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  • Writer's pictureSarah Ruivivar

Landlords Face Potential Bankruptcy from Renters Bill

📸 ModelProp / Midjourney

Get ready for a bumpy ride, landlords!

The Renters (Reform) Bill could be a costly affair, despite the delay in plans to abolish Section 21 evictions. According to Landlord Licensing & Defence, this bill could result in hefty fines and, for some, even bankruptcy.

The bill, which recently had its second reading in parliament, is expected to introduce a slew of enforcement measures against landlords. Des Taylor, a director of Landlord Licensing & Defence, warns that common errors and oversights could now attract financial penalties of up to £30,000.

"The bill will 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," Taylor explained.

It doesn't stop there. The bill also proposes to expand the scope of rent repayment orders (RROs), which allow the claiming back of up to 12 months of rent from landlords who have committed certain offences. This could be "devastating" for portfolio landlords who make mistakes.

Taylor criticised the lack of consultation on the bill and warned that many landlords and agents were unaware of the enforcement measures and their implications. He also called for a national authority to set the level of fines rather than leaving it to local housing authorities (LHAs).

Taylor concluded, "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. We hope that the government will reconsider some of the proposals and listen to the concerns of the industry before it is too late and thousands more landlords exit the industry."

So, landlords, it's time to buckle up and prepare for the potential challenges ahead!

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