A quick guide to the current changes envisaged by the Renters' Rights Bill

The Renters' Rights Bill continues to wend its way through Parliament - so what does the current Bill say and how is it likely to affect the rights and responsibilities of landlords and tenants? This is a brief guide to the Bill and the changes it envisages. 

Sections 1, 2 and 28

• At present, an assured tenancy has a fixed term usually of 6 months / a year.
• s1 provides that a tenancy cannot be an assured tenancy if it is fixed for a term and where periods of the tenancy are different from the periods over which rent is payable.
• Assured tenancies will all be periodic.
• Where the terms of an existing tenancy render it of a fixed term and with rental periods of over a month, the Act disapplies those terms and applies a formula to calculate the rental period.
• s28 amends Schedule1 of the Housing Act 1988 – to exclude tenancies of over 7 years from the definition of assured tenancies.
• s28(5) provides that where a valid s.8 notice has been served and proceedings have either commenced on that notice or not commenced but not become time-barred immediately before the day the Bill comes into force, the tenancy remains an assured tenancy and those proceedings can continue until they become time-barred or conclude.

• Under s2, Chapter 2, part 1 of the Housing Act 1988 is removed. Assured Shorthold Tenancies are going!
• The standard tenancy will be an assured tenancy, and they will all be periodic with the periods being the periods over which rent is payable.
• This means landlords can no longer serve s.21 notices – s.21 is gone.

Section 4/Schedule 1

• s4 changes the periods of notice so the standard will be 2 months (or possibly 4 or 2 weeks depending on the ground used).

• Schedule 1 of the Bill amends Schedule 2 of the Housing Act 1988 to add, remove and change the grounds for possession, as follows:
• Ground 1 required notice to be given at the outset of the tenancy that where a property was the landlord’s home before the tenancy, he or his spouse requires it back for that purpose.
  • This is amended so that notice isn’t required at the outset; 6 months must have elapsed under the tenancy; and the class of person who is entitled to have the property as their home is widened to include parents, grandparents, siblings, and children. It also provides that a “relationship of half-blood is to be treated as a relationship of whole blood”.
• Ground 1A will be inserted – possession is required to sell the property or grant a leasehold interest in it. Again, 6 months must have elapsed under the tenancy. Certain landlords are excluded including social landlords and housing trusts.
• Ground 1B will be inserted and applies to private registered providers of social housing. It is intended to enable property ownership where a rent-to-buy tenancy has expired and the landlord either wants to sell or rent under another rent-to-buy agreement if the existing tenant didn’t buy.
• Ground 2 is cleaned up and applies to a mortgagee seeking possession. There will no longer be a requirement for the mortgage to be granted before the tenancy, or for notice to be given in accordance with ground 1. Now, where the mortgagee has a power of sale and needs vacant possession to sell, that is a ground for possession.
• Grounds 2ZA/ZB/ZC will be inserted – possession is required where the superior landlord requires possession and has served notice to expire in 12 months or the superior lease will expire in 12 months.
• Ground 4A will be inserted for situations where the property is a student let and the tenant ceases to be a student. The landlord will be able to obtain possession where they gave the tenant notice before the beginning of the tenancy by way of a written statement of their wish to recover possession on the basis that they only wish to let to a full-time student.
• Grounds 5A, 5B and 5C will be inserted where possession is required in order to house someone employed in agriculture as a seasonal or permanent employee (ground 5A), where the property is held to house people who meet certain employment requirements (ground 5B/5D), and where the tenant was housed in consequence of their employment (ground 5C).
• Grounds 5E and 5F will be inserted to cover possession where the property is let as supported accommodation and the current tenant is not ‘supported’ or their funding has been withdrawn. Ground 18 is also inserted which covers the situation in which a tenant is in supported accommodation and is unreasonably refusing to cooperate with the provision of support services.
• Ground 8 (rent arrears) has been amended so that if a tenant is in receipt of housing benefit and has not received the payment, and that has caused rent arrears to accrue, then the portion of the total rent arrears attributable to the non-payment of the benefit are not to be taken into account in considering the total amount of the arrears.
• Ground 8A will be inserted to cover repeat rent arrears so that where 2 months’ rent has been unpaid for at least a day on 3 occasions over 3 years, possession is mandatory. This includes the same carve out for rent arrears on the basis of housing benefit issues.
• Ground 14 is amended so that the threshold is lowered from “likely to cause” nuisance or annoyance to “capable of causing”.

Section 7

• s7 amends s.13 of the Housing Act 1988 so that any rent increase can only take effect 2 months from the date of service of the notice. The parties' ability to agree a rent different to the proposed rental increase is varied to agreeing “rent that is lower than” the proposed rent increase.

Sections 10 and 11

• There is a potential new ground for claims. s10 inserts s.16A-C into the Housing Act 1988 giving the right to request consent for a pet, which consent is not to be unreasonably refused.
• Examples of reasonable refusal are set out at s.16B(4):
  • Would put the landlord in breach of an agreement with a superior landlord;
  • The superior landlord refuses consent where it is required.
• Consent is to be given or refused by the 42^nd day after the request is made.
• The landlord can request further information.
• Under s16B(5) – specific performance is a remedy.
• The Bill doesn’t say whether the superior landlord has a similar obligation in terms of not refusing consent. 
• Under s16C, the tenant needs to have insurance to cover any damage done by the pet. This is a counterweight to the imposition upon the landlord.

Sections 13 and 15

• s.16E will be inserted into the Housing Act 1988, which imposes duties upon the landlord such as to not let on a fixed term tenancy, not to end a tenancy orally or by notice to quit, not to serve a s.8 notice that is not in the prescribed form, and not to rely on a ground that the landlord knows they cannot rely upon.
• s.16H will also be inserted into the Housing Act 1988, which imposes financial penalties on landlords for breaching their duties.
• s16I of the Housing Act 1988 makes it an offence to rely on a ground that a landlord knows they cannot rely upon or is reckless as to whether they can rely upon it.

Section 28

• This substitutes s215 of the Housing Act 2004.
• s215 previously prohibited service of a s21 notice where a tenancy deposit had not been properly protected. That is removed because s21 notices are no longer of any effect.
• s28 now gives the court a discretion to grant possession even on mandatory grounds where a deposit has not been properly protected. That doesn’t apply to grounds 7A and 14 – criminality and nuisance/ASB.

Sections 30-36

• These sections codify a prohibition on refusing potential tenants on the basis of their having children or being in receipt of benefits.
• There was nothing in statute previously preventing landlords advertising properties with ‘No DSS’ or similar, although there had been a couple of County Court decisions forbidding the practice.
• Under ss.30 and 31, and on the basis that a child would or may live at or visit the property, or on the basis that a person might be a benefits claimant, a landlord cannot
  • Prevent a person from enquiring, accessing info about the property, viewing it to rent it, or renting it; or
  • Apply a provision, criterion or practice that would make people less likely to have children at or visiting the property.
• s32 imposes financial penalties for breaching the above prohibitions - not more than £5,000.
• s35 states that terms in mortgages and/or insurance prohibiting mortgagors and customers from having tenants with children or on benefits are of no effect. It is likely that they will not be that effectual in reality as few mortgages have these provisions now.

Sections 56-60

• Institution of a landlord redress scheme – this is not mandatory yet, but there is provision for the Secretary of State to make regulations instituting the same.
• Complaints can be made by prospective, current or former tenants.
• An independent individual will be an adjudicator.
• There will be financial penalties if the regulations under s.56 are breached.
• Regulations may compel a landlord to be a member of the scheme before marketing a property for rent. There may be fees for being a member.
• s59 makes it a criminal offence to commit the same conduct at the end of 28 days after a financial penalty was imposed, or an appeal has been withdrawn or determined, or within 5 years from the date the fine was levied.
• Under s60, the Secretary of State can make regulations to enable the administrator of the landlord redress scheme to apply to court for an order that a determination under the scheme can be enforced in the same way as a court order.

Section 67

• This introduces a database of residential landlords (and people who intend to become residential landlords), as well as those who have committed offences or have financial penalties imposed on them.

Section 74

• s74 prohibits marketing a property for rent unless the property and the landlord are in the database.

Sections 126 and 127

• There is going to be an assessment by the Lord Chancellor of the possession process.
• The Secretary of State is going to produce a report on how the new grounds work in practice – whether they operate effectively, are comprehensive, and are fair.