This is a question to the blog clinic from Amanda (not her real name) who is a landlord in England.

My tenant has refused to sign the new tenancy agreement with an increase of rent from £1100 per month, which has not been increased for 7 years, to £1400 per month.

The new rent is still under the market rental.

She is stating that she got advice from a lawyer and that I have illegally increased the rent. As my mortgage has increased by 120% I have now no option but to sell the property. Where do I stand legally?

Answer

It’s not illegal to ask a tenant to sign a new tenancy agreement at a higher rent, so  you have not done anything wrong.  But tenants don’t have to sign it if they don’t want to.

If the agreement is not signed, then the tenancy will continue as a periodic tenancy.

Increasing the rent

If you still want to increase the rent, you can do this via the statutory notice procedure. Tenants can challenge this by referring it to the First Tier Tribunal but they will only reduce the rent if they consider it is above the proper market rent. So, as your rent is still below this you should be safe.

Indeed, the Tribunal may increase the rent as their job is to set the rent at the market rent. Which is why most tenants don’t challenge rents increased in this way.

This will change once the Renters Rights Bill is in force by the way as then the Tribunal will only be able to review rent down, they won’t be able to increase it. But the Renters Rights Bill is not in force yet.

Selling the property

If you decide to sell the property, this is always an option. You have a choice

• You can sell the property with the tenants still in situ as an investment property, or
• You can evict the tenants and sell the property with vacant possession.

If you decide to sell with vacant possession, you can evict the tenants using the section 21 procedure, but this will take some time. If you want to quick sale, it will have to be with the tenants still in situ.

There are some companies which specialise in purchasing tenanted properties, but you may not get as good a price as you would with selling with vacant possession.

Further information

We have guidance on Landlord Law for our members both on increasing the rent via the notice procedure and on eviction procedure.  Find out more about membership.

The post How to increase rent when the tenant refuses to sign a new tenancy agreement appeared first on The Landlord Law Blog.

I was interested to read on Property118, an article stating that the Renters Rights Bill is not about tenants but creating a ‘council cash windfall’.

That’s right in a way, but it’s a very landlord-centric way of looking at things.

The problem for local authorities right now

It’s well known that many, if not all, Local Authorities are finding it difficult. They have suffered massive reductions in their income through austerity, which have not yet been made up.

Further, they are suffering further financial losses by having to provide housing for all who are evicted who come within the definition of ‘priority need’.

This includes all tenants with children (or where the applicant is pregnant) who have been evicted under the no-fault section 21 procedure – however appalling their behaviour.

Indeed, this is one of the reasons why landlords use this procedure – because it means that the Council will have to find these tenants somewhere to live once the possession order has been made and (in most cases) a bailiff eviction date has been set.

In their current cash-strapped state, Councils are in the difficult position of being unable to avoid this but at the same time being unable to afford it.

The result is several councils serving section 114 notices (which is the Local Authority equivalent of being bankrupt) with many more on the brink.

Let us remind ourselves why we need Councils to be solvent:

• They provide rubbish collection/waste management services
• They provide (or are supposed to provide) social care
• They provide state schools and often also higher education institutions
• They provide leisure and cultural services (including youth clubs for young people most of which have sadly been shut down due to funding issues)
• They monitor environmental health, regulate pollution and ensure compliance with environmental regulations
• They are responsible for dealing with emergencies such as flooding, terrorist attacks and other disasters
• They provide support services for businesses
• They are responsible for improving public health

These are all massively important services that affect the lives of everyone living in their area.

Is it right that they should be put at risk by having to rehouse tenants, many of whom are being evicted for wholly legitimate reasons, which are hidden behind the ‘no fault’ eviction procedure?

In his talk to our Renters Rights Bill Conference (see the extract here) Justin Bates KC pointed out that in 2022-23, Councils spent over 1 billion pounds on temporary accommodation for homeless people. This is a huge amount of money which councils simply cannot afford long-term.

Something had to be done.

What the Renters Rights Bill will aim to do

The abolition of the no-fault section 21 evictions

This will mean that in all cases of tenant eviction, the reason why the tenants are being evicted can be seen.

• If they are being evicted through no fault of their own, then their rehousing entitlement will continue. For example, if their landlord wants the property back to sell or live in themselves – both of which will be grounds for eviction under the new law.
• If however, they are being evicted because of their poor behaviour, then I suspect that the many families patiently waiting on the local authority housing waiting list will agree that it is unfair that they should ‘jump the queue’.

The increase in Local Authority enforcement powers

There are two main reasons why people have to suffer sub standard housing:

• The fact that they can be evicted without cause under the no fault section 21 eviction procedure if they try to enforce their rights (this is known as retaliatory eviction)
• The fact that Local Authorities have signally failed to do proper enforcement work.

The first items will, the government hopes, be at least partly resolved by the abolition of section 21 and the building of new homes.

The second item will, they hope, be resolved by the enhanced powers for Local Authorities under the Renters Rights Bill.

There are a number of parts to this:

Making it mandatory for Local Authorities to enforce the legislation in their area.

At present, this is not the case, allowing Local Authorities to save money by doing no enforcement work – which at the moment mostly involves bringing costly prosecutions in the Magistrates Courts.

Expanding the number of offences for which they can serve Civil Penalty Notices.

In most cases, the fine can be up to £7,000 but for some more serious offences, it can be up to £40,000.

The CPN procedure is better for Local Authorities as it is quicker and involves less bureaucracy, plus they can keep the fine money. Fines imposed in Magistrates’ Courts go to central funds.

Improving their investigatory powers

Rogue and criminal landlords are adept at confusing the issue and evading enforcement action (see more here). These new powers will make it easier for Local Authorities to take action.

And finally

The Property118 article gives the impression that Councils are wealthy organisations, intent on racking up more wealth by unfair imposition of penalties on hapless landlords. I’m sure many Council employees will ‘roll on the floor laughing’ at this.

In fact, many Local Authorities are on the point of bankruptcy and are unable to carry out their functions due to lack of funds.

The damage done to society by rogue and criminal landlords is inculcable. Poor conditions in housing increase sickness, which increases the costs to the National Health Service, which we all pay for through our taxes.

It also has a serious effect on children and their education – which again affects us all as our children are our future.

Surely it is only fair that those who transgress the regulations should pay for any enforcement action that is brought against them?

The Renters’ Rights Bill may not be perfect, and there are certainly some aspects which could do with revision.

However, I think it is laudable that a serious attempt is being made to help Local Authorities carry out their enforcement duties.

If you are a landlord worried about all this

Remember that 100% compliance with the rules will give you 100% protection.  Good landlords should have nothing to fear.

But you will need to take the trouble to learn about the new regime and take steps to comply with it.  My Landlord Law service can help with this.

The post Why we need the Renters Rights Bill to improve Local Authority enforcement appeared first on The Landlord Law Blog.

Another week passes and here we are at another Newsround. Let’s see what has caught our eye this week.

Delays in eviction increase

Government data states that the average time for a private landlord to evict a tenant currently stands at more than eight months in the last quarter of 2024, with an average wait over the past four years being 36.4 weeks or 8.4 months.

The Telegraph claim that the current court waiting times is now 32 weeks and there is huge concern among the private rented sector that this will only get worse once the Renters Rights Bill is passed.

Chris Norris of the NRLA said

If court users are to have any confidence at all in these reforms, we need to see a clear definition of court readiness, minimum performance standards for the justice system and a plan for how those standards will be met. Without this, the bill risks creating a system that fails both tenants and landlords alike.

Even the Justice Minister has admitted that the courts are ‘not where they need to be’, yet the housing minister, Matthew Pennycook claims that the government is working hard to prepare the courts in time for the new Bill which includes digitising the court paperwork stating

We want to reduce demand on courts, with reforms to make sure that only cases with a clear ground for possession will be able to proceed.

Average monthly rental increases

A new record high has been reached on rents outside of London where the average is now £1349 per month. Rent in London is now 2.5% higher than it was this time last year according to Rightmove.

Christian Balshen claims that the Renters Rights Bill will have little impact on the rental market in general but with the banning of rent in advance it will make things more difficult for some tenants to move. But landlords all still want good tenants that are reliable.

Lord John Bird, founder of Big Issue said

Landlords who are already providing quality accommodation for their tenants have rightly recognised that these reforms leave them little to worry about, and the lucrative income that can be gained from the current rental market remains a clearly attractive proposition.

He also said that ‘now is the time to rebalance the landlord-tenant scales of power’ with the abolition of section 21.

Renters’ Rights Bill will put more rentals in need of improvements

A new survey out by ECC Paragon claims that once the Renters Right Bill becomes law many private rental properties will fall below the proposed Decent Homes Standard.  The figures for London are 11.6% of homes but increases significantly to 31% in the North West of England.

As standards are driven up by the new Bill Bekki Leaves of FCC Paragon says

Nobody can argue that the introduction of a Decent Homes Standard is anything but a positive move for the UK rental market and it will help ensure that all  landlords provide a home fit for purpose, with functioning heating, working facilities, and an absence of dangerous hazards.

Local councils will have the authority to uphold and improve standards.

Knowledge gap amongst renters on the Renters Right Bill

Housing Hand, a UK rental service service provider claims out of 1,700 tenants that they questioned, a staggering 69% of renters know nothing about the Renters Reform Bill and 75% are clueless on how it could impact them. Some of their other statistics are quite shocking:-

• 46% are unaware of how deposit schemes work
• 63% do not know how long it takes to get their deposit back
• 34% did not know what a guarantor was for
• 58% of renters did know what they would do if they could not pay their rent
• 33% of renters did know what would happen if they paid their rent late

Graham Hayward of Housing Hand said

There is a significant opportunity here for landlords and others in the sector to work with renters for the benefit of all those involved in the rental process.

Snippets

Government’s HMO plans risk undermining housing supply
Shelter names ‘fearless’ charity firebrand as new chief executive
Rogue landlord left tenant without heating and hot water for a year
Homelessness crisis set to soar as Shelter calls for 90,000 social homes a year
Solar panels to be fitted on all new-build homes in England by 2027
Lords warn court system could take five years to fully digitise under Renters’ Rights Bill

See also our Quick News Updates on Landlord Law

Newsround will be back again next week

The post Landlord Law Newsround #385 appeared first on The Landlord Law Blog.