End the practice of Rental Bidding
1. Landlords and agents will now be required to publish an asking rent for the property. The Bill will prohibit landlords or agents from accepting or asking for offers made above this rate.
Strengthen Local Authority Enforcement
1. Local councils will be able to issue civil penalties against landlords that fail to comply with new reforms (e.g. register on the Private Rented Sector Database).
2. Local council will also be granted enhanced investigatory powers, to obtain financial information from landlords and third parties and further, councils will be able to issue civil penalties against landlords who evict their tenants illegally. It is expected that a national framework for civil penalties for landlords’ non-compliance will also be published.
Strengthen Rent repayment orders
1. Rent repayment orders will apply to new offences in the Bill and can be made by the First-tier Tribunal on application by the landlord or local council. This is effectively an order for a landlord who has committed an offence to repay an amount of rent to the tenant or local authority.
2. Rent repayment orders will be extended to superior landlords under the Bill. The maximum penalty will be doubled, and any repeat offenders will have to repay the maximum amount.

How Landlords can prepare for the implementation of the Bill

Continued compliance with the prescribed legal requirements.

Under the Housing Act 1996, Landlords are required to provide specific documentation to tenants with Assured Shorthold Tenancies. Namely, a valid energy performance certificate to the tenant(s), free of charge, prior to their occupation of the property. In addition to a valid gas safety, prior to the tenant(s) occupation of the property and a copy of the annual gas safety certificate during the duration of the tenancy following each inspection.

Under the Prescribed Requirements Regulation 2015, Landlords are also required to serve their tenant(s) with a copy of the most up-to-date version of the “How to rent: the checklist for renting in England”. This requirement is only applicable to any assured shorthold tenancy post 1^st October 2015, however, it is recommended for the Guide to be served on the tenant(s) nonetheless, as a belt and braces approach. The How to Rent Guide must be provided to the tenant in hard copy, unless the tenant has expressly agreed to receive a copy by email. Landlords are not required to supply a further copy of the Guide each time a new version is published during the tenancy, only if a tenancy is renewed and the Guide has been updated.

Whilst the Bill intends to change the necessity for the above documents, it is essential that Landlords ensure all required documents have been validly served on their tenant(s) in the meantime.

Continued compliance with deposit protection requirements.

For Landlords intending to take a deposit from a tenant, upon entering into a tenancy agreement, the Housing Act 2004 requires the Landlord to register the tenant’s deposit within an authorised scheme within 30 days of receipt. The Landlord is further required to provide the tenant with the ‘Prescribed Information’, within 30 days of the deposit being paid. Failure to do so, could result in severe consequences for the Landlord.

The Bill does not contain any proposals for amendment to the existing regulations and landlords should ensure they continue to comply with these requirements.

How BTMK can help

It is important that landlords thinking of regaining possession of their property, continue to comply with the existing prescribed legal requirement and deposit regulations. Until the Bill is implemented it is still possible to regain possession under the current s.21 and s.8 routes. Which is something the team at BTMK are more than happy to assist you with.

If you are a Landlord and wish to obtain advice on regaining possession and the proposed changes to possession procedures, please do not hesitate to contact BTMK’s Litigation and Dispute Resolution Department for expert guidance and sound legal advice. BTMK has 24/7 phone lines and online chat facilities, and our team are able to assist with all urgent matters, with a varied team of Directors, Solicitors, Paralegals, Trainee Solicitors and Apprentice Solicitors.

BTMK’s current fixed fee possession scheme listing our fees for each stage up to and including obtaining possession of your Property (under the current possession procedures) can be accessed here: https://www.btmksolicitors.co.uk/personal-law/landlord-and-tenant/fixed-fee-posession/

Once the Bill is in its final form and becomes legally binding, we shall prepare an updated fixed fee possession scheme considering the changes to possession procedures, however Landlords are invited to review our current fixed fee scheme to take steps to regain possession of their Property in the interim. As noted above, the Bill proposes significant, wide ranging changes for landlords in the private rental sector. Landlords will not be able to regain possession of their property unless there is a prescribed reason. Further, grounds for possession on the basis of rent arrears will not be available until a tenant is in at least 3 months’ arrears. The length of the requisite s.8 notice in those circumstances will be extended to 4 weeks. Landlords in difficulty would be well advised to consider their position and circumstances before the Bill is implemented.

Article written by Rachel Gleeson (Graduate Solicitor Apprentice) in the Civil Litigation and Dispute Resolution Department. Rachel can be contacted on 01268 204262 or [email protected] in the first instance to discuss your available options.