I watched the debate for the second reading of the Renters Rights Bill yesterday (9 October), and again today while drafting this post, which was a bit of a marathon.

Here are the main points.

Opening speeches

The debate started with speeches from Anglea Rayner (for the government) and Kemi Badenoch (for the opposition).

Angela Rayner’s speech was as expected. It was all about protecting tenants (which is important), although she accepts that most landlords are good landlords.

Kemi Badenoch was surprisingly hostile towards the bill, bearing in mind that it is very similar in many respects to the Conservatives Renters Reform Bill for which she voted.

She claimed this was because it had become apparent that the Conservative bill was flawed and would have negative effects, mainly that it would cause landlords to sell up and leave the sector. This, she told us, was why their bill had not been progressed.

The current bill would not (she claimed) reform the rental market but break it. If property rights are not respected, this will damage investment, which in turn would hit growth.

She also pointed out that no impact assessment had been published and that the bill created a risk of gridlock in the justice system if introduced before the courts were ready.

Although she made a number of good points, I have to say that I found her speech to be somewhat disjointed and jerky – maybe her attention was focused more on other matters?

Members speeches

We then had a large number of speeches from the floor of the house.

There were many stories about the hardship caused by Section 21 evictions, and practically everyone praised the bill for removing them. Housing is, it seems, one of the top issues raised by constituents with their MPs.

Most of the speeches were of the view that the bill would be universally beneficial, with just a few opposition MPs raising the issue of landlords fleeing the sector.

One point made by many MPs was the high upfront payments needed to be made by tenants at the start of a tenancy. My understanding was that the bill would cap upfront rent payments to one month’s worth of rent but I can’t find any clause in the bill where it says this.

If I have missed the clause, please leave a comment letting me know where it is! Otherwise no doubt this is something which will be dealt with at the committee stage.

Other points made in the Labour Party member’s speeches, included:

• The huge increase in the private rented sector over the past 20 years or so
• The huge and unaffordable rent increases that take place – with many calling for rent caps
• That the huge rents charged make it impossible for many to save, for example, to buy their own property or to afford to rent in their preferred location
• The importance of pets in families and the distress when they have to be given up due to landlords forbidding pets
• Unacceptable conditions in rented housing, in particular, damp and mould which tenants are often afraid to complain about due to the threat of eviction, and
• Praise for the extension of Awaabs law to the PRS
• Funding problems for councils which may make it hard for them to enforce standards
• The cost of rehousing those in priority need and
• The problems when families are rehoused a long way away, meaning children have to change schools, parents can lose their jobs, plus there is evidence that babies have died
• That housing problems will only really be resolved by building many new properties, in particular, new social housing
• That tenants need to be made aware of their rights and that legal aid should be extended to support them
• The problems for our country if students are unable to find accommodation and
• The problems for and cost to the National Health Service from illness brought about by poor accommodation
• That the new landlord database could be used to record rents, making things easier for the Tribunal if rents are challenged and
• It could include further information about properties such as accessibility, past enforcement action and evictions, basic safety information, the rent charged and landlord and agent contact details
• The security of your home should not depend on who owns it
• The proposed new ombudsman service should be accountable to Parliament and information should be shared with other relevant organisations
• The need for remaining no-fault eviction grounds to exempt tenants from paying their last two months rent to cover the cost of removal
• That provision should be made to support care leavers
• Concern that the possession ground for landlords looking to sell should not be abused
• The cost to local authorities and society of the disruption caused by the need for temporary accommodation
• The negative effect on tenants’ credit rating if they are constantly having to move
• And, of course, from a Welsh member, that the long-term security and other benefits for tenants have already been granted to those in Wales!

Some MPs also mentioned their own problems when section 21 notices had been served on them.

MP Helen Hayes referred to her proposed amendment that the bill provide that guarantors of deceased tenants should not be liable, following a tragic case where parent guarantors were pursued for unpaid rent by their son’s landlord after his (the son’s) death by suicide.

Some of the points made by opposition parties included

• Most landlords are good and are fundamental for the housing supply and should not be dissuaded.
• We need to be aware of unintended consequences
• Costs of regulation will be passed on to tenants
• The bill will not be relevant if landlords leave the sector
• Councils must be given powers to regulate Airbnbs
• There is no time for delay for energy efficiency
• ‘Affordable rents’ should actually be affordable and there is a need for mass house building, which should be affordable housing rather than luxury flats.
• The legislation permitting pets should be extended to social housing

There were actually very few speeches from Conservative MPs whose benches were mostly empty.

Strangely the only MP who mentioned the right-to-rent rules which encourage discrimination was the Independent MP Apsana Begum.

There were many more points made by MPs – I can’t mention them all but hopefully, those listed above will give a flavour of the debate.

Closing speeches

These were delivered by the junior ministers, the speech for the Conservatives being given by David Simmonds.

He pointed out that in the recent rented housing survey, private tenants are the most satisfied of any tenure. And that we should not forget this. It was pointed out that there have been problems in Scotland where the reforms there have not worked.

This legislation will have a huge impact on all types of housing, and it is important that we get the bill right. For example, the two-month notice period could cause many student landlords to withdraw from that sector.

There will be a high degree of cross-party support for the bill, but they (ie the Conservatives) are concerned about encouraging supply to the private sector. They are also worried about over-regulation and unintended consequences.

Finally, there was a reference to the lack of an impact assessment.

Matthew Pennycooks summing up

He started by saying that the case for fundamental reform of the PRS and the need to drive up standards is watertight.

The government believe the bill strikes the right balance between the interests of landlords and tenants although it may take some time for the sector to adjust to the change in regulation.

The commencement date will be the same for existing tenancies and new tenancies and will be announced by regulation. They intend to give the sector as much notice as possible.

They believe that the end of fixed-term tenancies is the right way to go and will allow tenants the flexibility to leave poor standard housing without being forced to pay rent for the remainder of the term.

Pennycook denied that the sector will become ‘Airbnb-lite’ as tenants will have to provide 5 5-week deposit, be referenced and give two months’ notice.

So far as the impact on the courts is concerned, most tenancies end by agreement. They are working with Ministry of Justice colleagues to ensure that improvements are made and are also working to develop alternative dispute resolution solutions. So, only those cases which need a judgement go to court.

They are looking for the new court system to be ready in time.

The legislation will target the poor landlords, who bring the whole sector into disrepute, and good landlords should welcome this.

They will be consulting on the content of the decent homes standard for both social and private housing and on how Awaabs law will be extended ‘given the obvious differences between the private and social rented sectors’.

Separate rules will apply to MOD accommodation.

He confirmed that they will not be imposing rent control which they believe could make things more difficult for tenants. Instead, they are introducing measures to help tenants, for example, to allow tenants to challenge rent increases so they cannot be used as a ‘back door’ route to eviction.

The tribunal will have an important role to play in assessing whether rent is reasonable or not, and they want more tenants to use this process.

So far as worries about rent in advance is concerned, he will be keeping this matter under review.

The Ombudsman and database are fundamental to the reforms and they want them to be operational as soon as possible. The database, in particular, could be a game changer. The details will come in secondary legislation.

No final decision has been made about the organisation to run the Ombudsman service, but the government is of the view that the Housing Ombudsman is best placed to take on this role as it will allow a streamlined cross-tenure redress service.

As regards student accommodation, he appreciates that this an area where judgements are finely balanced and he ‘looks forward to future discussions’ as the bill progresses.

Enforcement of the measures in the bill will, he agreed, cause ‘resourcing challenges’ for local authorities. They believe the civil penalties will help fund enforcement, but he confirmed that additional burdens on Councils will be fully funded.

He finished by confirming that the bill would be progressed as soon as possible.

And finally

The MPs then trotted off to the lobby where the bill passed its second reading.

It will now move to the Committee Stage on a date yet to be announced.

You can find the rest of our posts on the bill here.

The post The Renters Rights Bill – report on the second reading appeared first on The Landlord Law Blog.

About Notices to Quit

A Notice to Quit is a notice served either by a landlord or a tenant to end a tenancy.  It is, however, a specific type of notice, so you should not use this term for section 8 or section 21 notices, which are different.

Landlords’ Notices to Quit are forbidden for assured and assured shorthold tenancies in England under s5 of the Housing Act 1988 and for Welsh Occupation Contracts under s232 of the Renting Homes (Wales) Act 2016. They are now mostly used for common law tenancies.

Tenant’s Notices to Quit, though, are allowed – this is the name for the notice served by tenants when they want to end their tenancy.

Note – this post is primarily about English law, but I will be using some examples from the new Welsh legislation.

The rules that govern tenants’ Notices to Quit are mostly common law rules. This often confuses tenants who demand to know where they can find them written down in legislation. The nearest they get to this (at the moment) is the Protection from Eviction Act 1977, which provides that:

• The notice must be in writing, and
• It must give not less than 4 weeks’ notice

Tenants can only use a Notice to Quit to end a periodic tenancy. They cannot end a fixed term by Notice to Quit or at all unless the landlord agrees.

However, once the Renters Rights Bill becomes law, it is anticipated that ALL tenancies will be periodic as the act is due to ban fixed terms.  For assured tenancies anyway, which will become the main tenancy type in England.

What does the Renters Rights Bill say about Notices to Quit?

The main two clauses are s19 and s20.

Section 19 amends the Protection from Eviction Act 1977 by saying that tenants Notices to Quit for assured tenancies must give not less than two months’ notice, ending at the end of a ‘period of the tenancy’. Changing the current minimum 28-day notice period in the Protection from Eviction Act.

Section 20 says that landlords cannot specify the form a tenant’s notice to quit must take, and also allows for the notice to be withdrawn if the landlord and tenant agree in writing.

So this clears up a few of the questions people have about tenant notices. However there are still a few things which could usefully be clarified.

The effect of a Notice to Quit served by one of joint tenants

Under the current law, a notice to quit served by one of joint tenants ends the tenancy for everyone (even if the other tenants did not know about it). So, if the remaining tenants want to stay, they will have to reach a new agreement with the landlords.

Although, under s54(2) of the Law of Property Act 1925 (which provides that tenancies with a term of less than 3 years can be created without a written deed) a tenancy will be created automatically if they pay rent which the landlord accepts.

However, if a replacement tenant moves in, the landlord will (if he is sensible) need to issue a new tenancy agreement and deal with deposit issues (assuming there is a deposit).

In Wales, the new legislation provides that one of joint contract holders can leave without ending the contract for the other contract holders, and prescribed forms are available for this situation.

The remaining contract holders also have the right to add a new contract holder, which the landlord can only object to on ‘reasonable grounds’.

It would be good if the English legislation could deal with this issue so people have clarity.

Tenants failing to move out after serving a Notice to Quit

This can be extremely annoying for landlords. Often, they will have lined up new tenants and maybe also tradespeople to go in and do inspections and repair work believing the property will be empty when the tenants vacate.

If the tenants then don’t vacate, this will

• Cause enormous inconvenience to the new tenants who will be preparing to move into what they believe will be their new home, and
• Make the landlord liable for callout charges from tradespeople who will no longer get access.

Tenants failing to honour their notice to quit has the following potential consequences in English law;

• The landlord can bring proceedings for possession based on the fact that the tenancy has ended and the tenant has not moved out
• The Distress for Rent Act 1737 provides that landlords can charge double rent.

However, neither of these remedies are well known. I understand that social landlords will sometimes bring proceedings based on a tenant’s notice to quit, but it is not something that is often done in the private sector.

Again, the Welsh legislation covers this. There is a prescribed form that the landlord can serve, after which he can issue proceedings from the following day to up to six months later.

It would be good if the Renters Rights Act could include some provision for this situation to provide clarity for landlords and tenants.

And finally

The Renters Rights Act, at the time of writing, is due to have its second reading and is expected to pass fairly swiftly through the parliamentary process, becoming law some time in the first half of 2025.

Unlike the Welsh legislation, this is not a completely new code.  The changes are being done by way of amendments to existing legislation, mainly the Housing Act 1988.

It would be good if provision could be made for these two situations so landlords and tenants have clarity.  Providing prescribed forms for these situations will also help all parties know where they stand.

The post The Renters Rights Bill and two issues that need clarifying on tenants Notices to Quit appeared first on The Landlord Law Blog.