Are you aware of the Renters’ Rights Bill which is due to come into force this year? Delivering the biggest change in the private rented sector in nearly 40 years, the bill will have a huge impact on how you operate as a landlord with new responsibilities for you and increased rights for your tenants.
Changes to Section 8 notice and abolishing Section 21
Abolishing the section 21 notice and changing tenancy agreements from assured shorthold tenancies to periodic tenancies are two of the most significant changes.
Under the new legislation, landlords will no longer be able to serve a section 21 (no fault notice) on a tenant without reasonable grounds. If reasonable grounds are used under section 8, the landlord will have to provide evidence, abide by new notice periods for each of the grounds to be relied upon and adhere to restrictions to be put in place for Grounds 1, 1A and 1B.
The introduction of a landlord database
The Private Rented Sector Database will be a national landlord database comprising the details of all residential landlords and the properties that they wish to rent out, whether via an agent, independently or to extended family or friends.
Landlords, or their managing agents, will be responsible for uploading their details, paying the registration fee and keeping entries up to date. They will also be liable for uploading gas, electrical and energy performance certificates (EPCs) including new versions when the originals expire. There will also be additional documents and data that the landlord must provide. Failure to comply with these obligations could result in fines.
Decent Homes Standard and Awaab’s Law
To improve rental property standards, landlords will have to ensure their properties are safe, secure and of a minimum standard for tenants to live in. The Decent Homes Standard includes the state of repair of the premises as well as the ability to keep it at a suitable temperature among other responsibilities.
Meanwhile, under Awaab’s law landlords who provide unsafe, hazardous properties will be prosecuted if they fail to act within set timescales to address issues such as mould and damp. Failure to keep your rental property to a ‘minimum decent standard’ or a breach of Awaab’s law could result in fines of up to £40,000, a banning order or a Rent Repayment Order (RRO).
Tightened in-tenancy rent increases and an end to rental bidding
The Renters’ Rights Bill will introduce tighter controls over when and how you can raise rents, with in-tenancy rent increases limited to once per year to a maximum of market value and with two months’ notice. If tenants deem an increase unfair, they will be able to challenge it via a First Tier Tribunal.
Bidding wars, where tenants are pitted against each other to drive up prices, will also be outlawed. Instead, landlords will be required to state the rent and can only let their property for the marketed price. It’s likely this will be monitored via the Local Authority or Trading Standards and that fines will follow if landlords increase rents incorrectly or accept bids over the advertised figure.
A right by tenants to request pets and an end to unlawful discrimination
Previously tenants with pets or children or claiming benefits have been discriminated against but new protections in the Renters’ Rights Bill aim to stamp out such practices.
Landlords won’t be able to “unreasonably refuse” an application by a tenant for consent to keep a pet. Similarly, they must not use children or benefits as an excuse to withhold information, viewings and ultimately tenancies to such tenants and will be fined if they do. The government will also be providing tenants who are facing eviction with free legal advice.
How to manage the changes yourself
The above are just a few ways in which the Renters’ Rights Bill will change how you operate as a landlord. You could choose to manage such compliance yourself, in which case steps include:
1) Enrol on a professional training course about the Renters’ Rights Bill to understand the impact and changes you will need to make.
2) Register your property on the government database and stay compliant, including keeping gas, electrical and energy performance certificates up to date.
3) Keep on top of your Home Office checks regarding your tenant’s right to rent – the Home Office does not remind you when this is due.
4) Be aware of the changes to minimal property condition standards and the timescales in which issues must be fixed, particularly bearing in mind that tenants will have recourse to free legal advice
5) Understand when you can increase your tenant’s rent, what rental figures are legally acceptable and be able to prove the validity of such an increase if required (showing figures of what similar properties are marketed for online will not be a valid defence at a First-Tier tribunal).
6) Have clarity on the grounds on which you can serve notice for possession, the correct section to use and the notice required.
How Kings Group can help manage the changes for you
Alternatively, the work involved makes the business case for a managed agent more convincing than ever. At Kings Group your property, and therefore your compliance with the Renters’ Rights Bill, will be managed by an ARLA registered agent who has a legal duty to understand and adhere to new legislation or else be fined.
The financial responsibility of increased compliance is a heavy burden and with one mistake potentially costing you more than two year’s rent, it’s no surprise that 95% of the landlords on our books already have their properties managed by us. We expect that to increase with the advent of the Renters’ Rights Bill.
For more information on how Kings Group can assist you on your letting journey, please contact one of our branches in Essex, London or Hertfordshire today. We also offer a free and instant online valuation to give you an idea of how much your home could be worth on the current market.
