The Renters’ Rights Act 2025 marks a decisive turning point for England’s private rented sector. While publicly framed as a tenant‑protection measure, its deeper effect is to fundamentally alter the risk landscape faced by property managers and managing agents.
Where once the agent’s role centred on coordination - finding tenants, collecting rent, and handling maintenance - the new regime places them squarely inside a regulated, high-accountability operating environment. Risk is no longer occasional or transactional. It is continuous, procedural, and increasingly financial. Importantly, in a number of areas the act creates direct, free‑standing liabilities for agents where they are acting on the landlord’s behalf. The position is materially different from the pre‑Act framework.
From Flexibility to Friction: A more constrained operating environment
At the heart of the Act are several reforms that materially reduce flexibility and increase reliance on statutory processes. The most consequential is the abolition of Section 21 “no-fault” evictions, meaning landlords (and by extension their agents) must now rely entirely on Section 8 grounds, supported by evidence and processed through the Courts.
This single reform has profound implications. Possession, once a relatively predictable administrative step, becomes a litigation-sensitive process, vulnerable to delay, challenge, and operational failure. For agents, this introduces:
- Greater exposure to arrears and extended void periods
- Increased reliance on documentation, evidence gathering, and process discipline
- A higher likelihood of legal disputes and reputational risk
At the same time, the abolition of fixed-term assured shorthold tenancies and their replacement with open-ended periodic tenancies removes a key element of certainty in portfolio management. Tenancies no longer naturally reset; instead, they continue indefinitely unless properly ended through prescribed routes.
Pre‑Act primary liability sat with the landlord; Most statutory obligations (e.g. tenancy validity, possession, rent increases, prescribed information) were framed as duties of the landlord and agents were typically liable only contractually (to the landlord under the agency agreement), or under specific regimes (e.g. Tenant Fees Act 2019, AML, consumer protection, redress schemes).
The agent's exposure was, therefore, indirect , meaning that if an agent failed to comply with its contractual obligations (e.g. serving documents), the landlord remained legally responsible to the tenant and would usually seek an indemnity or being a claim in negligence against the agent.
In short, agents implemented compliance; landlords bore the legal risk (subject to carve‑outs).
The Act changes that architecture in two key ways:
- Express extension of liability to those “acting on behalf of the landlord”.
The legislation repeatedly applies obligations to “landlords, agents, or anyone acting on their behalf”. Government guidance confirms that persons acting on a landlord’s behalf “can also be liable for breaching these measures”. This is not merely vicarious liability, it is parallel primary liability and is a critical structural shift.
Put simply, agents are now statutory duty‑holders in their own right in many contexts.
- Direct liability attached to specific regulated activities.
Certain obligations are function-based, not role-based. This means that, whoever performs the regulated activity (advertising, progressing a tenancy, advising, drafting, etc), carries the risk.
Key examples include rent-setting and marketing (the rental bidding ban); should the agent fail to advertise a fixed rent and/or erroneously invite or accept higher bids, the agent themselves are at risk of a civil penalty of up to c. £7,000. This is an example of a clear departure from the previous regime as it is no longer the landlord’s pricing decision implemented by the agent but it is a regulated activity carried out by the agent.
Another example is an agent's failure to provide the written statement of terms and prescribed documentation which will put them independently in breach of the act, not the landlord. Similar further examples include the granting of a fixed-term tenancy, the failure to give proper notices and discrimination in tenant selection, which again will place the agent in breach.
Breaches of the act on behalf of agents will expose them to direct penalties, meaning that local authorities do not need to proceed via the landlord and the penalties cannot be passed onto the landlord.
Compliance becomes central - and costly
Alongside structural changes, and as alluded to above, the Act introduces a significantly more demanding compliance regime. The introduction of civil penalties that can reach thousands of pounds per breach represents a fundamental shift. Compliance is no longer a delegated administrative task; it is a core risk discipline, with direct financial consequences for failure. Even seemingly minor procedural errors, such as failing to serve the correct document, can trigger enforcement action.
The result is that risk becomes:
- Continuous (arising throughout the tenancy lifecycle)
- Auditable (dependent on records, evidence, and process integrity)
- Financially material (through fines and potential claims)
In effect, agents are transformed into regulated service providers, operating in an environment closer to financial or legal services than traditional estate agency.
Market Implications: A shift towards scale and professionalisation
As risk, complexity and compliance costs increase, the managing agent market is likely to evolve.
Many smaller landlords - particularly those who have historically self-managed or relied on light-touch agency support - will be finding the new environment more difficult to navigate. Early indications suggest a growing proportion are considering reducing their portfolios or exiting the sector entirely, driven by regulatory burden and reduced flexibility.
For managing agents, this creates a dual effect. On one hand, demand for professional management services increases, as landlords seek help navigating the new regime. On the other, the barrier to entry rises, favouring firms with the scale, systems, and expertise to manage compliance effectively.
Over time, this is likely to drive:
- Consolidation among managing agents, as smaller operators struggle to absorb the cost and risk of compliance
- A shift toward institutional landlords and build-to-rent operators, who are better equipped to manage regulatory complexity
- Greater emphasis on standardisation, digital systems, and process control
The sector becomes more “institutional” in nature, namely less fragmented, more systematised and increasingly driven by compliance capability.
Redefining the Managing Agent: From administrator to risk manager
These changes also reshape the fundamental role of the managing agent. The traditional model, focused on coordination, customer service and transactional efficiency, is no longer sufficient.
Instead, agents are becoming (i) process owners, responsible for executing statutory systems correctly, (ii) compliance managers, ensuring adherence across the full tenancy lifecycle and (iii) risk advisers, helping landlords navigate legal, financial, and operational exposure.
In practical terms, this means that success for managing agents will move from a sales/volume mindset to a compliance/risk-management mindset
Mitigating risk in the new landscape
Adapting to this environment requires deliberate change. Managing agents that succeed will be those that invest early in capabilities aligned to the new risk profile.
First, process standardisation and systemisation are essential. The margin for error has narrowed significantly, and reliance on informal or inconsistent practices creates unacceptable exposure. Agents must implement structured workflows, clear timelines, and robust record-keeping to ensure compliance is repeatable and auditable.
Second, there is a clear need to build legal and regulatory capability within the business. Understanding possession grounds, evidential thresholds, and statutory notice requirements is no longer optional. It is central to the role. This may involve training, internal compliance functions, or closer integration with legal advisers.
Third, documentation and evidence management become critical. In a system where decisions can be challenged (whether by tenants, ombudsmen, or regulators) the ability to demonstrate what was done, when, and why is a key risk mitigant.
Finally, agents will need to reposition their client offering. Landlords now face a more complex and uncertain environment and will value agents who can provide not just operational delivery, but risk and regulatory confidence. This creates an opportunity to move up the value chain, but it also demands a corresponding increase in investment in policies and procedures as well as capability.
Conclusion
In summary, the Renters’ Rights Act significantly reshapes the private rented sector by strengthening tenant protections and increasing regulatory scrutiny, shifting managing agents’ focus from one-off transactional risks to ongoing compliance responsibilities. As a result, the sector is becoming more professional and demanding - rewarding agents who invest in robust systems and expertise while leaving those who fail to adapt at risk of becoming obsolete.
Polly McBride is a Partner in the Professional and Commercial Risks team at DAC Beachcroft LLP and leads the Property Management Solutions team, providing specialist, streamlined claims and risk management advice tailored to the property management sector and their insurers.
