I did a training webinar recently on achieving compliance with the Renters’ Rights Bill. Although the time of the webinar had been extended, there was still not enough time to answer all the questions asked by delegates.
So I thought it would be helpful to answer some of them here.
Most of the questions asked are covered, although some have been omitted as they were not relevant, were duplicates of earlier questions, were answered during the webinar, or were merely comments on the law or policy.
The questions are in the order they were asked in the webinar.
RRB = Renters Rights Bill
PCN = Penalty Charge Notice
NTQ = Notice to Quit
AST = Assured Shorthold Tenancy
List of questions and answers:
Q: Will the conversion happen overnight, or will it be phased to let the current fixed terms be able to play out?
A: When the bill comes into force (which will be some time after it receives the Royal Assent), we are told that all assured shorthold tenancies will convert immediately to periodic assured tenancies.
Q: Some lenders insist on AST’s What will happen here?
A: The legislation will amend terms in existing mortgage deeds to replace ‘assured shorthold tenancy’ with ‘assured tenancy’. It is to be hoped that mortgage companies will accept this for new mortgages.
Q: Do you have to have initiated court possession for s.21 for it to still count when RRB come in
A: Landlords will be able to evict under existing section 21 notices after the bill comes in during the notice period. However, no new notices can be served.
Q: If tenancies convert to a Periodic (Statutory) tenancy, will ALL pre tenancy and tenancy documentation need to be re-served?
A: From the information given, it looks as if landlords will not have to re-serve tenancy agreements and other documents. However, the government will provide a form (which I suspect will be prescribed) which landlords and agents will need to serve on exiting tenants within a time limit.
Q: When a tenant wants to move, they need to give two months’ notice. Their next landlord won’t wish to hold a property for two months and their current landlord may not choose to let them leave early. Do we expect tenants to pay rent on two properties for two months? Lengthening voids is wasteful.
A: It will be up to tenants to time their notice to minimise any period where they will be liable for double rent. Their existing landlord will be entitled to be paid rent for the full notice period (whether the tenants are actually living there or have moved out), unless they agree to waive this.
Q: Will the RRB affect live-in landlord/lodger licences? Short-term lets, eg Actors Digs, ie the Landlord database?
A: At the moment, the legislation provides for landlords of assured and Rent Act 1977 protected tenancies to register with the database. However, it also allows the Secretary of State to provide by regulations for landlords of other occupation types (eg landlords of residential licenses) to register with the database too.
Q: Are there any plans to inform tenants about the changes?
A; The government are planning an awareness campaign.
Q: Are students in shared houses with joint tenancies also included or will they be exempt?
A: Purpose Built Student Accommodation (PBSA) is excluded from all or most of the provisions of the act, but it will apply to other student accommodation. Although there is heavy lobbying on this issue and it could be the subject of a late amendment.
Q: Can we give a periodic tenancy now so we don’t have to do all of them on the day the law is implemented?
A: Landlords can always give a periodic tenancy, a fixed term is not mandatory. And there is no point in giving tenants a long fixed term as it will be converted to a periodic tenancy when the RRB comes into force, which will probably be before the end of 2025. But you won’t have to do anything to convert the tenancies to periodic when the RRB comes into force; this will happen automatically.
Q: How will the portal work if the landlord lets properties in several areas? Will we need to register on the property address or our own address?
A: Landlords will need to register both themselves and, separately, all their rented properties. Further details will be provided in delegated legislation.
Q: If we manage properties ourselves, will we have to provide our home address on the database?
A: I know this is of concern to many landlords. We don’t know the answer to this, it is one of the things that will be set out in the regulations when they are published.
Q: What about registering foreign properties – would it be the same way?
A: This legislation will (in the main) only apply to properties in England. Some parts, such as the anti-discrimination rules, will also apply to Scotland and Wales. But it will not apply to any property outside the UK.
Q: Will we be able to access information about criminal tenants and criminal councils
A: I doubt the government will accept that any of the Councils are criminal! So far as tenants are concerned, landlords and agents will need to carry out careful referencing to avoid inadvertently letting to rogue or criminal tenants. You should also do a financial sanctions search against tenants’ names to see if they are on the sanctions list.
Q: What about Airbnbs?
A: Airbnb is a portal you can use to market properties for rent. The fact that a property has been marketed via Airbnb does not affect its occupation type or your legal obligations as a landlord. So if, for example, the property is let under an assured tenancy, then yes, it will be subject to the act. The same as all the other assured tenancies. Renting it via Airbnb will not change this. See also my series of articles on Airbnb.
Q: Re details of past evictions required for the database. Please elaborate. Does it mean evictions SINCE the D’base has been in place or listing all previous evictions from the property BEFORE the dbase came into effect?
A; This is currently unknown and is one of the many things which will be set out in regulations in due course.
Q: Re no fixed terms – are tenants bound by a minimum of 6 months initially? Or can they simply up and leave after 2/3 months?
A: As the act stands at the moment, tenants of assured tenancies will be able to give two months’ notice at any time, and there is no minimum period they have to stay. So if they want, they can serve their tenants a notice to quit the day after they move in. The government’s reason for this is so tenants will not be forced to stay in (for example, substandard) accommodation against their will.
Q: If a challenge to a (Penalty Charge Notice) PCN fails – can you appeal to the First Tier Property Chamber?
A: Yes, there is the right to appeal. Local Authorities will also need to give landlords a ‘notice of intent’ before serving any PCN.
Q: Can you advise if HMOs will be exempt from accepting children as most HMO rooms have a single occupancy stipulation, and introduce a safeguarding issue
A: So far as I can see, there are no exceptions for HMOs under the Act regarding the discrimination rules or anything else. However, if a property were a one-room HMO then it would normally be reasonable to refuse to accept a tenant with children. Otherwise, this would almost certainly breach the mandatory bedroom sizes rules for HMOs.
Q: (Re maximum rent and prohibition against rental bidding) So you can state the max rent will £800, but applicants are free to make an offer under this if they wish? I presume the clause is to stop an increase in rents above a figure not below?
A: Yes, landlords will be able to agree a lower rent than the proposed rent in the property advert. However, it will be illegal to accept a higher rent,.
Q: Presumably, all the ‘guidance’ that will put the meat on the bones of the RRB will all come out at the same time? If it comes later, then how is a LL supposed to know what to adhere to?
A: Not all of the RRB will come into force at the same time. Guidance will need to be published for the parts that come into force immediately. So this will include the transition regulations and the new prescribed terms for tenancy agreements. However, regulations for the parts of the bill that come into force later will be published when they come into force, or maybe shortly before.
Q: What can be done about tenants giving notice on day one for a 2-month notice, therefore setting up a short let and getting a property at a cheaper rate than Airbnb rates for example?
A; Landlords will need to be on the watch for this when selecting tenants. Tenants should be asked how long they intend to stay, and landlords should be alert to any signs that they might be intending to move out quickly.
Q: Given Gov’t history with IT systems, will the Bill come into force only when the database etc are ready, or will it be bill first and then tech whenever?
A; The government have indicated that they wish to implement the parts of the bill which abolish assured shorthold tenancies along with section 21 no fault evictions, and also which convert tenancies to periodic tenancies, within a short period of time. Other parts of the bill will come into force when the government is ready to implement them.
Q: Is the government’s model AST a suitable free template?
A; Not in its current form, although no doubt it will be amended at some stage. However, I would recommend that landlords use a tenancy specifically drafted for landlords, such as the Landlord Law tenancy agreements or those provided by Propertymark or the NRLA. These will include more clauses to protect the landlord’s position. At the moment though, none of us can provide RRB compliant tenancy agreements as we have not seen the relevant regulations.
Q: If a tenant adapts your property and then leaves, can you ask them to put it back to the same condition?
A: If they do this with permission, then you will need to make the permission subject to the tenant reinstating the property to its original condition when they go. If they did this without permission, then you will also be able to require this, plus you may be entitled to compensation.
Q: Are contracts provided by tenants such as investment banks exempt from this new law? eg Japanese investmenat banks insist on using their own contracts
A: So far as I am aware, they will not be exempt. You will need to make it clear to them that there are new legal requirements for tenancy agreements, which, if not complied with, can make you liable for a PCN. And refuse to accept them as tenants if they refuse.
Q: What happens when all tenancies become Statutory periodic and the tenant leaves the property before the notice they have to give? At present, under a contractual periodic tenancy, they pay the Council tax until the notice period lapses
A: The RRB amends the Local Government Finance Act 1992 to provide that a material interest will include having an assured tenancy. So I assume that this means that tenants will be liable under the bill for council tax during the notice period.
Q: What is the situation if an existing tenant disagrees with the new terms brought in and argues they did not sign up to those terms?
A: Tell the tenant that both he and you are subject to the new terms, as they are the law. It is not up to individuals to just comply with parts of the law that they agree with. If he objects, he should speak to his MP.
Q: Can you indicate a rent and state that if tenants have pets there is an additional rent of £x per tenant?
A: No, the proposed rent in your advert is the most that you can charge. However, you can say that the proposed rent will be for tenants with pets and tenants without pets will pay a lower rent.
Q: Will the new tenancy terms and rent reviews affect regulated tenancies?
A: I suspect not. New laws tend not to affect Rent Act protected/regulated tenancies. Although landlords will need to join the redress scheme and register for the database.
Q: How about tenants without income. Now you either ask for guarantor or 6 months rent upfront? Will 6 months’ rent upfront be banned?
A: Yes. It has been pointed out to the government that this could seriously affect tenants with a poor credit history who may struggle to find any landlords willing to accept them.
Q: What is the position on costs at the tribunal if the proposed rent is ordered or not allowed?
A: Costs are not normally awarded at Tribunal.
Q: If I choose to charge a peppercorn rent to a friend, will there be any adverse consequences?
A: Only to your bank balance! But I don’t see any reason why you can’t do this.
Q: ( Re ground 8 repossessions not being available where tenants are in receipt of benefit) How will the landlord know if their tenant gets universal credit?
A; No doubt the tenant will notify their landlord when he serves the section 8 notice.
Q: Before, an AST typically only allowed viewings in the last two months of the agreement. Presumably, moving forward, sales viewings can now shortly take place on day one under the new (ill-thought-out) laws??
A: This is something we will have to consider when drawing up new RRB compliant tenancy agreements. I suspect that a clause allowing viewings during the tenant’s NTQ notice period will be used.
Q: Are joint and several contracts still going to be legal?
A: Yes. I can’t see any reason why not.
Q: Can you take 6 months rent advance from overseas students?
A: No. Rent in advance is forbidden, save for 1 month’s rent in advance once the tenancy agreement has been signed and both parties are committed.
Q: Will the pet insurance be in the name of the landlord? If so, how will claims be handled in the event of disputed ‘damage’, as the tenant will have to pay the excess
A; This will no doubt be set out in regulations or in the insurance policy terms and conditions.
Q: (Re allowing pets) Is it ONE pet or multiple pets?
A: It depends on the circumstances. Often, it will be reasonable to allow one pet but not multiple pets. Permission will need to be given very specifically and refer to a named pet.
Q: Will landlords still be prosecuted and imprisoned if tenants deny access?
A: Depending on the charge, landlords will normally have a defence if tenants refuse access. If a landlord is ever convicted of an offence, when this was due to tenants refusing access, the conviction should be appealed.
Q: What about when you are selling a property? Can you serve notice to a tenant?
A: There will be a new possession ground 1A, which can be used if you want vacant possession to sell. Or you can sell the property tenanted as an investment property.
Q: Ground 6A – can you use this if T refuses access for inspections/gas certs/elec certs etc?
A: Ground 6A is for social housing landlords. Landlords would be able to use ground 12 (breach of a tenancy agreement term) but would be best advised to apply for an injunction first. Note that our forthcoming Property Access Kit will contain guidance on both of these procedures
Q: (Re landlrods being unable to relet properties within 12 months of the possession notice if obtained to let to a family member or for sale) What happens if a family member moves in but subsequently serves a NTQ within 12 months?
A: I am not sure, but the landlord would be advised to leave the property empty until the end of the 12 month period.
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That is the end of the very lengthy list of questions! Hopefully, it will be helpful for readers.
If you have any comments on the questions or my answers, please put them in the comments section below.
The post Here are answers to delegates questions at my recent webinar on Renters Rights Bill compliance, appeared first on The Landlord Law Blog.
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