Agent fined for breaching Renters Rights Act after illegal tenancy terms

Agent fined for breaching Renters Rights Act after illegal tenancy terms

A letting agent in Chesterfield has been fined over £7,300 following enforcement action for issuing a prohibited fixed-term tenancy and pressuring tenants to leave after they raised complaints. The penalties relate to breaches of the Renters Rights Act 2025.

Chesterfield council imposed two financial penalties on the letting agent, initially totalling £8,652 but reduced to £7,354.20 following prompt payment. The breaches were uncovered after tenants complained about housing standards shortly after moving in. The council’s investigation revealed the agent had issued a six-month fixed-term tenancy, which the Renters Rights Act 2025 prohibits, as it requires assured tenancies to be periodic. Additionally, the tenants were told to vacate and relocated to alternative accommodation owned by a different landlord after expressing an intention to complain.

Details of the enforcement and council response

The council’s private housing team took action after receiving the tenant complaint. The first penalty addressed the unlawful fixed-term tenancy agreement, which contravenes the Renters Rights Act’s ban on fixed-term assured tenancies. The second penalty was for the agent’s conduct in pressuring tenants to leave and moving them to accommodation outside the original landlord’s portfolio. The council also issued an improvement notice to ensure the property met required letting standards.

A spokesperson for Chesterfield council emphasised their commitment to protecting renters and enforcing compliance with the new legislation. They noted proactive engagement with landlords and letting agents prior to the Act’s commencement to clarify the legal changes and expectations. The council hopes this case serves as a warning to agents to fully understand and comply with their legal duties under the Renters Rights Act.

Context on the Renters Rights Act 2025 and its impact

The Renters Rights Act 2025 introduced significant reforms to tenancy law in England, including the abolition of fixed-term assured tenancies in the private rented sector. Instead, most tenancies are now periodic, offering tenants greater security and flexibility. The Act also strengthens tenant protections against unfair eviction and improves standards in rented accommodation.

For landlords and letting agents, the Act requires revising tenancy agreements to remove fixed-term provisions and adapting management practices to comply with new rules. The prohibition on fixed-term assured tenancies aims to reduce tenancy insecurity but has also led to operational challenges for agents accustomed to fixed-term contracts. The Act’s enforcement mechanisms, including financial penalties for breaches, underline the government’s intent to ensure compliance and protect tenants.

Practical implications for landlords and agents

This enforcement case highlights the risks of non-compliance with the Renters Rights Act. Letting agents must review all tenancy agreements to confirm they comply with the ban on fixed-term assured tenancies and use appropriate periodic tenancy wording. Failure to do so can result in significant financial penalties and reputational damage.

Moreover, the case underscores the importance of handling tenant complaints sensitively and lawfully. Pressuring tenants to leave or moving them to alternative accommodation without proper legal basis can constitute a breach of the Act and lead to enforcement action. Landlords and agents should ensure clear communication channels and documented processes for addressing tenant concerns.

Ensuring properties meet required letting standards remains a priority. Councils can issue improvement notices and take further action if standards are not met. This case serves as a reminder to regularly inspect properties and promptly address any issues to avoid enforcement.

Ongoing uncertainties and areas to monitor

While the Renters Rights Act has been in force for some time, some practical questions remain around its interpretation and enforcement. The precise scope of prohibited tenancy terms and the boundaries of lawful tenant relocation require careful legal consideration. Landlords and agents should stay alert to further government guidance and case law developments.

Additionally, the impact of the Act on landlord willingness to let and the availability of rental properties is being closely watched. Some agents and landlords have expressed concerns about the operational challenges and potential financial risks introduced by the reforms. Monitoring how local authorities enforce the Act and the consistency of penalties will be important for the sector.

What landlords and letting agents should do now

• Review all tenancy agreements to ensure compliance with the Renters Rights Act, removing any fixed-term assured tenancy clauses.
• Establish clear procedures for managing tenant complaints and avoid any actions that could be construed as pressuring tenants to leave unlawfully.
• Regularly inspect rental properties and address any maintenance or safety issues promptly to meet letting standards and avoid improvement notices.
• Keep abreast of updates from local councils and government on enforcement practices and legal interpretations of the Act.
• Consider training for staff and agents to ensure full understanding of the Act’s requirements and practical application.

Keeping your rental properties compliant

Membership of The Landlord Association (TLA) offers landlords and letting agents access to up-to-date compliance resources, including detailed guidance on tenancy law changes such as the Renters Rights Act 2025. TLA’s new property management and compliance platform, ORBIT, currently in BETA testing, helps members organise tenancy documentation and record key compliance actions. ORBIT’s tools support managing rental agreements, recording tenant communications, and monitoring property standards, which can assist in preventing breaches like those seen in this case. Exploring TLA membership can provide practical support to stay informed and maintain compliance as rental legislation evolves.

The practical benefits of TLA membership include access to expert insights, compliance checklists, and documentation templates tailored to the latest legal requirements. Members can also track regulatory developments and enforcement trends, helping them prepare for inspections and avoid penalties. ORBIT’s developing AI assistant aims to further streamline property management tasks, making it easier to keep evidence of compliance activities and respond promptly to tenant issues.

Landlords and agents should consider how these resources can integrate into their existing management processes to reduce risk and improve tenant relations under the new legal framework.

Looking ahead, the sector must remain vigilant as enforcement of the Renters Rights Act intensifies. Early adaptation and thorough understanding of the Act’s provisions will be essential to avoid costly penalties and maintain good landlord-tenant relationships.

Sources: Letting Agent Today