On Wednesday, Labour’s Renters’ Rights Bill (First Reading) was introduced to Parliament. This Bill represents a HUGE victory for the organised tenants’ movement, and shows what we can achieve when we stand together. We’ve won on issues that our union has been fighting since it was founded a decade ago. Below you can find our full analysis of the Bill:
Summary:
What’s in the bill? This bill introduces some major reforms to private renting: Section 21 is to be abolished, new eviction grounds are to be implemented with the end of Section 21, illegal evictions are being cracked down on, and the rent tribunal system will be reformed. A new Landlord Ombudsman will be introduced, alongside a Private Rented Sector Database that landlords will be required to join. The bill takes steps to prevent discrimination against families with children and benefit claimants, and will put an end to rental bidding wars. It will extend the Decent Homes Standard to cover the private rented sector, and gives local councils new powers for enforcement. The role of rent repayment orders will also be expanded.
What should be better? New eviction grounds should be more favourable to tenants, and the crackdown on illegal evictions should be stronger. Rent increases should be judged on affordability, not "market rates". The Private Rented Sector Database should have more transparency, and tenants should be given the right to withhold rent when repairs aren't being carried out within the appropriate timescales. Landlord licensing should be made more effective.
What’s been left out? On affordability the bill is lacking: in tenancy rent increases should be limited much more heavily. Accessibility is also an area in which the bill is weak: Right to Rent should be abolished, alongside other measures to increase accessibility and reduce discrimination.
What’s in the bill?
Section 21
- Section 21 is to be abolished.
- Periodic tenancies are to be replaced by rolling tenancies as standard, with tenants able to leave with 2 months’ notice.
- All new and existing tenancies will transfer over to the new system on the same date.
New eviction grounds
- New no-fault eviction grounds are being introduced so that landlords can gain possession of their properties in certain circumstances, e.g. they are selling the property or moving themselves or a family member in.
- The previous government’s version of the bill made it too easy for landlords to abuse these grounds, and evict people with no genuine intention of selling the property or moving themselves or a family member in.
- A big win in this bill is proper measures to prevent abuse of the new grounds. The most important of these is that once a landlord has begun eviction processes, they will not be allowed to advertise or rent out the property for 12 months.
- Tenants being evicted under these grounds will have 4 months notice (an increase from 2 months). Tenants will also have a 12-month protected period at the beginning of a tenancy, during which landlords cannot evict them to move in or sell the property.
Illegal evictions
- Councils will now be able to issue civil penalties against landlords who illegally evict their tenants, including fines of up to £40,000.
Rent increases
- The rent tribunal system will be reformed so that it can not award a new rent level that is higher than that initially pursued by the landlord. It will also not be able to backdate rent increases, and will be able to defer rent increases by up to 2 months in cases of hardship.
- Rent review clauses in contracts will be banned.
Landlord Ombudsman
- The bill will introduce an Ombudsman for the private rented sector which is compulsory for landlords to join. Failure to join can result in punishments including financial penalties, criminal prosecution and rent repayment orders.
- Tenants will be able to use the Ombudsman to make complaints about their landlord.
- The ombudsman will be able to make binding resolutions for tenants, with powers to force landlords to apologise, provide information, take remedial action or pay compensation.
Private Rented Sector Database
- A new Private Sector Database will be created, which landlords will be required to join. Failure to join can result in financial penalties and criminal prosecution.
- Exactly what information the database will contain is to be determined, but it will provide tenants with information in relation to their landlord (including previous offences) and details of the property (including property standards).
- Landlords will use the database to demonstrate compliance and access guidance and information about their obligations.
Discrimination against families with children and benefits claimants
- The bill takes steps to prevent discrimination towards families with children and benefits claimants. These include not allowing insurance or mortgage policies to prohibit tenants from having children or claiming benefits, and punishments for discriminatory landlords including financial penalties.
Bidding wars
- The bill completely bans the solicitation or acceptance of bids for rental properties above the asking price, with financial penalties for offenders.
Pets
- Landlords will not be allowed to refuse reasonable requests for pets.
- Landlords will be able to require that tenants with pets have insurance covering pet damage.
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Disputes about whether a request is reasonable or not will be handled by the Ombudsman,
Conditions
- The Decent Homes Standard – which currently sets minimum standards for social housing – will now apply to the private rented sector.
- Failure to comply with the Decent Homes Standard can result in improvement notices, civil penalties, criminal prosecution, rent repayment orders and financial penalties.
- Awaab’s law – which gives social tenants protections from health hazards in the home – will also apply to the private rented sector. Landlords will be given strict timescales in which they have to address health hazards in their properties.
- Failure to comply can result in legal action by tenants, and action via the Ombudsman.
Local authority enforcement
- The bill gives councils new powers to collect and retain revenue for future enforcement work from financial penalties against landlords who flout the rules, and new investigatory powers.
- Councils will be able to issue fines of £7,000 for first-time or minor offenders, and up to £40,000 or repeat or major offenders. They will also be able to criminally prosecute landlords.
- The government have also committed to fully funding additional costs that councils incur as a result of changes brought in by the bill.
Rent repayment orders
- The role of rent repayment orders will be expanded.
- Tenants and councils will now be able to pursue rent repayment from superior landlords and company directors.
- Landlords who have previously incurred enforcement action will be required to repay rent if they commit that offence again. Enforcement action that incurs financial penalties will also automatically incur a rent repayment order.
- The maximum amount of rent a landlord can be ordered to repay will double from 12 to 24 months.
What should be better?
New eviction grounds
- Landlords should not be able to evict a tenant to sell a property or move themselves or a family member in, outside of rare circumstances. If a landlord needs to sell a property, they should have to sell it to someone who will keep the tenant in place – e.g. the tenant themselves, a private landlord, a housing association, a housing cooperative or a local authority.
- Tenants should have at least 6 months notice of their eviction instead of 4 months, and should be protected from eviction for at least the first 2 years of their tenancy instead of 1 year.
- Tenants should receive compensation for being evicted, in the form of non-payment of their last 2 months rent (with an equivalent system for those whose rent is paid via benefits).
Illegal evictions
- Councils should have a duty to issue civil penalties against landlords who illegally evict their tenants, instead of just an ability. Landlords should never be able to get away with breaking the law to turf out their tenants.
Rent increases
- Whether or not a rent increase is fair should be judged on whether it’s affordable, not whether it’s in line with “market rates”.
- If market rates are to be used, the tribunal should look at all existing equivalent rental properties in an area – not just new properties currently on the market, which are generally more expensive than properties being rented, and may be overpriced.
Private Rented Sector Database
- The database should have maximum transparency for tenants and councils, including information regarding EPC, electrical safety, history of enforcement action against the landlord or on the home, and current and historic rent data.
- This would give both the best chance of asserting tenants’ rights and enforcing landlord obligations, give councils a clear understanding of the rental market in their area, and help tenants avoid renting from rogue landlords.
Conditions
- Tenants should be able to withhold their rent if repairs aren’t made within the timescales set out by regulation.
- Landlord licensing should be made more effective: The Secretary of State veto should be removed, the maximum length of schemes should be extended from 5 years to 10, and councils should be allowed to revoke landlords’ licences based on poor conditions in their properties.
What’s been left out?
Affordability
- Rent rises within a tenancy should be capped at the lower of median wage growth averaged over 3 years, or CPI.
Accessibility
- ‘Right to Rent’ – which has already been abolished in Wales and Scotland – should also be abolished in England. The law requires landlords to verify that their prospective tenants have the legal right to live in the UK, and has led to wide scale discrimination against immigrants and those with “foreign-sounding” names.
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Landlords and agents should only be able to ask for a guarantor if:
- The tenants income wont cover the rent.
- The landlord doesn’t have insurance for non payment.
- The tenant doesn’t have insurance for non payment.
- Rent up front should be capped at 1 month.
- Landlords should have a legal duty to make adaptations for disabled renters with the support of the Disabled Facilities Grant.