New Renters’ Rights amendments announced

A number of amendments to the proposed Renters’ Rights Bill have been announced ahead of report stage in the Commons next week.

The series of amendments were published late last night, on issues including the amount a landlord can take in advance rent, changes to student grounds and rent repayment orders.

Below is a brief overview of all proposed amendments – which will be open to debate during the session in the Commons next Tuesday. 

Rent in advance

 A new clause proposes:

• Rent may be taken in advance of the start of the tenancy but it is strictly limited to:
  • one month's rent for the start of the tenancy if paying monthly; or
• • 4 weeks of rent if paying weekly, fortnightly or every four weeks
• After the initial rental period, rent cannot be required any earlier than the first day of each rental period. This means you can never hold more than a month of rent at any one time.

• Terms that require more rent in advance will be replaced by new rental periods with regular payment patterns of no more than a month.

In addition to this, the Government has introduced new breaches of the Tenant Fee Ban where the landlord or their letting agent invites, encourages or accept offers of payments of rent above the permitted amount before the tenancy starts.

This includes any payments to third parties.

Any payment made in this way, even if offered by the tenant would be due to be repaid as a result and local authorities may also issue a civil penalty.

To read more about the NRLA concerns about these changes click here.

The student ground

The new student ground (4a) has been amended with an additional restriction put in.

We already know the proposed new ground can only be used where:

1. The property is a HMO

1. All the tenants met the student test when the tenancy is entered into, that is, they are students, or it is reasonable to believe they will be during the tenancy.

1. The landlord intends to let the property next time to another group of students.

The new additional caveat is that the tenancy must be agreed less than six months before the start date of the tenancy.

This effectively bans student landlords from agreeing tenancies more than six months from the move in date.

Death of a tenant

Under the proposed changes the Bill will also limit guarantor liability across the board, so guarantors are not liable for any rent due following the death of a tenant (at present it depends on the terms of the guarantor agreement).

Exempt tenancies

Under the new plans if they are to be exempt from the assured tenancy regime, fixed term tenancies must be for a minimum period of 21 years or more. Previously this was seven years.

Tenancies of seven years or more already in existence will still be exempt from the assured tenancy regime under the proposals.

Fee calculations

The redress scheme and landlord database cost calculations have also been updated to include  the expected cost of enforcing the Act and running the scheme/database. As a result, we expect the fees to be significantly higher than the amount suggested originally, something the NRLA had already rasied concerns about.

Rent repayment orders

Amendments also include proposals allowing superior landlords to be pursued for rent repayment orders – even if they have received no rent. This means, for example, if a rent-to-rent company absconds with the rent paid to them by the tenant, this tenant will have the right to have the missing cash repaid by the superior landlord (the property owner).

HMO licensing

Finally, under the new proposals landlords may not rely on terms of the contract as the sole basis of any defence against a  HMO licensing offence. For example, a clause in the tenancy that prohibits tenants from subletting would not be sufficient on its own if the tenant had sublet, turned the property into a HMO, and the landlord had passively accepted it.

What happens next

Report stage, on Tuesday 14 January will see all MPs given the opportunity to consider all amendments to the Bill on the floor of the house, and is expected to be followed by the Bill's third reading later that day. 

After this it will progress to the House of Lords.

The NRLA is hosting a free webinar for members on 15 January, when our policy and campaigns team, along with Doug Hall, director of mortgage brokers 3mc, will take a detailed look at the latest round of amendments and how you and your businesses could be affected.

The webinar will be held on Zoom and will run from 12pm to 1pm and you can book your place by clicking here.

More information

• For full details of the amendments tabled to the Renters’ Rights Bill ahead of report stage click here.
• You can keep up to date with all the developments of the Renters Rights Bill, by accessing our exclusive member Hub here.  
• Extra dates have been added for our new Renters’ Rights course, after training sessions sold out in record time. For more information and to book click here. 
• Be sure to follow us on social media and sign up for our newsletters for all the latest news and updates on the Bill’s progress.