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The Render's Rights Bill is on track to get Royal Ascent in July, and I've given myself the challenge of doing a training video that will tell you what you need to know in under 10 minutes. This video will help you understand what's coming, what to look out for, and how it may change things for you. It's a waffle-free whistle-stop tour which focuses on what's important, and stick around to the end as I'll give the latest on when it's actually going to come into effect.
Who am I? I'm Suzanne Smith, lawyer-turned-landlord, and I run the independent.com website and this YouTube channel to bring balanced and reliable guidance to everyone in the private rented sector for free. Right, the countdown starts now. We're going to start with the new tenancy system.
So there's been a lot of talk about the abolition of no-fault evictions, but the Renters' Rights Bill is so much more than this. And at the heart of the bill is a new form of tenancy. And this is called an assured tenancy. This means that when the new tenancy system in the Renters' Rights Act comes into force, which is a so-called commencement date, and what I'm about to go through now will come into force immediately for situations where tenants rent a property that's their sole or main home. They're not a lodger, and their rent isn't above £100,000 a year.
When the new assured tenancy comes into effect, all existing assured shorthold tenancies will automatically convert into assured tenancies overnight, whether we like it or not. And this means there will be no more fixed terms, not even for students, unless you're in purpose-built student accommodation. So if you're in the middle of a fixed term when the act comes into force, it will become periodic overnight. And what does periodic mean? It means the tenancy is indefinite and it will run from month to month. There'll be no more renewals as there'll be nothing to renew. The tenancy will keep going until the tenants either serve a notice to quit or the landlord has grounds to terminate under Section 8, which I'll explain shortly.
Tenants will be able to leave whenever they like so long as they give at least two months' written notice, and it can even be by text, which needs to expire at the end of a rent period. So this is called a notice to quit. And speaking of rent periods, all rent periods, so that's the time for which rent is payable, will be a maximum of one month. And this means that if rent is currently due quarterly, termly, or yearly, it will be prorated to become due on a monthly date after the commencement date.
Next, all adverts and listings for new tenants will need to state the rent that the landlord is proposing, and that's called the proposed rent. The landlord won't be able to accept an offer from a tenant to pay more, even if they don't even ask the tenant to pay more, um, but the tenant just offers it. So, this is called rental bidding, and it's going to be banned. Applicants will be able to offer under the proposed rent but not above it.
Next, any term in a tenancy agreement that says that the rent is due in advance of the rent period will be null and void. Tenants can pay rent in advance voluntarily once the agreement's been entered into, but a landlord cannot make a tenant pay more than one month's rent at a time. And so this means that a landlord can't make it a condition of the contract for somebody to pay six months' rent in advance, for instance. Now, the tenancy agreement can say that the initial rent, and that's the period for the first rent period after the tenant moves in, is payable before the tenant moves in. But landlords can't ask for it to be paid until the agreement has been entered into. And they can't make the tenant pay more than one calendar month's rent at a time. So you can't have that first period as being any longer than a month. Say, at the moment you might want to do that to make it dovetail with a salary payment date.
Landlords will only be able to increase rent if they serve a Section 13 notice using an updated version of Form 4. And if there's a rent review clause in the tenancy agreement, that will be null and void. And landlords won't be able to increase the rent validly by getting the tenants to sign something, which is what you can do now. They must serve the Section 13 notice first, and a tenant can challenge the Section 13 notice at the First-tier Tribunal. And if they do that, the date that the new rent will start will be after the judge comes to a decision, and the judge can decide to reduce the rent if they decide it's above the market rent for similar properties in the area.
Landlords will only be able to terminate a tenancy if they have a valid ground, as Section 21 no-fault evictions will be abolished. Grounds that are likely to be popular are the landlord selling up—that's ground 1a; the landlord or their family moving in—that's ground 1; various renter issues—antisocial behavior and breach of contract; and redevelopment—that means pretty much knocking it down.
Landlords will need to allow tenants to have pets so long as the request is made in the proper way, that the request is reasonable, and the landlord doesn't have a good reason to turn it down. For instance, if it's a flat and the lease says no pets. When choosing tenants, landlords won't be able to have a no-kids or no-DSS policy. They'll be able to turn down applicants if it would lead to overcrowding or if the tenants couldn't afford the rent or they don't pass credit checks. But if somebody has Universal Credit and they can otherwise afford the rent, the landlord needs to look at them because they can't just turn them down on the basis that they have Universal Credit.
So that's the new tenancy system in a nutshell. Now for the other bits that are important in the bill that will come into effect later. So, because there's so much more to the Renters' Rights Bill than just the new tenancy system, I'll now go through the other key changes that will come into effect at a later date.
Once it's launched, landlords will need to have an active entry for both themselves and each property on the landlord database. And so, if you own some in your own name, some in a limited company, then both of those are separate landlords, and you'll need to have separate entries. We don't yet know what we'll have to upload, but it may be things like gas safety certificates and EICRs. We'll also need to register with the Landlord Ombudsman once it launches, even if we use agents, and this will be an independent redress scheme that will handle complaints from tenants, and landlords will need to pay a fee for that.
There are some new rules about the condition of properties. The first is the Decent Homes Standard, and the government is due to set requirements for the minimum standards of properties in the private rented sector. It's likely to be different from what it is in social housing, and we don't yet know the details, but it will include things like the state of repair of the premises. The next thing is Awaab's Law, and if you remember that's the little boy who died after inhaling mold spores in his parents' social housing flat in Rochdale, and at the moment it applies to social housing, and it's going to be rolled out to the private rented sector, and the government will set clear legal expectations about the time frames which landlords will have to make homes safe when they contain serious hazards like serious mold. We don't yet know what those time scales will be.
Right. A couple of things for landlords to look out for. The Renters' Rights Act will have sharp teeth as there will be penalties for almost all of the provisions. These include civil penalties from the local council, which are penalties up to £7,000 for the first offense, and they can increase to £40,000 for a continued or repeated breach; and rent repayment orders for up to two years' rent which tenants can apply to the First-tier Tribunal for and claim off the landlord.
Let me give you a few examples. For instance, if a landlord purports to let for a fixed term after the commencement date, in other words, if a landlord uses an old form with a fixed term in it after the commencement date, so they're doing it themselves, then they can be fined up to £7,000, and the tenant can apply for a rent repayment order. And if the landlord uses the selling-up or moving-in grounds in Section 8 that I mentioned, and a tenant moves out, the landlord cannot relet that property for 12 months or put it on Airbnb. And if they do that, not only could they receive a penalty of up to £7,000, the tenants can apply for a rent repayment order. And local authorities also have the right to ask for information and even enter business premises without a warrant if they're investigating a suspected breach of certain legislation, including the rules relating to rental discrimination—that's no-kids, no-pets, HMO, and selective licensing—the Ombudsman, and the landlord database.
Right. So, I've galloped through that really quickly in under 10 minutes, but I'll now give you an up-to-date guesstimate as of the 18th of May when I think it's going to come into effect. So, this new tenancy system that I've been talking about won't come into effect when the Renters' Rights Bill becomes an Act. Instead, the new tenancy system will come into effect on the commencement date. And I don't think that's going to be until 2026. I may be wrong, but the government has promised to give the PRS sufficient time to get ready. And let's hope that they deliver on their promise. And if they do, it will be more than just a couple of months. And it's really important to keep up to date because things might happen very quickly. And the best way to do this is to subscribe to my free weekly newsletter as I share what's happening. And you can see the link here. You can also check out these Renters' Rights videos for a deeper dive. I'm putting out new content all the time, so subscribe to this channel to make sure that you don't miss the latest information. See you soon.