Welcome to another Newsround, where this week we have had the most significant and long awaited news for landlords in a long time with the Renters’ Rights Bill finally being published by our new government.

Let’s start our Newsround this week by taking a look at what it means for landlords.

New Renters’ Rights Bill

The new Renters Rights Bill was published on Wednesday with its first reading in parliament, and it has been stated that the new rules could become law as soon as next summer 2025.

Some of the main changes are:-

• End of fixed term tenancies – all tenancies to be monthly periodic with the right for tenants to end them on 2 months’ notice to quit
• End of Section 21, no-fault eviction, to apply to both new and existing tenancies at once, probably as soon as the act becomes law
• A ban on discrimination against tenants on benefits, those with children, and the right to request a pet
• Awaab’s Law to be extended into the private rented sector, applying the decent homes standard for all rental properties
• Rent increases will only be allowed once a year using the statutory notice procedure
• Facility for tenants to challenge rent increases if they are above the market rent
• A new ombudsman service to provide fair and binding resolution to both landlords and tenants
• A digital private rented sector database holding information for landlords, tenants and councils
• End of ‘bidding wars’ when viewing and applying for a rental property
• Local authorities will have greater powers to enter PRS properties and the financial penalties for non-compliance will increase considerably

This bill applies in the main, only to England, and the changes will apply to both new and existing tenancies. Tenants will also be able to give notice from day one of the tenancy.

There is a new possession ground for landlords wanting to sell or use the property for themselves or their family, but this cannot be used within the first 12 months of the tenancy and the landlord will have to give 4 months notice. The mandatory rent arrears ground will require 3 months arrears and 4 weeks notice.

Angela Rayner, the Housing Secretary said of the Bill

Most landlords act in a responsible way but a small number of unscrupulous ones are tarnishing the reputation of the whole sector by making the most of the housing crisis and forcing tenants into bidding wars

There can be no more dither and delay. We must overhaul renting and rebalance the relationship between tenant and landlord. This Bill will do just that and tenants can be reassured this Government will protect them

You can read the full guidance to the Renters’ Rights Bill on the government website here.

Tessa’s preliminary comments are here.

Section 21 abolishment and what it means to the court system

With the ban of section 21 now looming there is the ongoing concern that the court system will not be able cope with the existing the backlog coupled with and now expected ‘surge’ of section 21 notices being served before the new bill comes into force next year.

Sarah Taylor of Excello Law, a property dispute resolution partner said

The risk to both tenants and landlords is the existing backlogs in the Court system. Trying to obtain possession orders will be protracted, causing uncertainty and delays for both landlords and tenants.

This was a concern of the previous government who had delayed implementing their Renters Reform Bill for this precise reason. Scott Goldstein a property disputes specialist said

The county court system is completely broken. It now takes many weeks to process claims. We must hope that the government invests in the courts to cope with the expected influx in new claims.

However, if the procedure rules are changed (as I understand may be being considered) to allow more paper only procedures with hearings only taking place if a defence is filed, this could help  process claims more quickly.

Council clamps down on derelict homes

Middlesborough council is clamping down on empty derelict properties that they claim has worsened in the last few years, many are insecure which is encouraging anti-social behaviour.

They have 2,231 empty properties in Middlesborough 1,233 of which have been empty for more than six months. These properties alone carry an outstanding council tax bill of £5.5 million.

The council has launched a ‘combined push’ to contact landlords where they can, reminding them of their responsibilities to tackle the empty properties, and they are now even compulsory purchasing and taking legal action. Where properties pose health hazards they are forcing the sale of them.

Richard Horniman, regeneration director on the council hopes that this will help to return the properties back to use.

Government considering support for landlords with low EPC ratings

Propertymark has been lobbying the government for a long time now asking that they support landlords with grants to enable them to better their rental properties with EPC ratings that are below a C. They have recently written again to Ed Milliband, the Energy Secretary, calling for help again.

And now Ed Miliband has confirmed that the government will consider support and incentives for private landlords.

Tim Thomas of Propertymark has said

Clarity from the UK Government on new energy efficiency targets is vitality important and there must be sufficient financial and practical support to help landlords meet the legislation and contribute towards net zero targets 2050.

He also said that without any help for landlords then the governments target of all rental properties being an EPC C or higher will never happen by the deadline of 2030.

Snippets

Landlords urged to check council’s licensing requirements
Rats. mould, damp: UK’s biggest student homes provider faces legal action over poor accommodation
Landlords warn they may raise rents in response to Labour’s renters’ rights bill
Calls grow for short-let licensing to rebalance PRS
Suspended jail term for landlord who ignored safety checks
Co-living homes could ‘transform’ the Square Mile
Britain’s biggest landlord WELCOMES the Renters Rights Bill

See also our Quick News Updates on Landlord Law

Newsround will be back again next week

The post Landlord Law Newsround #356 appeared first on The Landlord Law Blog.

The Renters Reform Bill is no more. Arise the Renters Rights Bill! It is very similar in many ways but more tenant-friendly.

However, from what I have seen so far, I don’t think it is a bad bill for landlords. So long as you comply with all your legal obligations (my Landlord Law service can help with that) and take care with your choice of tenants, you should be fine.

Bearing in mind that whatever legal regime is in place it is not going to prevent all issues.

The people who should be worried are the rogue landlords.  Hopefully, their time for ignoring tenants’ rights and regulations with impunity is drawing to a close.

This is good news for the good landlords as it will finally create a level playing field.  You will not find yourself paying for compliance while the rogues ‘get away with it’.

Three preliminary tips

My advice in my post of a few months ago still stands. But these were my preliminary thoughts on first looking at the bill.

1. If you want to use section 21 use it now.

You are in the last chance saloon for section 21 evictions. The government hope to get the bill passed and active before the summer of 2025.

If you have a bad or anti-social tenant you want to evict, then section 21 will be a much easier process.  But you should start NOW.

I would also advise you to use solicitors. Specialist solicitors who specialise in landlord and tenant work and possession proceedings. Landlord Action, for example, would be a good choice, but there are others.

We have a short free guide on using solicitors, which may help. Landlord Law members can use our special forms to instruct our recommended firms at fixed fees.

2. Do not enter into a ‘rent to rent’ arrangement

This is where you rent your property to a tenant, not for that tenant to live in, but to sublet to others.

The Renters Rights Bill is going to reverse the decision in the case of Rakusen v.Jepson.  In this case, tenants applied for a rent repayment order in the First Tier Tribunal, claiming the penalty as their landlord had not obtained an HMO license.  The case was subsequently appealed all the way up to the Supreme Court.  The Court held that rent repayment orders can only be made against the immediate landlord and not the owner of the property.

However, many rogue landlords use ‘rent to rent’ arrangements to let to a company with no assets specifically so if tenants bring a claim they will not get paid.  This is why the government is reversing the Rakusen decision.

What this means is that if your tenant does something which entitles the subtenants to apply for a rent repayment order, YOU could be liable.

Even though you may have known nothing about what your tenant is doing and have not received any rent. The new bill is also set to increase the penalty that tenants can claim to up to 2 years’ worth of rent.

If you are in a rent-to-rent arrangement after this bill becomes law, you are at risk of being fined large amounts of money for something you know nothing about. Don’t risk it. Use a decent agent instead.

I would also suggest you try to extricate yourself from any rent-to-rent arrangements you may have at the moment, before this bill becomes law.

3. Get into the habit of regular rent increases

In my previous post, I suggested that you get your rent up to a market rent. I know that so far as the press is concerned, all landlords are ‘greedy’ individuals who will jack the rent up to as high as they can.

That may be true for some. However I know there are many landlords who have not increased the rent for years and may be finding it hard to make a profit. If this is you, you need to get your rent up to the market rent.

If large number of landlords are charging a lower rent, that will then be deemed the market rent which the Tribunal will then set when tenants challenge rent increases. So make sure you are charging sufficient to cover your expenses and make a modest profit.

However, after you have brought your rent up to a market renr, it is essential that you get into the habit of increasing rent regularly. Small regular increases are much easier for tenants to cope with and will allow landlords to keep up with inflation.

The new act will only permit one method of rent increase, the statutory notice procedure, and you will only be able to use it once a year. So make sure you do this.

And finally

To summarise –

• If you want to use s21 you have a very limited time. So if you have an anti-social tenant, now is probably the best time. But use solicitors as if you make a mistake now, you may not get a second chance.
• Don’t enter into any rent-to-rent arrangements – once the act is in force, you could find yourself being fined large sums of money for something which is not your fault and which you knew nothing about
• Get your rent up to a market rent level and make sure that from now on, you do regular small annual rent increases.

I will be writing more about these issues in due course when I have studied the new act further.

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