Landlords seeking to sell their properties could face serious risks under the government’s newly debated Renters’ Rights Bill according to property litigation specialist Daniel Smith, Senior Associate in the Dispute Resolution team at Gardner Leader.
The Bill, which aims to abolish Section 21 “no-fault” evictions and strengthen tenants’ rights, is being hailed as a victory for England’s 11 million private renters.
But legal experts say it could have unintended consequences that ultimately harm both landlords and tenants – particularly those looking to exit the market.
Under the new framework, landlords will only be able to recover possession of a property in specific circumstances and will need to demonstrate a genuine reason, such as a confirmed sale. However, once a sale is agreed, landlords will not be permitted to relet the property for 12 months – a clause designed to prevent misuse of the sale exemption.
PRACTICAL DILEMMA
Smith (main picture, inset) warns that this creates a practical dilemma. If a sale falls through, the landlord may be left with an empty property for a year, losing both income and flexibility. Even more problematic, he says, is the risk of serving notice too late in the process.
“Serving notice is not the same as guaranteeing vacant possession,” he adds, meaning landlords could find themselves contractually obliged to sell without the ability to deliver the property empty.
PET FINANCIAL RISKS
Another major change is the Bill’s provision granting tenants the right to request a pet, with landlords required to respond within 28 days and only able to refuse on “reasonable” grounds.
Yet with the government rejecting proposals for a dedicated pet damage deposit, Smith says the financial risks now sit squarely with landlords.
He says: “Given the heavy restrictions on tenant deposit under the Tenant Fees Act 2019 and the refusal by the House of Commons to allow a 3-weeks pet damage deposit, there seems to be greater financial risks for landlords who consent to the occupation of pets.
“While damages could theoretically be recovered through the small claims court, landlords risk throwing good money after bad in seeking to recover damages, where tenants often have less means.
“Landlords risk throwing good money after bad in seeking to recover damages.”
