Propertymark Warns That The Renters’ Rights Bill Will Cause Chaos Without Court Reform
Propertymark is a leading professional body for the property sector. It has recently warned that the Renters’ Rights Bill will cause chaos without court reform.
Landlords and their Landlord and Tenant Lawyers listen when Propertymark speaks out and encourage others to do so.
In this article, our Landlord Lawyers report on Propertymark's latest warning about the Renters' Rights Bill.
Appointments are available at our offices in central London, by phone, or online consultation.
The progress of the Renters' Rights Bill
The Renters' Rights Bill is, according to its long title, a Bill to:
‘’make provision changing the law about rented homes, including provision abolishing fixed term assured tenancies and assured shorthold tenancies; imposing obligations on landlords and others in relation to rented homes and temporary and supported accommodation; and for connected purposes’’.
The Bill is currently at the committee stage in the House of Lords.
Landlord and Tenant Solicitors don’t know when the Bill will get royal assent and become law. Nor do we know the implementation date. The government said landlords would get sufficient notice to prepare for the wide-reaching changes, but there will inevitably be political pressure to implement the new law quickly to improve tenant rights.
You can check the progress of the Bill by looking at information on the online House of Commons Library.
Abolishing Section 21 notices and no-fault eviction
One frequently reported planned change in landlord and tenant law is abolishing Section 21 notices and no-fault evictions.
Many landlords and letting agents are pragmatic and recognise that the new law will still allow them to evict problem tenants or to secure possession of their rental property if their circumstances have changed. However, landlords are concerned about the impact of the abolishment of no-fault eviction and the consequent increase in the time taken to secure possession of their property after serving a Section 8 notice and applying for a possession order.
Some fortunate landlords find that their tenants continue paying their rent during possession proceedings. Others find that their tenant is unable or unwilling to pay rent. Any court-related delay in the Section 8 notice and possession proceedings can pile financial pressure on a landlord because:
- The rental property may be mortgaged, and if so, the landlord has a monthly mortgage to pay.
- The house may require expensive repairs to remain fit for habitation.
- The rental property may need money spent on regulatory matters, such as a gas safety check.
- Non-payment of rent may create cash flow problems for landlords.
- Recovery of rent arrears from the tenant’s protected deposit may not be an adequate solution. The arrears could be substantial, and the tenant’s deposit may be insufficient to cover them.
- The tenant’s deposit may be required to cover the cost of the tenant's damage to the property that goes beyond fair wear and tear.
- The tenant may not have assets or income to justify court proceedings to recover the rent arrears.
- Other tenants may complain about the behaviour and actions of the tenant who is subject to possession proceedings. The tenant’s actions could cause other tenants to serve notice, refuse to agree to rent increases, or not want to renew their tenancy agreements.
These issues may be the difference between a landlord securing possession and renting out their property on a new tenancy agreement or selling up.
While some sceptics say that the Renters' Rights Bill is designed to deter people from renting out property, the reality is that a reduction in rental properties is also bad news for tenants. If there is a reduced supply of rental properties, then rents will rise with increased demand. Furthermore, even if the Renters' Rights Bill encourages landlords to swamp the property market with former buy-to-let properties, there is no guarantee that tenants will be able to buy. They may be unable to get a mortgage because they don’t meet the lending criteria, or be able to purchase because of the cost-of-living crisis.
Propertymark’s warning
Propertymark is warning that the Renters' Rights Bill could have two unfortunate consequences:
- Destabilise the rental sector.
- Cause chaos and undermine the court system.
Why is Propertymark giving further warnings about the Renters' Rights Bill?
Propertymark’s latest warnings arise from concerns raised by members of the House of Lords during debate and committee stages.
Peers flagged concerns about the courts' ability to digitalise and meet the increased demand for possession orders following the abolition of the Section 21 notice and possession process. Some peers said it could take the court up to five years to digitalise systems.
In response to peers’ observations and warnings, Timothy Douglas, head of policy and campaigns at Propertymark, has said:
“Members of the Lords warned that without court reform, the intended benefits of the Renters’ Rights Bill could be undermined by judicial bottlenecks and inconsistent outcomes, which could destabilise the private rented sector and harm both landlords and tenants.”
The Conservative government had promised to improve the court system before ending the no-fault eviction possession process, but this safeguard was scrapped. However, ploughing ahead with reform before the judicial system can cope with demand may have unintended consequences for the very section of the community the Bill is designed to protect.
Propertymark warns that the government needs to address:
- Court digitalisation reform.
- Funding for the court changes.
- Court capacity to deal with possession proceedings after landlords serve a Section 8 notice, following the Renters' Rights Bill becoming law and the abolition of no-fault evictions and Section 21 notices.
This is not the first time Propertymark has advocated on the Renters' Rights Bill. In 2023, the organisation sent a compelling letter highlighting the need for the court system to be allocated the resources to handle the work created by the abolition of Section 21 notices and no-fault evictions.
The chief executive officer summarised the problem as:
‘’As you will know, a third of all possession cases are Section 21 notices which are ‘accelerated’ claims that bypass the courts system. Therefore, the removal of Section 21 will mean more cases going through the courts. Consequently, there is concern that without increasing capacity in the court system, once the changes come into force, letting agents and their landlords will not know how long they will be expected to wait for a hearing and ultimately possession of their property.
‘’To improve access to justice for both landlords, letting agents and tenants, it is imperative that the removal of Section 21 takes place alongside essential court reform. While court procedures are a last resort, the reforms set out in the Bill will mean that where landlords want their property back, they will now have to go to court, but without improving capacity in the court system these proceedings will be lengthy and expensive. Currently, our members are unclear as to what progress the UK Government have made to improve capacity in the court system and digitise the process’’.
Speak to a Landlord and Tenant Solicitor
Landlord and Tenant Solicitors know the frustrations of working in an inadequately funded and digitalised court system. However efficient your Landlord Solicitor is, they cannot deliver their services in an acceptable timeframe for landlords if the court cannot efficiently process possession proceedings because of backlogs, lack of digitalisation, or the vast increase in Section 8 notice proceedings following the end of the fast-track Section 21 notice process.
At OTS Solicitors, our landlord and tenant team represent landlords, tenants, and letting agents. We recognise that there are good and bad landlords and tenants, but we believe it is in no one's best interests for the Renters' Rights Bill to become law without the judicial system in place to adequately and efficiently process landlord possession claims and tenant counterclaims and defences.
Appointments are available at our offices in central London, by phone, or online consultation.
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