The Renters' Rights Act came into force in May 2026 and most of the conversation since has focused on landlords and tenants. But what does this mean for the PropTech businesses that power the rental market behind the scenes? If your platform helps landlords collect rent, manage tenancies, handle deposits or run lettings operations, this legislation changes things for you too.
The Act removes Section 21 "no fault" evictions, meaning landlords must now give a legally valid reason to end a tenancy. It introduces a Decent Homes Standard for the private rented sector, a new Private Rented Sector Ombudsman and a national property portal, where landlords must register before letting. Tenants gain stronger rights around rent increases, pets and protection from discrimination.
Each of these changes touches the systems and tools that PropTech businesses have built and that landlords and agents rely on every day.
PropTech businesses and their platforms generally sit in the middle of how rental relationships are managed. The more embedded your platform is in that process, the more questions come when something goes wrong.
For Example, a rent collection platform that automates a non-compliant rent increase, who then carries the liability? The landlord instructed it, but the platform executed it. Or a tenant management tool that generates an eviction notice referencing a ground that no longer exists under the new Act creates real exposure for the platform that produced it. Lettings software that does not reflect the new property portal requirements leaves agents, and potentially the software provider in a difficult position.
The chain of responsibility between landlord, agent and platform is now longer and more complex than it used to be.
When it comes to cover, Professional Indemnity insurance is the most relevant starting point for most PropTech Businesses, it covers you when a client suffers a financial loss because of a failure in your service or product. Where your platform automates compliance-sensitive actions, robust PI cover is essential.
Technology Errors and Omissions (Tech E&O) cover responds when a software error causes a client to act non-compliantly and suffer a loss as a result. Many PropTech businesses carry this, but the question is whether the policy limits and wording are adequate for the exposure the new legislation creates.
Regulatory liability, including Directors and Officers (D&O) and Management liability, is worth considering too, the Act creates new enforcement routes and a new Ombudsman. Legal costs from an investigation can be substantial, even if you are ultimately found to have done nothing wrong.
"If your policy still reflects your business as it was two years ago, smaller headcount, lower turnover, a narrower scope of what you do, a claim linked to the new legislation could end up only partly covered, or not covered at all. It's worth checking your business is described accurately and that your cover reflects where you are now.”
- David Mills, Senior Technology Broker at Capsule
The new legislation has made that more complicated, clear terms and conditions that accurately describe what your platform does and does not do is the best way to protect your business. The second is making sure your insurance programme reflects your business as it operates now, not how it looked when you first took out cover.
The Renters' Rights Act has changed the landscape for everyone in the rental market. The question for PropTech businesses is whether you have the right protection in place before that risk becomes a claim. At Capsule, we work with technology businesses operating in complex, regulated markets. We can help you understand whether your current insurance programme is fit for purpose.
Get in touch if you’d like us to take a look at your exposure in light of the new legislation.
Disclaimer: This content has been produced for general information purposes and should not be taken as formal advice. You should always seek specific professional advice before acting on any of the information given.