Insurance overhaul in latest Renters’ Rights Bill amendment

The NRLA (National Residential Landlords Association) and other groups have fought back against the latest amendment to the Renters’ Rights Bill, which have controversially changed the rules surrounding pets in buy to let properties.

Buy to let landlords will no longer be able to require that tenants have insurance to cover any wear and tear caused by their pets. 

Many landlords are happy to allow tenants to keep pets in their properties, but doing so carries risks at the best of times. It is always a gamble to trust that pets are house-trained and generally well-behaved enough to treat the property as neatly as their human owners.

This news will considerably increase the level of risk associated with pet-owning tenants. If a tenant’s cat or dog scratches at carpets or walls, or has other accidents, their landlord would have to foot the bill for any resulting damages.

Reactions

Ben Beadle from the NRLA took to LinkedIn and other platforms to voice concerns about this amendment, starting off by labelling it a “dog’s dinner”:

This is a really ‘good’ example of where Government talks a good game about reflecting responsible landlords’ concerns, but does something completely at odds.

Beadle was more favourable to the Housing Secretary’s previous stance, which was that landlords should be allowed to request insurance in these situations. He called this “a sensible and pragmatic solution”.

Overall, the NRLA has come a long way from their earlier stance towards Sir Keir Starmer’s government, which was regarded by some as too appeasing towards Labour, over the true interests of private landlords. Now, its leader openly – and firmly – criticises the government on public forums. 

The NRLA recently collaborated with the British Property Federation and The Lettings Industry Council, to write a letter to housing minister Baroness Taylor of Stevenage, before the debate in the House of Lords on 1st July. 

The letter concerned “unworkable” issues surrounding court delays in processing legitimate possession claims and tenants’ gaining more freedom to challenge “above market” rent increases.

Meanwhile, David Smith, a property lawyer at Spector Constant & Williams, warned that this amendment would be viewed as a “betrayal” by private landlords who would have been willing to accept tenants with pets, so long as they had guarantees that the tenants would pay for an insurance policy to cover the costs.

He surmised that with the bill on the cusp of getting through the Report stage in the House of Lords and later returning home to the House of Commons, this U-turn was likely decided in order to reduce costs to tenants that insurance could add.

Smith added:

This last-minute laying of amendments which negatively affect landlords while simultaneously refusing to consider anything put forward by landlord organisations is not going to do much to endear the bill to landlords and agents and is going to make them nervous that more will appear which will only fuel the risk of landlords walking away.

Possibility of loopholes

Landlords may be severely limited in their ability to stop tenants from bringing their pets, unless they have sufficient reason to deny the request. 

While landlords may naturally become more risk-averse in light of these changes, there is a possibility that the freedom of choice may be taken out of their hands.

However, it is suspected that this new amendment is not 100% airtight, and landlords may be able to find workarounds in order to prevent pet-owners from renting their properties.

Smith has already asserted, “There are flaws in the legislation which make this possible”, though we will only be able to report on this once more information about the amendment is solidified in the ensuing parliamentary debates.

Earlier this year, we also reported on suspected legislative weaknesses pertaining to eviction laws. Despite the banning of Section 21 no-fault evictions, it was reported that Section 6B could be used to evict tenants when major redevelopment works were set to be carried out.

Rents shooting up?

A likely result of this pet amendment is that private landlords may be forced to increase rents, in order to cover the potential damage costs.

The NRLA and other pro-landlord groups have repeatedly warned Labour that their reforms could lead to affordability issues that negatively impact tenants, which is precisely what the Renters’ Rights Bill is designed to prevent, on paper.

Debate on the Renters’ Rights Bill is recommencing from 1st July. We will keep you updated on everything that happens with it.