"Without the ability to evict without cause, landlords may become more stringent in their tenancy agreements and more likely to pursue legal action to regain possession when issues arise. This could increase the burden on courts"
- Lawhive
Last Wednesday, the Labour Government released the Renters’ Rights Bill, outlining its plans to abolish section 21 notices in England. The bill also sets out to apply a Decent Homes Standard to the private rented sector for the first time, a ban on bidding wars, abolition of blanket bans on tenants with children/receiving benefits, and a ban on in-tenancy rent increases.
However, despite public approval, the bill's legal implications for tenants and landlords remain unclear.
The revised Renters' Rights Bill proposes substantial reforms to tenant protections. Key provisions include a ban on no-fault evictions, the application of Awaab's Law to the private rented sector, the introduction of the Decent Homes Standard, a prohibition on rental bidding wars, a ban on in-tenancy rent increases, and the abolition of blanket bans on tenants with children or those receiving benefits. These reforms aim to enhance tenant rights and ensure fair access to affordable housing.
Lawhive's legal experts have analysed the potential legal consequences of the Renters Rights Bill and its implications should it become law.
The legal implications of banning “no-fault” evictions
“The ban on "no-fault" evictions, which would abolish Section 21 evictions, fundamentally alters the balance of power between landlords and tenants. While this move is designed to provide greater security for tenants, it may inadvertently lead to an increase in disputes.
Without the ability to evict without cause, landlords may become more stringent in their tenancy agreements and more likely to pursue legal action to regain possession when issues arise. This could increase the burden on courts, which would need to handle a surge in possession claims where landlords are required to demonstrate “robust grounds” for eviction.”
How courts might handle an expected surge in possession claims if landlords are required to show “robust grounds” for eviction
“If landlords are required to provide justifiable reasons for eviction, the courts will likely face an influx of possession claims. The need to establish robust grounds could lead to more protracted and contested cases, slowing down the eviction process. The courts may need to adapt by streamlining procedures or increasing resources to manage the expected surge. However, this could still result in delays and increased costs for both parties, potentially exacerbating housing shortages as properties remain tied up in legal disputes.”
How the Bill’s promise of “greater protection” for tenants align with the existing landlord-tenant law
“The bill’s promise of "greater protections" for tenants aims to address long-standing concerns about tenant vulnerability in the private rented sector. However, these protections must align with existing landlord-tenant law, particularly the principle that both parties have rights and obligations. The bill will need to be carefully balanced to ensure that while tenants receive enhanced protections, landlords are still able to manage their properties effectively and fairly.”
Potential legal conflicts raised by proposed cap on in-tenancy rent increases
“The proposed cap on in-tenancy rent increases could raise potential legal conflicts, especially concerning contract law and market pricing. Landlords may argue that the cap interferes with their ability to set rents at market rates, potentially leading to challenges based on contractual freedom. The cap will need to be justified as a reasonable measure to protect tenants, without unduly infringing on landlords’ rights to negotiate terms freely.”
Potential legal consequences for landlords who fail to comply with implementation of Awaab’s Law on the private sector
“Under Awaab’s Law, landlords who fail to address serious hazards such as damp or mould face significant penalties, including fines up to £7,000 and possible prosecution. Non-compliance could also lead to loss of rental income and damage to the landlord’s reputation, especially if tenants are empowered to take legal action. The law will likely prompt landlords to be more proactive in property maintenance, though it may also lead to disputes over the interpretation of what constitutes a "serious hazard."
Implications of legal requirements to accept tenants with children or those on benefits
“The legal requirement to accept tenants with children or those on benefits represents a significant shift in landlords’ rights to choose who they rent to. This measure aims to ensure fair access to housing, but it could be met with resistance from landlords who feel that their ability to manage risks is being compromised. The law will need to provide clear guidelines to prevent discrimination while protecting landlords from undue financial risk.”
How the ban on “no-fault” evictions could impact tenant security in the short and long term
“The ban on "no-fault" evictions is likely to enhance tenant security in both the short and long term. In the short term, tenants will benefit from greater stability, knowing they cannot be evicted without cause. In the long term, this security could foster better tenant-landlord relationships and contribute to a more stable rental market. However, there is also a risk that landlords might become more selective or raise rents pre-emptively to mitigate perceived risks.”
Whether the restrictions on in-tenancy rent increases could lead to future legal challenges
“Restrictions on in-tenancy rent increases could lead to future legal challenges, particularly if rents fail to keep pace with market inflation. Landlords may argue that such restrictions interfere with their ability to maintain a fair return on investment. The law will need to strike a balance between protecting tenants from excessive rent hikes and allowing landlords to adjust rents in line with economic conditions.”
Expert predicts changes between now and second reading
“Between now and the second reading, there may be adjustments to the bill as lawmakers consider feedback from stakeholders. These changes could address concerns raised by landlords or refine the provisions to ensure they are both effective and enforceable. Stakeholders should remain engaged in the legislative process to advocate for fair and balanced regulations.”
