Renter’s Rights Bill moves seamlessly to House of Lords

The Renter’s Rights Bill had its third reading in the House of Commons on Tuesday 14 January where Housing Minister Matthew Pennycook introduced further amendments.

There are several key amendments which have been introduced late in the passage of this bill through the House of Commons and which might have far-reaching effects for both landlords and tenants.

Limiting rent in advance

It was proposed (and agreed by the majority of MPs) to limit the rent which a landlord can ask a tenant to pay in advance to one month (along with the usual deposit). Currently there is no limit. The practice of seeking anything from three to twelve months rent in advance is not uncommon and is often used for students, people who have recently come from abroad or those who may not meet credit checks but can nonetheless afford the rent. This is a perfectly legitimate practice and protects landlords as much as possible from non-payment however there are some unscrupulous landlords who have been seeking rent in advance as a matter of course simply because they can where there is a local housing shortage because tenants will do anything they can to secure the property that they want.  Some landlords or agents have been using it as an incentive where there is a bidding war between tenants. Whoever can pay the most rent upfront (thus giving the landlord greater security) might be the chosen tenant.

Removing the ability for the landlords to collect more than one month rent in advance could be problematic for tenants who have no other way to show that they are financially capable of paying the rent and may mean that they have significant difficulties in renting a property.

Eviction of students

The amendment to recovery of possession Ground 4A prevents the use of this ground where the tenants have signed the tenancy more than six months prior. Many students sign up for accommodation one academic year in advance to secure the property. This is therefore intended as a disincentive to landlords to get students to sign up earlier and earlier before friendship groups have been formed and when they may already be struggling financially.

Guarantors not to be liable after tenant’s death

This amendment is intended to protect bereaved families from paying rent when they have recently lost a loved one. This will only apply where the guarantor is related to the deceased and thus has very specific application.

Landlord’s fees

Matthew Pennycook confirmed that secondary legislation will be needed to bring in compulsory fees for landlords to fund the ombudsmen which will be set up. Those fees will need to be reasonable.

Landlord database

The amendment sets out the information that the landlords will be required to be provide for the database and regulation will be compulsory.

Rent repayment orders

These can now be made against any landlord in the chain and thus a superior landlord can also be liable for repayment of rent.

Leases over 7 years

This new amendment excludes all new leases over 21 years from the assured regime and any existing tenancies between 7 and 21 years.

What else to watch out for?

A proposed amendment in relation to forcing landlords to make adaptations for disabled tenants was removed at the last minute by Mr Pennycook who says that it will return to the debate.

There were continuing calls in the debate for rent controls. We doubt many landlords will have been too happy with this from the MP for Clapham and Brixton Hill “I’m yet to hear a compelling reason why landlords should see their incomes grow faster than people who actually work for a living.”

And finally…

Jeremy Corbin said that landlords terminating tenancies or raising rents before the new legislation comes in is becoming common place. Mr Pennycook acknowledged the potential for this to happen in the interim period before the Renter’s Rights Bill becomes law. Most litigators will have been advising their landlord clients for some time to get their house in order and to increase any rents that may have stagnated and to obtain possession against any tenants they feel are difficult or may become difficult immediately before it becomes harder and more costly to do so.

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