The Renters’ Rights Bill explained

When the Renters’ Rights Bill 2024 was introduced to Parliament, we wrote about the highlights. Here, we offer further analysis of the bill and what the CLA will be lobbying for as this legislation progresses through Parliament.

As with the Renters (Reform) Bill 2023, which was introduced by the last Conservative government, this bill will repeal section 21, also known as the notice-only or “no-fault” eviction ground and instead require landlords to rely on new and improved grounds under section 8.

Grounds under section 8 can be either mandatory or discretionary. For mandatory grounds, judges must award possession when a landlord can evidence the ground is met. Discretionary grounds allow a judge to consider whether it is reasonable to award possession, even where the ground is met.

The CLA has been working hard since 2019 to ensure that the new and amended grounds for possession under section 8 work effectively in a rural context. Examples of successful lobbying on behalf of members in this bill include:

• A new ground for possession where the property is required for an incoming agricultural worker.
• The “employers’ ground” which ensures possession is granted when an employment contract ends, has been strengthened by making it mandatory.
• An equivalent of the existing “form 9” notice, which allows landlords to contract out of security of tenure when housing an agricultural worker, and thus preserve the right to repossess the property when the job is over
• Additional grounds are available specifically to landlords and tenants of agricultural tenancies where the superior lease ends and/or where the superior landlord becomes the tenant’s direct landlord.

However, we believe these new and amended grounds do not go far enough to meet the needs of rural landlords – many of whom have to supply accommodation for their employees. We were making good progress before the general election, so we are in a good position to continue to lobby for the following changes to be added to the bill as it progresses:

• Under the new ground for incoming agricultural workers, we would like to see this amended to allow repossession for a wider range of employees, for example those in hospitality. This would reflect the needs of the 85% of businesses that have nothing to do with farming or forestry.
• A new ground – “Persistent refusal by the tenant to allow the landlord (or their agents) access for statutory inspections (e.g. gas and electrical safety) and related compliance works”.
• A new ground – “The property is required to house an outgoing agricultural worker that the landlord has a statutory duty to house and who is being moved to suitable alternative accommodation”.

The bill abolishes Assured Shorthold Tenancies (ASTs) and fixed term tenancies. The majority of tenancies will therefore be fully assured, and, over time, all assured tenancies will be periodic, i.e. run from month to month. There will be no minimum or maximum term.

These new tenancies can be ended by the tenant at any time by giving two months’ notice and by the landlord where they have one or more grounds for possession which generally require four months’ notice.

All rent will be payable monthly and can be raised annually to market levels provided the section 13 procedure and forms are used. Tenants will have the right to challenge rent increases in the First Tier Tribunal

As requested by the CLA, fixed term tenancies of more than seven years will fall outside of the new assured tenancy regime altogether. These will be contractual tenancies (i.e. not governed by the new statutory regime) so will be governed by their own terms and relevant common law rules. Importantly, this means that landlords who grant tenancies for a fixed term of more than seven years could still contract out of the repairing obligations set out in other legislation.

What is concerning about the new bill is the lack of detail on the implementation timeframe, particularly the lack of detail on when section 21 will cease to be an option for members seeking repossession. The previous government had inserted into the Renters (Reform) Bill a provision that said that section 21 would continue to be an option until a review of the courts had been published.

Since 2010, 74 county courts have closed in England and Wales, which has vastly increased workloads. Covid-19 made this worse, as evictions were paused and courts unable to hold hearings - creating a significant backlog. Landlords and tenants in rural areas are further impacted by fewer county courts, as they may have to travel further to attend court.

The benefit of section 21 is that it is the “paper-based” route and therefore, in most cases, does not require a court hearing. The CLA will continue to argue that would be sensible for the proposed mandatory section 8 grounds to also be “paper-based”. This would avoid overloading the courts with cases, and at the same time would reduce time taken for landlords and tenants to reach a resolution.

As with the Renters (Reform) Bill, this bill states that landlords must consider and may not “unreasonably withhold consent” after a tenant’s request to keep a pet. To balance this, landlords may make it a condition that the tenant obtain pet insurance against damage, or they may recharge the tenant for increased insurance costs borne by the landlord due to a pet being kept at the property. A CLA member has asked whether landlords may specify that the tenant must pay for the insurance premium annually, and we will seek clarification on this. We will also work to influence the guidance of what reasonable reasons to refuse may be.

The bill will make it illegal for landlords and agents to discriminate against prospective tenants in receipt of benefits or with children.

This will be introduced to the PRS at some stage but will first be subject to a consultation process

As with the previous bill, a database of all assured (and Rent Act) landlords and their properties is to be introduced by secondary legislation and they will be required to join the ombudsman scheme once it is set up – for which fees will be payable.

A completely new introduction to this bill, but one which was expected, is the extension of ‘Awaab’s Law’ to the PRS. This law is a recent introduction to the social sector which sets clear legal expectations about the timeframes in which landlords must make homes safe where they contain serious hazards, such as damp and mould. The bill also allows for this law to be applied to accommodation which is occupied under licence – this would include service occupancy agreements, and potentially other types of short-term lets.

The bill prohibits ‘rental bidding’ which is the practice of inviting, encouraging or accepting a higher rent when letting a property. Landlords and letting agents will be required to publish an asking rent for the property, they will then be prohibited inviting, encouraging or accepting a rent above this price

Local authority enforcement is to be strengthened by expanding civil penalties, introducing a package of investigatory powers and bringing in a new requirement for local authorities to report on enforcement activity.

The potential for rent repayment orders is also to be extended to superior landlords, doubling the maximum penalty and ensuring repeat offenders have to repay the maximum amount.

This bill is much the same as the bill the CLA was working on prior to the general election so we are well placed to continue our lobbying and influence government thinking. The new provisions related to Awaab’s Law may cause concern for members, but we will work hard to make sure they are fit for purpose in a rural context. Additionally, we will work hard to make sure that the commencement date for the legislation to apply to new and existing tenancies allows landlords, and importantly the courts, enough time to prepare.

As always, case studies and data are some of our most effective lobbying tools, so please do share with us. Specifically, we are interested in:

• Unique/uncommon or rurally specific examples of reasons you have needed possession of a property, for which you used section 21
• Average time for repossession when you have needed to go through a court process.