The Renters’ Rights Bill and the impact on landowners with tenanted properties
The year ahead will bring the Renters’ Rights Bill into force. The Bill proposes radical change to housing law and it is likely to have a significant impact across both the private and social rented sectors.
The Bill, at the time of writing this article, is currently at the Committee Stage in the House of Lords following which it will then have its third reading before receiving Royal Assent. If the bill progresses smoothly, Royal Assent could be granted as early as July 2025 with implementation anticipated to be between October and December 2025.
The headline news has been the ban on no fault evictions. However, the impact of this may not be as great as feared. Use of the Section 21 notice has become increasingly problematic for landlords in recent years due to the number of hurdles that a landlord now has to jump over. Serving an enforceable section 21 notice is not by any means straightforward; it is easy to fall foul of the statutory requirements including in relation to the provision of EPCs, gas safety certificates and dealing with rent deposits. Even where the notice has been validly served, all is not necessarily plain sailing and possession can be delayed if a tenant files a Defence or refuses to vacate necessitating the instruction of a bailiff or High Court Enforcement Officer. Therefore, the alternative route of using a ‘Section 8 notice’ may not be the disaster that many anticipate!
There will be new grounds for possession in the new Act including a new ground 1A: sale. Where a landlord intends to sell or grant a long lease they will be able to serve a notice requiring possession although this ground cannot be relied upon in the first year of the tenancy. The landlord will still be able to rely on the redevelopment ground if they intend to demolish or reconstruct the whole or a substantial part of the property or carry out substantial works and the work cannot reasonably be carried out without the tenant giving up possession. Both of these grounds will now require 4 months’ notice rather than the existing two months.
In some cases, the notice period will be shortened from the current notice period, for example, the anti-social behaviour ground for possession will reduce from one month to immediate notice. Other notice grounds are lengthened for example from two weeks to four weeks for the rent arrears grounds (8, 10 and 11). The timescale before possession proceedings can be issued following service of a Section 8 notice may therefore be extended in some cases but not significantly.
How can landlords prepare for implementation of the Renters’ Rights Bill?
A review of all existing tenancies, policies and procedures would certainly be sensible. If properties have a low rental yield, it might be that capital can be more profitably invested elsewhere. Alternatively, it might be that upgrading the property will enable rent to be increased or facilitate a move from renting to holiday lets.
The Renters’ Rights Bill marks a significant shift in the land-tenant dynamic and early preparation will be key to adapting successfully. Please contact Johanne Spittle, Director and Head of Litigation and Dispute Resolution on York 01904 716000, Wetherby 01937 583210 or Malton 01653 692247 or email [email protected].