The Renters' Rights Act: What it means for landlords

The Renters' Rights Act is one of the biggest overhauls of the private rental sector that has occurred in the last 50 years, and there are lots of changes that will affect both renters and landlords in the industry.

The goal is to rebalance the rental market, providing more security to renters while defining the legal grounds for landlords to recover possession in the necessary scenarios. If you're aware of the new law, but are not sure how it affects you, we've pulled together the main points that all landlords should be aware of.

Section 21 scrapped, with eviction rules tightened

The 'no-fault' Section 21 eviction has been abolished, with landlords now required to prove defined legal grounds to proceed with eviction. These can include:

• The landlord, or family member, moving into the property
• selling the property
• carrying out major works
• rental arrears
• breach of tenancy
• anti-social behavious
• damage to the property
• false information provided by the tenant.

Each ground has its own notice period and set of evidence requirements, and landlords will need to serve a notice that clearly outlines their reasons for possession. This will then need to go to court, and if a court grants possession but the tenant refuses to leave, a landlord will then need to apply for enforcement via bailiffs. 

An end to fixed-term tenancies

Fixed-term contracts have now been abolished, with tenancies moving over to a rolling tenancy with a 2-month notice period. This now means that tenants do not have to apply to renew in their property, but that they also do not have to leave at the end of the agreed term. 

This does not apply to University halls of residents or qualifying PBSA developments, but for the majority of the market with private landlords, your tenant could choose to leave after just 2 months, or could not leave the property for years. 

Rental increases limited, with a more formalised process

Rental increases are now limited to once per year, and cannot be made in the first year of the tenancy. There is a formalised process that landlords need to follow to action a rental increase, and will need to give at least 2 months' notice to the increase. 

Should the tenant feel that the rent increase is unfair, they can challenge the amount. 

Asking for upfront rent is now not allowed, and any form of bidding war has also been banned. 

Properties need to be advertised at a fixed rent, with agents being unable to invite or accept offers above the advertised amount.

Tenant rights expanded

It is no longer allowed to refuse tenants with children or on benefits, as doing so would be classed as discrimination. Tenants also have the right to request a pet, and landlords cannot blindly refuse - they must consider reasonably, and provide a reason if they are refusing the pet request.

What it means for the rental sector

The Renters' Rights Act is expected to increase the professionalism and respect within the private sector, pushing the more informal, often called 'hobbyist' landlords out of the industry as compliance requirements increase. 
Landlords that continue on are more likely to rely on agents and professional management services to ensure that they are meeting the legal obligations and managing tenancies under the new approved framework.