Renters’ Rights Bill – Private Landlords and Local Authority Enforcement

The Renters’ Rights Bill is currently at the Committee stage in the House of Lords and it is anticipated that the new bill will finally be enacted in April 2025. This enactment will finally make key changes to residential housing legislation which have been promised since 2019, including the abolition of s21 “no fault” evictions and the introduction of a private rented sector Ombudsman.

Although the Committee stage is yet to have been given a date, we are aware that a large number of significant amendments have been scheduled for consideration. These include a potential dilution of the removal of s21 and exceptions to the discontinuation of fixed term tenancies. We are tracking these amendments closely and will update further once the Bill moves to the Report stage in the House of Lords.

In this article we focus on how a number of key provisions of the Bill will apply to private sector landlords, the penalties for noncompliance and the enforcement powers which will be granted to local councils to police the new legislation.

Measures which will impact private landlords

The Bill includes a number of measures which are focused on improving standards in the private rented sector (“PRS”). Whilst these proposed changes are first and foremost to improve management of property by private landlord individuals and companies, they will also impact other forms of landlords in the sector such as providers of key worker and student accommodation.

Of these measures, we will focus on those which are most significant to the sector:

Introduction of the Decent Homes Standard to the PRS

Implementation of a Decent Homes Standard (“DHS”) to the private sector is a move to drive up standards in the sector, keeping tenants save and well in the process. The aim of the new standard is to ensure that all privately let accommodation is safe and decent for tenants to reside in – which will be benchmarked against set criteria.

There is due to be a consultation on this in spring 2025, where the finer detail of the proposals will become clear. It would be imagined that the new standard will include criteria for issues such as gas and electrical safety, managing damp and mould and removing various hazards in residential accommodation, such as asbestos.

It is clear that the enforcement of such standards will not be tenant led and instead will be by way of the local authority, which we discuss in further detail below.

Private Rented Sector Landlord Ombudsman

A significant introduction in the Bill is the establishment of a dedicated ombudsman for the PRS. Designed to further protect tenants, it is the intention for a new ombudsman to be introduced which all private landlords in England will be required, by law, to join (including those who use a managing agent).

It is intended that the creation of the ombudsman will ensure that tenants have access to redress services to deal with their complaints and that landlords can be held accountable for their conduct and legal responsibilities. Again this mirrors the service which is already available to tenants of social landlords, which in recent years has begun to become instrumental in driving up standards in that sector. The same is hoped to be achieved with a PRS equivalent.

There will be a financial cost associated with joining such scheme, by way of an annual charge. It is not currently clear, however, what these are likely to be, but is likely to be charged per unit of accommodation. For landlord of high volume units such as blocks of key worker accommodation, this cost could be significant unless exemptions for payment are set out in future regulations. 

Those landlords who fail to join an approved, or designated, scheme or who are expelled for failing to adhere to the obligations of such a scheme, are again, at risk of enforcement by the local authority. Under the proposed scheme, the ombudsman will have the power to; compel landlords to issue an apology, provide an explanation, take remedial action and/or pay compensation.

Landlord redress scheme

In addition to the new ombudsman, there will also be regulations requiring landlords to be a member of a landlord redress scheme. This is designed to allow for the independent investigation, and determination of complaints by prospective, current and former tenants or their representatives.

Again, regulations will set out how the scheme will work in practice and will give some idea as to the remit of the scheme. It is very likely that there will also be costs associated with joining the scheme. Potential redress may include apologies, compensation or the requirement to undertake any necessary points of action.

Private Rented Sector Database

An aim which has been discussed and desired by successive governments and private renters is the introduction of a PRS database of private landlord. Sign up to the database will be mandatory and will see all let properties registered. There will be a cost associated with joining the database, to be confirmed in further regulations.

Regulations on the database will follow, with the intention that local authorities will be the enforcers of the database. The database will hold landlord information such as which landlords have received banning orders, convictions or financial penalties in respect of their management for rented accommodation

It is suggested that Landlords that fail to register with the database will be restricted from marketing, advertising or letting properties until their full registration takes place, an important protection for prospective tenants. Additionally, it is proposed that unregistered landlords will be unable to obtain possessions order in the County Court without seeking registered status, although possession proceedings under grounds 7A and 14 would still be allowed to proceed. This additional level of enforceability, limiting the landlord’s ability to manage their properties, will be an important one.

Prohibiting rental discrimination and rental bidding

The Bill finally seeks to break down practices of rental discrimination, which have often been focused at tenants with tenant and those in receipt of state benefits.  This will outlaw the practice of blanket rules on who the landlord will and will not let to and failure to comply with this will amount to discrimination, potentially opening legal challenges and claims for compensation.

PRS landlord will also no longer be able to entertain bidding wars for desirable properties. This will be achieved by terms within the legislation that ban landlords from accepting a higher rent from a tenant than the amount the property rental was advertised for. This will stop the practice of letting to the highest bidder, which has been a significant problem in high rental demand areas such as large cities.

Introduction of “Awaab’s law”

As outlined in our recent article, the Government have recently announced that Awaab’s Law will come in to force from October 2025 for social landlords. An implementation date for the PRS is yet to be confirmed but the Housing Minister, Matthew Pennycock, has been very clear that is the Government’s intention to introduce Awaab’s Law to the PRS quickly. Private landlords should therefore continue to have this in mind.

Local Authority Enforcement

As highlighted repeatedly above, local authorities will often be the enforcers of the measures within the Bill which seek to improve standards and practices in the PRS.

Part 4 of the Bill seeks to:

·       Strengthen local housing authorities’ enforcement powers

·       Expand financial penalties

·       Introduce a new requirement for authorities to report on enforcement  activity and

·       Give the Secretary of State the power to appoint a lead enforcement authority, whose role would include providing guidance and information to local authorities to ensure consistent enforcement

Guidance on the Bill states that local housing authorities will be able to fine landlords up to a maximum of £7,000 for less serious and initial breaches of the new tenancy legislation. Multiple fines could be issued where a landlord had committed more than one breach. In the case of serious, continued and repeat offences, landlords would be liable for a fine of up to £40,000 or prosecution, a strong deterrent.

These are significant enforcement powers– predominately to tackle unscrupulous private landlords- and will be welcomed by tenants in the PRS. However, the real question is whether local authorities, who are already strapped for cash and resources, will have the support they needs to investigate and enforce where necessary. Whilst the proceeds of fines will help in this, they will need to be very significant in order to fund specialist teams to effectively police the PRS. Matthew Pennycock has suggested that “the government had committed to ensuring that additional burdens on local authorities resulting from reforms where full funded” and only time will tell on that.

With enactment of the new Act fast approaching, private landlords and local authorities should consider what steps they need to take to be ready for these changes now. Bevan Brittan’s Housing Management team can support landlords and local authorities alike in preparation for the Act. Please contact Kate Hicks or Sarah Orchard should you require further advice and guidance at this time.