Most people probably aren’t aware of the new Renters’ Rights Bill which is currently working its way through Parliament. Due to become law later this year, when the Bill is passed it will have the biggest impact on the private residential rental sector in England for many years.
From the length of tenancies through to new rules covering rents and repairs, almost every aspect of the relationship between landlords and their tenants will be affected. As with most laws, there will be penalties for non-compliance and a significant increase in ‘red tape’ too.
The raft of changes involved hasn’t quite hit the headlines yet, but whether your rental portfolio is large or small if you are a landlord you really need to understand the details right now.
The Renters’ Rights Bill will remove fixed-term assured tenancies, abolish Section 21 ‘no fault’ evictions, restrict rent increases and apply The Decent Homes Standard to the private rented sector for the first time.
One of the reasons so many landlords in and around Taunton use our Property Management Services is because it’s our job to know about all legislation which affects their investments, so let’s look into the upcoming changes in more detail.
Fixed-term tenancies
Under the new laws, all tenancies will be periodic. This effectively means that tenants will be able to stay in place until they decide to end the tenancy with two months’ notice. Existing tenancies will convert to the new system with current fixed terms being converted to periodic tenancies.
However, The Bill will also expand grounds for possession where a tenant is at fault and landlords will still be able to regain possession of their properties if they want to sell or move in themselves.
Even so, the new laws will ensure that tenants will be protected from eviction under these grounds for a 12-month period at the beginning of a tenancy and the notice period for this is also increasing from two to four months.
The so-called ‘no fault’ Section 21 evictions will also be abolished entirely and landlords will need to provide a valid legal cause to end a tenancy early.
Restricting rent increases is another factor that will come into force. As well as restricting rent increases to once a year, the Bill will also give tenants the right to challenge them. Landlords will not be able to write rent increases into contracts and any annual increase must be in line with the current market rate.
Decent Homes Standard
For the first time the Decent Homes Standard will be applied to the private rented sector in England.
Although it shouldn’t be of a concern to most legitimate landlords, at the moment 21% of privately rented homes are considered ‘non-decent’ and more than half a million properties are said to contain serious hazards.
Clear expectations will be set out in the new laws and landlords who fail to address hazards will face fines of up to £7,000 and also be at the risk of further prosecution for non-compliance. Legal time frames for work to be done will be set out and issues such as damp and mould will be included in the list of hazards.
The creation of a new private rented sector database is intended to help landlords understand their obligations for compliance, as well as providing tenants with information too. It will be used by local councils to focus their enforcement regimes.
Database registration will be a legal requirement for landlords, who will be expected to provide details about themselves and their properties and it will also show any offences or penalties they have incurred.
This is only the tip of the incoming legal iceberg and it’s plain to see that the Renters’ Rights Bill will have an enormous impact on landlords. As well as landing you with a great deal of extra work it will also create plenty of pitfalls for the unwary, ones that could prove to be very costly indeed!
If you’d like to know more about how we can help you through the changes with the minimum of fuss get in touch today – call Jane or Nick on 01823 257 400, email info@townsend-property.co.uk or pop into the office at 16 Bridge Street, Taunton TA1 1UB 9am to 5pm Monday to Friday.
