The Renters’ Rights Bill has now received Royal Assent, heralding the biggest changes the sector has seen in generations.
After more than a year in the making, the Renters’ Rights Bill has now become an Act of Parliament and moved into law.
Of course, the question on everyone’s lips now is what happens next?
What we do know for sure is that, now that the Bill has become an Act, its provisions for landlords in England and Wales cannot change, so the period of debate is over.
However, for now at least, it is business as usual, with the Government set to announce its implementation timeline and the dates on which parts of the Act will come into force during the days or weeks ahead.
What is changing?
The new Act will introduce:
- A new standard tenancy for private renting.
- A Decent Homes Standard and new rules on responding to hazards.
- Changes to advertising and letting practices.
- Limits on when and how much rent can be taken in advance.
- The removal of Section 21 notices for possession.
- Changes to Section 8 grounds for possession.
- Changes to rent increases.
- A new private rented sector database and Ombudsman that landlords must sign up to.
- New offences and civil penalties for landlords who don’t comply with these rules.
What will happen first?
Some new local authority enforcement powers will be available in two months’ time. But in terms of major reforms, the first will relate to tenancy changes. When the Act comes into force, on its ‘commencement date’, these will include:
- The abolition of Section 21 and the introduction of new Section 8 possession grounds.
- Both new and existing tenancies become periodic by default in most cases (otherwise known as the loss of the fixed term).
- The new requirement to provide a written tenancy agreement.
- Bans on taking rent in advance and allowing rental bidding wars.
- Changes to rent increases.
When will this happen?
So far, ministers have been tight-lipped as to exactly when we can expect this to happen. However, Housing Minister Matthew Pennycook, is on record saying landlords and tenants will be given ‘sufficient notice’.
What do I need to do?
The best way to get ready is to ensure you are meeting all your obligations and that all your documentation is up to date and accessible, inspect your properties and review your tenant referencing practices. If you use an agent, you should also check they are ready.
Existing tenancies
Remember, if you have an existing assured shorthold tenancy (AST), this will automatically convert to a periodic tenancy, you do not need to sign new documents.
However, there are things you will need to do:
All landlords will need to issue information about the new rules for existing changes within the first month of the commencement date. Much like the ‘How to Rent’ guide, we expect the Government will make a document available on the GOV.UK website.
If you don’t have a written tenancy agreement you will need to provide one.
Student landlords will also need to make sure they inform tenants within the first month if they want to use the student possession ground, to ensure they can get their properties back at the end of the academic year.
If you have an unexpired Section 21 (or Section 8 notice under former grounds) you should also be aware it will only be valid for a possession claim in the first three months.
New tenancies
All new tenancies will require updated tenancy agreements and related documents once the Government has confirmed what will need to be included in this documentation.
Which parts of the Act will come in later and why?
- The introduction of a new landlord ombudsman.
- The development of a private rented sector (PRS) database including landlords’ details.
- The extension of a Decent Homes Standard into the PRS. The proposed deadline for full introduction is currently 2036, however, the requirement for the property to be free of category 1 hazards (the most dangerous) may come much earlier.
- The introduction of Awaab’s Law, regarding treatment of damp and mould – with a consultation on proposals expected soon.
- All landlords will have to sign up to the database and the ombudsman when required – although, again, at present there is no detail as to when these will be introduced.
New enforcement powers for local authorities
One thing we do know for sure is that some of the new enforcement powers given to local authorities will come into force two months from now, as this date is written into the legislation itself.
From then, local authorities will also be able to demand documentary evidence to prove compliance and will have the power to enter business premises or rented residential accommodation without a warrant in certain cases.
Other new rules coming in because of the Act include:
- The introduction of 15 new offences that can see landlords issued with civil penalties.
- An increase in the maximum civil penalty fine that can be imposed of up to £40,000.
- The introduction of six new offences that can result in landlords facing a rent repayment order.
- An increase in the maximum claim period for such orders, with tenants now able to claim back up to two years of rent payments for breaches.
- As councils will be in breach of the law if they fail to enforce the new rules, it is likely private rented housing will be a high priority for enforcement teams across England and Wales. It is more important than ever that you are on top of all your legal obligations and have the documents to prove it.
Intus Lettings is here to support both landlords and tenants with the changes introduced by the Renters’ Rights Act. Please feel free to contact us if you have any questions.
