Referencing will become increasingly important for agents and landlords when the Renters Rights Bill becomes law, it’s been claimed.

The abolition of Section 21, increased powers given to tenants and no end in sight to lengthy court delays combine to mean it’s more important than ever that tenants are carefully vetted before contract stage. 

Sim Sekhon, head of the Legal for Landlords organisation, says “Rents have risen, and the stakes are higher. You simply cannot risk agreeing to a tenancy without thorough referencing. Review the information provided carefully and, wherever possible, meet with the potential tenant.”

Sekhonalso recommends taking out rent and legal costs insurance cover. Currently only 16% of landlords do so, but he expects that total to double or rise still further – and he thinks that increased landlord caution will also mean more landlords instruct agents to manage.

The Renters Rights Bill receives its second reading in the House of Commons tomorrow.

Housing minister Matthew Pennycook will open the debate by setting out the case for the Bill and explaining its provisions. The opposition will respond and then all MPs are free to discuss it. The government will close the debate by responding to the points made. 

No amendments can be made to the text of the Bill at this stage, although MPs may give an idea of the changes they will be proposing at later stages. At the end of the debate the House will vote on the Bill. If the vote is lost by the government, the Bill cannot proceed any further, though it is rare for a government Bill to be defeated at this stage – especially with the scale of Labour’s majority following the General Election.

Most of the detailed work is then done at the next Committee Stage.  This is a line-by-line consideration of the detail of the bill. 

The committee will decide whether each clause of the Bill should remain in it, and will consider any amendments tabled by the government or other members. The amendments tabled may propose changes to the existing provisions of the Bill or may involve adding wholly new material. However, there are limits to what can be added to a particular Bill, as the amendments must be sufficiently close to its subject matter when introduced.

Then there is the Report Stage – often little more than a mention of the Bill following consideration of the committee amendments – and then comes the Third Reading, which is another general discussion of the Bill – typically occurring immediately after report. No amendments are possible. 

A similar route for the Bill is then taken in the House of Lords. Both Houses must agree on the text of a bill before it can become an act. This means that if the Bill is amended in the Lords, it must return to the Commons for those amendments to be considered. 

Labour says it hopes the Bill will become law before the summer of 2025.