The Renters’ Rights Bill

The Renters’ Rights Bill was introduced to Parliament for the first reading on 11^th September 2024 which proposes radical changes to the UK rental market.

It is currently in its primitive stages and still has a long way to go before coming into force. We anticipate amendments to be made as the Bill passes between Commons and Lords, but it is extremely likely that what we have considered above will form part of the final bill.

At first glance, the Bill will stand to revolutionise the housing market in England and Wales as we currently know it and landlords must act quickly to ensure that they are prepared for what is to come.

Among the key amendments highlighted by the new Government in the White Paper are:

1. The abolition of Section 21 of the Housing Act 1988;
2. The broadening of “Awaab’s Law” to the private rented sector;
3. Introduction of a Private Rented Sector database and Landlord Ombudsman; and
4. An appeal process for tenants who are subject to excessive above market rents.

1. Abolition of Section 21 of the Housing Act 1988/ “No fault” evictions

The Section 21 eviction known as the “no fault” eviction will be revoked, meaning that landlords will no longer be able to evict tenants without proving specific mandatory or discretionary grounds.

2. “Awaab’s Law” and the impact assessment

Awaab Ishak, a 2-year-old toddler, died on 21 December 2020 as a result of a severe respiratory condition which was caused by prolonged exposure to mould at a flat rented by his parents. The damp and mould at the property had been reported by his parents to the landlord as far back as 2017 onwards.

The aim of “Awaab’s Law” is to elevate living standards within the private rented sector, ensuring homes are safe.  This proposal has been generally well received, but it will come at the cost of the landlord. The recently released guide to the Renters’ Rights Bill indicates “[i]f landlords do not comply, tenants will be able to bring enforcement action against them through the courts”.

The umbrella of enforcement action is wide, permitting the service of notices/orders such as Financial Penalty Notices (FPN) for sums of tens of thousands of pounds to criminal prosecution against landlords.

3. The Private Rented Sector (“PSR”) database and Landlord Ombudsman

The introduction of a PRS Landlord Ombudsman will mean that tenants who have complaints about their property/landlord will have an extra avenue of recourse.

The powers of the Ombudsman are varied, spanning from requiring landlords to issue apologies, provide information that is requested by the Ombudsman, or compelling remediation action with capacity to issue pecuniary compensation in certain situations.

Overall, the implementation of this scheme should hold landlords to greater account, compelling all landlords to join the scheme. This has a membership fee.

4. Appeal mechanism against excessive rents

The Bill will prohibit landlords from increasing rents excessively and preventing the increase of rents mid-tenancy. One rent increase per annum at a “market rent” is permitted and any “excessive rents” can be challenged by tenants via appeal to the First-tier Tribunal who will determine the “market rent” by assessment. Therefore, it will be essential for landlords to adopt a strategic view when revising rents in future. The Government’s guide indicated that this is to prevent landlords implementing high rents “purely designed to force [tenants] out”.

If you are a landlord or tenant and have any questions or would like advice on this topic, please feel free to contact our dispute resolution team on 0161 832 3434.