Farmers face £7,000 fines as Renters' Rights Act deadline looms

Farmers renting out residential property have just weeks to act before major legal changes take effect under the Renters’ Rights Act, with fines of up to £7,000 for non-compliance.

From 1 May, the legislation will introduce sweeping reforms to the private rented sector — changes which could catch out rural landlords, particularly those subletting cottages or other residential property on their holdings.

The new rules mainly affect properties let under Assured Shorthold Tenancies (ASTs) or Assured Tenancies, rather than those covered by Farm Business Tenancies (FBTs) or Agricultural Holdings Act (AHA) agreements.

Matthew Scott, director in the Rural team at Strutt & Parker, said farmers with subletting arrangements need to pay close attention.

“The new Act does not apply to residential property let under a Farm Business Tenancy (FBT) or an Agricultural Holdings Act (AHA) tenancy, but critically it does cover any residential property on a holding that’s sublet under an AST or Assured Tenancy,” he said.

He explained that this could have significant implications for farm businesses.

“This means where a farm tenant has sublet a cottage - perhaps to a worker or non-agricultural occupier - that subtenancy could become an assured periodic tenancy from 1 May 2026, with the subtenant acquiring enhanced rights.”

Mr Scott warned that failing to act could lead to serious consequences, including financial penalties and reduced control over property.

“It is vital that farmers do not overlook the need to take action, as failure to comply with the new rules could result in a significant fine,” he said.

One of the most immediate requirements is for landlords to provide tenants with a government-issued Information Sheet outlining the changes.

Where tenants are occupying under unwritten agreements, landlords must also issue a Written Statement of Terms.

Both must be completed by 31 May 2026, or landlords could face fines of up to £7,000.

Under the new rules, all Assured Shorthold Tenancies (ASTs) will convert to periodic agreements with no fixed end date, potentially making it harder for landlords to regain possession.

For new tenancies created from 1 May, updated agreements will be required, while existing tenants must receive the Information Sheet by the end of May.

Section 21 ‘no fault’ evictions will also be abolished, meaning landlords must rely on specific legal grounds to regain possession using a Section 8 notice.

Rent increases will be limited to once per year and must reflect market levels, while landlords will only be able to request one month’s rent in advance.

Further changes include new rules preventing landlords from unreasonably refusing tenants with pets, and making it illegal to discriminate against renters with children or those receiving benefits.

Additional compliance measures are expected later in the year, including the introduction of a Private Rented Sector Database.

Farmers are advised to review any residential subletting arrangements now and ensure all required documents are issued before the deadline.

Mr Scott said the reforms highlight the need for landlords to stay ahead of their responsibilities.

“It is becoming more important than ever for landlords to stay ahead of the changes to their rights and responsibilities,” he said.

“Although the Act does provide a mandatory possession ground for a property housing an agricultural worker, the ability to use this depends on how the tenancy was first documented.

“So if you have agricultural tenancies with residential subletting in the mix, now is the time to review arrangements before the new rules come into force.”