Renters (Reform) Bill could bankrupt landlords, warns expert

A housing law expert has warned that the Renters (Reform) Bill, which aims to improve the private rented sector, will have dire consequences for landlords AND tenants.

Des Taylor, a director of Landlord Licensing & Defence, said that the Bill will introduce new enforcement measures against landlords, which will result in massive fines and even bankruptcy for some.

He said: “The Bill will not only end the use of ‘no-fault’ evictions, but also introduce new requirements for landlords to register on a national register and with an ombudsman scheme, to provide meticulously correct paperwork and notice forms to tenants, and to comply with even more standards and regulations.

“Failure to do any of these things exactly, will expose landlords to the risk of hefty fines from local housing authorities (LHAs), who will have a statutory duty to enforce them under the Bill when it is enacted.”

Expand the scope of rent repayment orders

The Bill will also expand the scope of rent repayment orders (RROs), which allow tenants or LHAs to claim back up to 12 months of rent from landlords who have committed certain offences.

Mr Taylor said: “This could be devastating for portfolio landlords who make a small mistake in registering or serving notice.

“They could face multiple RROs and fines, which could wipe out their income and assets.

“The consequences for their tenants’ security of tenure would also be dire.”

Overshadowed by the focus on ending ‘no fault’ evictions

Mr Taylor criticised the lack of awareness and consultation on the Bill, which he said has been overshadowed by the focus on ending ‘no fault’ evictions.

He also warned that many landlords and letting agents are unaware of the new enforcement measures and their implications, and that there are no plans for a national advertising campaign or guidance to inform them.

He called for a national authority to set the level of fines and RROs, rather than leaving it to the discretion of LHAs.

LHAs have abused their powers

Mr Taylor said: “We have seen how many LHAs have abused their powers under the Housing and Planning Act 2016, which introduced civil penalties for rogue landlords.

“LHAs have instead targeted the low-hanging fruit of reasonable landlords, not rogues, and imposed exorbitant fines that are massively disproportionate to the offences, often without proper evidence or due process.

“We fear that this will continue under the new Bill, unless there is a national framework to ensure consistency and fairness.”

He is now urging landlords and agents to familiarise themselves with the Bill and its requirements, and to seek professional advice if they are unsure or need help.

Advice and defence representation to landlords and agents

Mr Taylor says that Landlord Licensing & Defence offers advice and defence representation to landlords and agents who are facing enforcement action from LHAs.

He said: “The Renters (Reform) Bill might be a great idea in principle, but it has not been thought through in practice.

“It will create a lot of confusion and complexity for landlords and agents, who will have to navigate an enlarged minefield of new rules and regulations.

“It will also give LHAs a licence to print money from fines and RROs, which will ultimately harm both landlords and tenants as landlords exit and rents increase even more.”

He adds: “We hope that the government will reconsider some of the proposals and listen to the concerns of the industry before it is too late.”