Renters’ Rights Bill – What you need to know as a Managing Trustee Landlord

The Renters' Rights Bill (the Bill) is expected to come into law by Summer 2025 and will bring long promised reforms to the way people rent homes. 

The Bill seeks to address issues championed by the Church over recent years including providing safe and secure homes for renters and protections against discrimination. However, what will the new law mean for Managing Trustees who often seek to let residential property on a temporary basis when not needed to house ministers, or to help those seeking short-term refuge, as well as lets providing a valuable income to further Mission?

In this article we will look at the changes being proposed that will directly impact Managing Trustees and what Managing Trustees can consider and do to protect their charity assets before the legislation comes into force. We have also added a new set of frequently asked questions to our website taken from questions we are being asked by Managing Trustees. Please use this link to access the Residential Tenancy FAQs. 

Scotland and Wales Most of the changes brought in by the new legislation will apply to England only reflecting tenant reforms already familiar to Managing Trustees in Wales and Scotland. However, details are included in this article on those reforms that will additionally impact those in Wales and Scotland: the ban on discriminatory practices.

 

1. Key changes proposed under the Renters’ Rights Bill 

The Bill has recently moved to the House of Lords. The current draft of the Bill proposes a whole host of reforms including the much publicised ban of “no-fault” evictions. Letting residential property is becoming increasingly professionalised with a growing number of statutory obligations falling on landlords. Letting residential property is not something that can be undertaken lightly by Managing Trustees. 

Note that the reforms do not impact on Manses occupied by Ministers. 

At this point in time, the following proposals appear to be the ones which are key for  Managing Trustees e.g. those Local Church and Circuit trustees involved in letting out Methodist residential property: 

• End of fixed term tenancies – The Bill will abolish fixed-term, assured and assured shorthold tenancies (ASTs) replacing these with periodic tenancies e.g. rolling tenancies with no end-date. This means that when the new reforms come into force: (1) Any new tenancies entered into by Managing Trustees will be rolling tenancies with no end date; and (2) Any existing tenancies will automatically convert into the new rolling tenancies. They will not end on any existing agreed end date e.g. the end of the fixed term stated in the tenancy agreement. 

 

From the day the new legislation comes into law (expected Spring/Summer 2025), new and existing tenancies will continue until ended by the tenant on two months’ notice at any time unless, the landlord is able to establish one of the new or reformed grounds for termination. Note: Government guidance to the reforms highlights that considerable fines can be imposed on you as landlord if you agree a fixed term tenancy even if your tenant is happy to do so. 

 

• “Abolition” of no-fault evictions – Landlords, including Managing Trustees, will only be able to end a tenancy if they can establish one of the prescribed grounds set out in the legislation. These grounds currently include needing the property as a Manse (reformed Ground 5), selling the property (new ground 1A), end of employment (ground 5C) and tenant rent arrears of three months (ground 8). The full list of grounds with the notice periods is set out in Schedule 1 of the Bill. (See summary in Table 1 – Grounds for Possession in the explanatory notes here.) 

Note: This means that Managing Trustees will not be able to end a tenancy simply by serving two months’ notice (former s.21 Notice) because the tenancy is not working out e.g. the tenants are unreliable in paying rent. You would need to establish a prescribed ground e.g. the tenant is in three months’ rent arrears or you are going to sell the property or move in a Minister. 

• Minimum tenancy of 12 months (introduction of an initial “protected period”): Tenants will be protected from eviction during the first year of a new tenancy. This means that even if you can establish one of the prescribed grounds, the tenancy can only be terminated after the end of the protected period (except in limited circumstances e.g. tenant involvement in a riot). Note: In a change from the current six month minimum tenancy in England, Managing Trustees need to be confident that they can commit to letting out a property for at least 12 months. It is not possible to enter into short tenancies where a Manse is not needed temporarily. 

 

• Limitation on rent increases during a tenancy: Landlords will only be able to increase the rent once per year, up to market price. Rent review clauses will be prohibited. To increase the rent a landlord will need to serve two months' notice in a prescribed form. Tenants can appeal any increase at a tribunal which, even if the tribunal agrees that the proposed increase is market rent, would delay the start of payment of the new rent until the tribunal decision. This could delay payment by months depending on tribunal backlogs.  

Note: Often Methodist tenancies are at quite modest rents as some Managing Trustees are reluctant to increase rents during a tenancy. Managing Trustees of existing tenancies need to consider whether steps should be taken now to bring the rent up to market level before the new reforms come in to ensure that the rent is still no less than market rent as required under Methodist Model Trusts. 

 

• Introduction of a “decent” homes standard and application of “Awaab’s Law”: The Bill will apply the same standards to privately rented homes as social housing with penalties for failing to comply (including fines up to £7,000 and prosecution for non-compliance). Awaab’s Law requires particular health and safety hazards such as black mould and damp to be investigated and remedied within strict timescales. These changes aim to ensure tenants can be assured of housing that is safe and secure.  

Note: It is hoped that Methodist residential properties will already meet the new standards due to the Church’s own inspection requirements, Manse guidelines and charity duties. However, Managing Trustees need to check properties they already rent out - or would like to rent out in the future - to see whether any works are needed and budget for appropriate maintenance over the course of a tenancy.  

• Creation of a new private rented sector database (Landlord register): Details about who will need to register and what this will involve are awaited. The database will provide tenants and local councils with more information about rented property. 

Note: It is will be necessary for Managing Trustees or possibly TMCP to register as landlord on the government database. This will involve registration fees and administration to keep the register updated leading to more work for Managing Trustees. It is likely the database will be used by local councils to assist in enforcement action against landlords. 

 

• Introduction of new ombudsman: The Bill introduces an ombudsman to assist in resolving tenant complaints against their landlord more quickly. Enforcement measures will be introduced for those who fail to join the scheme or to comply with decisions. The scheme is not currently intended to be used by landlords to resolve their issues with tenants.  Details of how the scheme will work are awaited. 

Note: Landlords, including Managing Trustees will be required to join the new ombudsman scheme and pay a membership fee. 

 

• Increased Local Authority enforcement powers: The Bill increases the enforcement powers enjoyed by Local Authorities with higher fines and prosecution powers. 

Note: As prudent charity trustees it is expected that Managing Trustees will be responsible landlords. However, renting property is increasingly regulated and care needs to be taken to put procedures in place to manage homes in accordance with the new requirements avoiding financial and criminal penalties. TMCP and the panel solicitors are here to assist Managing Trustees to understand their obligations under the new legislation once the Bill comes into force. 

 

Other Tenant Rights 

• Pets and discrimination: Managing Trustees should also bear in mind other tenant rights introduced by the Bill. This includes a right to request a pet and freedom from discriminatory behaviour. It will for example be illegal for landlords to discriminate against tenants who receive benefits or who have children.  

 

• Succession: As the default tenancy will now be an “assured” tenancy this would appear to mean that tenants would also have succession rights, which are already enjoyed by existing assured tenants. This right means that if a tenant dies, the tenancy passes to that tenant’s spouse, civil partner or cohabitee: they succeed to the tenancy. They in effect become the assured tenant. Note that succession can only happen once. However if a joint tenant dies and the tenancy then passes into their surviving joint tenant’s sole name, this is not counted as “succession” for these purposes. This means that succession can then happen if the surviving joint tenant dies and has remarried or is living with a new partner. The tenancy would then pass to their new partner.  

 

Please note that these proposals are subject to change before coming into law and further detail is awaited as to how exactly some of the proposals will work in practice e.g. landlord registration and the application to existing tenancies and ongoing possession proceedings. 

2. Wales and Scotland 

Parts of the Bill will also impact on residential tenancies in Wales and Scotland, known as Occupation Contracts and Private Residential Tenancies (PRTs) respectively. As far as Managing Trustees are concerned, the main point to be aware of is the application of the ban on discriminatory practices. As in England, landlords will be unable to discriminate on the grounds that a potential tenant has children or receives benefits. (Note that the Equalities Act 2010 already covers discrimination on the grounds of protected characteristics.) Please ensure any tenant selection advice received from your agents is based on the individual’s circumstances rather than a blanket ban on benefit recipients for example. 

Managing Trustees in Scotland should check with their agents whether any amendments need to be made to their PRT to account for this ban. 

In Wales it is understood that the fundamental terms in the Occupation Contract will need to be updated within 14 days of the new legislation coming into force. Please notify TMCP so that approval to the updates can be confirmed.  

3. Next steps for Methodist Managing Trustees 

Given the wide sweeping changes being brought in by these reforms, Managing Trustees who already let out property and those considering doing so in the run up to implementation, need to ensure they are prepared. As prudent charity trustees it is important to check that (1) you can  comply with the new requirements placed on landlords and that (2) the restrictions on terminating tenancies are not going to leave the charity without access to a property it needs for the charity’s purposes e.g. to house a Minister. 

More detailed information will be shared with superintendents but we have sketched out some suggested next steps for Managing Trustees here: 

Generally: 

1. Residential Property Audit - Review which residential properties in your Circuit are occupied by people who are not Ministers. Please include residential properties managed by Local Churches e.g. historic caretaker’s accommodation and properties bequeathed to the Church. 

 

Where a residential property is not used as a Manse: 

2. Tenancy audit - Check how long any occupiers have been in occupation and on what basis   

• Is there a written contract in place e.g. an assured shorthold tenancy (AST) or otherwise? 

• Has the contract/tenancy been entered into within the last few years? 

• Are all the current legislative requirements being met e.g. gas, electric and energy performance certificates up-to-date? Deposit properly protected? 

 

3. Updating – However long the occupier has been in residence, consider: 

• Does the property need updating to meet the decent homes standard set for residential property by the reforms? 

• Is the rent being charged at market rate or does it need updating now to ensure that the trustees are complying with the trusts of the charity? Please bear in mind the need under the Model Trusts to charge no less than market rate. 

 

4.  Future plans - Consider the Managing Trustees’ future plans for the property: 

• Can the Managing Trustee body allow the current tenant (and any successor) to live in the property indefinitely? 

• Do you have any need for the property as a Manse in the immediate future other than to generate income for Mission? 

• Is the Managing Trustee body prepared to take on the new responsibilities placed on landlords under the reforms as outline earlier in this article? 

 

Before entering into a new tenancy: 

5. Responsibilities placed on the Managing Trustees - consider whether the Managing Trustee body can fulfil all the requirements and administrative burden that will be placed on it as landlord under the reforms. 

 

6. Future plans - Is the Managing Trustee body happy that it does not need the property for any other purpose for the foreseeable future and definitely within the first 12 months of a tenancy (protected period)? 

 

4. Further Information on the Renters’ Rights Bill 

• FAQs 

We have added a new set of frequently asked questions (FAQs) to the Residential Tenancy page on our website relating to the Renters’ Rights Bill.You can read the FAQs and the answers here.

The FAQs are as follows: 

Q1. When will the new renters’ rights take effect? 

Q2. We already have a tenancy in place – will this be covered by the new reforms? 

Q3. If we already have an AST in place and the current fixed term tenancy is due to expire before the new legislation comes into force, will the tenancy automatically convert to one of the new rolling monthly tenancies? 

Q4. We entered into a tenancy for just six months in August 2024 as we thought we might need the property to house a Minister from Summer 2025. We are worried that this may no longer be possible. What should we do? We did not serve a Ground 5 notice at the time because our agent said it was not necessary and we could just serve two months’ notice. 

Q5. One of our Manses will not be needed to house a Minister for a couple of years and we’d like to let it out. Will we be able to get it back if we do need a home for one of our Ministers in the future? 

Q6. One of our Manses is available for a couple of months between our last tenant and the new Minister moving in. A local family have asked if they can live there while their new home is finished. We would like to help them but can we? 

Q7. What steps would we need to take to obtain possession in the future? 

Q8. How do we find out more about the Renters’ Rights Bill? 

Q9. We’ve heard that a property has to meet the standards of a “decent” home before it can be let out under the new reforms. What is a “decent” home? 

Q10. How will the process change for Managing Trustees and what is TMCP doing? 

 

• Government Guidance 

 

The following guides produced by the Government provide further details guidance on the Bill: 

• Guide to the Renters’ Rights Bill – Published by The Ministry of Housing, Communities and Local Government 

• Renters' Rights Bill -The Bill in its current form 

• Explanatory Notes: Renters' Rights Bill – Briefing note on the current form of the Bill 

 

TMCP will monitor the Bill's progression and will provide further updates and guidance when the details become clearer.  

However, the likely changes detailed in this article should be considered by Managing Trustees who are considering letting out a vacant property or renewing a tenancy with an existing tenant before the Bill comes into force and all Managing Trustees who are currently letting out property. It is expected that the Act will take effect in relation to both new and existing tenancies to prevent a two-two rental system emerging. 

Please register for updates via our website by signing up to our Newshub (click “sign up” at the bottom of this (or any) page on our website) and/or contact us here with any specific questions. 

 

If you have any queries in relation to the guidance in this document please contact TMCP Legal for further assistance.