Renters Rights Bill (RRB) – Is This It?
Renters Rights Bill (RRB) – Is This It?
Many of you will know that I stopped talking about the Renters Reform Bill (first introduced to Parliament in 2019), last year, because there was never any sign of an implementation date under the Tories. My reluctance has now diminished, as Labour has a definite and fast-moving time frame for their RRB to become law. Whilst a lot of the major points are similar to the original Reform Bill, there have been numerous tweaks and additions that landlords need to understand.
Deputy Prime Minister and Secretary of State for Housing, Angela Rayner said:
“Through our Plan for Change we are tackling the housing crisis head on, delivering the biggest boost in social and affordable housing in a generation…..For far too long working people and families have been at the mercy of a fickle and unfair rental market, faced with outrageous upfront costs, and struggling to find a safe and secure place they can truly call home.”
There are a huge number of unknowns and nuances that are still undefined, which will need clarifying before it is possible to be more definite in all aspects of the proposed Bill. The Government still needs to issue full explanatory guidelines, so the sector will be able to have a clearer understanding of what is expected. In addition, the courts will over time give greater clarity on some of the uncertainties that will potentially be created by the RRB.
What is clear is that this Bill is going to transform the face of the PRS (Private Rental Sector) from the one that everyone has become used to, over the last 35 years (it changed back in 1988 under the Housing Act, when ASTs and Section 21 notices were introduced). Private landlords will need to have a very good understanding of what is implied and what is involved for both them and their tenants, as non-compliance could lead to some severe financial penalties or worse!
One thing is certain, Section 21 and ASTs (Assured Shorthold Tenancies) will become illegal once the transition time (unknown), from the RRB, ends. Only Section 8 grounds will be allowable for possession of the property. All new tenancies will start as, and existing ones will transfer to Assured Periodic Tenancies in the same timeframe, with contracts being month to month and tenants being able to give two months’ notice from the offset. The Government is committed to this and wants the transition to happen as quickly as possible once the Bill becomes law, so that there is a limited time of a two-tier system.
Given the size of the changes coming, there are numerous areas that landlords need to be aware of:
Periodic tenancies – Written Tenancy Terms
Rents – Initial amount taken, no extra amounts up front, bidding outlawed, future increases
Guarantors and limitations
Changes and additional Grounds to Section 8
The banning of discrimination on certain groups of tenants – housing benefit, pets, children
Compulsory signing up to a specific Redress Scheme
Compulsory signing up to a Landlord Database
Complying with the Decent home Standard – Awaabs Law
Use of Rent Repayment Orders (RROs)
Increased Council Powers and greater enforcement
Over the next few weeks, I`ll briefly tackle each subject giving the basics of what to expect along with the most current relevant views and opinions. Until this becomes law, nothing can ever be expected to be set in stone, but we are pretty sure of 95% of it, as there are unlikely to be very few serious challenges to Labour, given their majority in both Houses.
Landlords need to start preparing for these changes NOW, because the whole mindset will need to change and become more laser focused on how they operate and how they deal with all the details surrounding the tenancy. My initial advice, if you are unsure what is involved, is to talk to an expert property professional or give the property/portfolio to an agent to manage on your behalf. You will no longer be able to remain an “amateur” in this sector, as the government wants only professionals dealing with rental properties and their tenants. There are five points I would suggest that landlords will need to consider:
TREAT IT AS A BUSINESS!
Have CLINICAL RECORD TAKING
Have excellent COMMUNICATION channels
Avoid COMPLACENCY
Be COMPASSIONATE!!
Housing Minister, Matthew Pennycook, said:
“The Bill will modernize the regulation of our country’s insecure and unjust private rented sector, levelling decisively the playing field between landlord and tenant. It will empower renters by providing them with greater security, rights and protections so they can stay in their homes for longer, build lives in their communities and avoid the risk of homelessness.”
These are bold statements and a true sign of the direction of travel that Labour is taking with the PRS. I think a lot of reasonable landlords would not quibble with some of the desired outcomes, but what is beyond doubt that getting it wrong could be costly on many levels!
The unknown question will be whether what Labour want to achieve is realistically achievable. If the supply of property becomes even more scarce, that will only push up rents and make it harder for the poor and vulnerable to be able to afford the rents.
We`ll kick off with the abolition of Section 21 notices and the ASTs.