Renters’ Rights Bill approaches finish line

The most extensive private rented sector reforms in decades could be just a few months away from implementation.

The House of Commons has passed an amended version of the Renters’ Rights Bill, sending it back to the House of Lords for the second (and perhaps final) time.  

If the Lords pass it, it will proceed to Royal Assent and from there to implementation.

What does the latest version of the bill look like?

A lot like the one that was sent to the House of Lords in July.

The Lords' amendments have been rejected by the Commons, including extra pet damage deposits, reducing the “no reletting” period after evicting a tenant to six months, and giving student landlords of one- and two-bedroom properties greater powers to evict tenants. Housing minister Matthew Pennycook suggested that they could be abused by rogue landlords.

However, a couple of new ones have been introduced. These mostly relate to the process for challenging rent increases at the First-Tier Tribunal.

First, the government will have the option to allow courts to backdate fair rent increases if tenants are seen to be using challenges as a delaying tactic. However, until the secondary legislation is brought in to enable this, landlords worry that tenants will be able to delay fair rent increases.

Second, politicians are looking at setting up an alternative body that would give an initial review of rent increases when they are challenged by tenants. This would let tenants see if their rent increase is reasonable before going to court and reduce the burden on the justice system, but like backdated rent increases, it would require secondary legislation.

Third, a new eviction ground 5a has been added to let agricultural landlords evict assured tenants to house agricultural workers. As things stand, ground 5 only applies to ministers of religion.

When will the Renters’ Rights Bill come into effect?

Implementation depends on the parliamentary calendar. The House of Lords still needs to pass the bill as currently amended, and they still have the option of sending it back to the Commons. Parliament is on recess and won’t return until 13 October, but the House of Lords has now confirmed that they will debate the bill the next day. That would pave the way for Royal Assent by the end of October.

The government has said the industry would be given “sufficient notice”, but hasn’t said anything more about when the bill will be implemented. Nevertheless, squeezing the Commons vote in between the end of the summer recess and the start of conference season suggests that they are prioritising it.

According to Matthew Pennycook, there will be “a smooth transition to the new system”, and the new rules will be applied to all tenancies in one stage instead of applying them to new tenancies at first and then rolling them out to existing tenancies later. He has also called for the bill to receive royal assent as soon as possible.

What should the industry do to adapt?

The Renters’ Rights Bill received its first reading over a year ago, and many of its headline provisions are holdovers from the previous government’s Renters (Reform) Bill. Property professionals have had time to assess its likely impact, and optimism is low: according to research by Reapit, more than 60% of property professionals were unhappy with the draft legislation.

Industry bodies and businesses, including Reapit, have engaged extensively with the government to try and shape the bill using industry data and experience. However, with Royal Assent potentially just weeks away, the focus should now be on adapting.

Reapit is currently offering exclusive consultation and training sessions for clients to help them prepare.