The date of implementation of the Renters Rights Bill is getting closer, and many landlords are wondering what they should do to prepare for this.
Here are seven critical steps you should be taking now:
1. Check your tenancy/occupation type
Most of the bill will only affect English assured and assured shorthold tenancies under the Housing Act 1988. The vast majority of tenancies in England will be assured shorthold tenancies. But is YOUR property occupied under an AST?
You need to check this and make sure if there is any doubt. Our Tenancy Trail can help you do this.
If your tenancy is not an AST, though, this will not let you off the hook entirely. You will probably still need to sign up to the Landlord Redress Scheme and register on the Landlord Database.
2. Check your tenancy agreement
At the moment, many landlords will get tenants to sign a new tenancy agreement at ‘renewal’. If tenants are unwilling to do this, the threat of a Section 21 eviction (even if not specifically mentioned) will normally encourage them to sign. Even if they don’t want to.
However, once the new act is in force, all tenancies will convert to periodic assured tenancies. So there will be no ‘renewals’. Plus, section 21 is to be abolished. It may therefore be difficult to get tenants to sign a new agreement if they do not want to. As is the case now with protected tenancies under the Rent Act 1977.
I would suggest, therefore, that you review the terms of your tenancy agreement to see if it covers everything necessary. If not, try to get a new tenancy agreement signed up now.
3. Review the rent
Although the general view of landlords is that they are a greedy lot racking up the rent mercilessly whenever they can, in fact, many landlords fail to increase the rent for years at a time.
They then find that they are failing to make a profit or even enough to cover their outgoings, and make a fairly large rent increase. This then puts their tenants into difficulties and reinforces the ‘greedy landlord’ theme.
This is why our advice for all landlords is to increase the rent little and often, to keep up with inflation.
This is going to become more important once the Renters’ Rights Bill becomes law. As you will only be able to increase rent via the statutory notice procedure. Which can only be used a year.
It is a good idea, therefore, for all landlords to review their rent now. If it is too low, bring it up to the market rent. It will be easier for you to increase the rent now, before the new act comes into force.
Going forward, once all rent increases are via the statutory notice procedure, challenges to landlords’ proposed new rents will be on the basis of the ‘market rent’.
It will be important, therefore, that landlords collectively ensure that rents keep up with inflation. Otherwise, this may result in the First Tier Tribunal awarding lower rents to landlords when rent increases are challenged.
4. Check the condition of your property
There is currently a lot of legislation regarding the condition of rental properties. The two most important being
- Section 11 onwards of the Landlord and Tenant Act 1985 on disrepair, and
- The Homes (Fitness for Human Habitation) Act 2018
Together with the Housing Health and Safety Rating System inspection process, which is set out in the Housing Act 2004.
However, at the moment, unless your property is an HMO and subject to the HMO Management Regulations, a Local Authority cannot immediately penalise you for the poor condition of your property. Not until after they have carried out an HHSRS inspection and ordered you to carry out work found necessary by the inspection. It is only if you fail to comply that they can take enforcement action.
As you may have heard, the Renters Rights Bill will be setting a new decent homes standard. What is less well known is that landlords will be obliged to comply with at all times. As is the case now with the HMO Management Regulations. This means that if Local Authority inspectors turn up at your property and find it is not compliant with the standard, they can immediately start penalising you as well as ordering you to fix whatever the issue is.
So once this part of the act is in force, to protect your position, you will need to ensure that your properties are compliant at all times. Critically, you must also be able to PROVE compliance. For example, to protect your position if tenants maliciously damage the property and then report you to the Council. Remember, if you can’t prove something, evidentially it did not happen.
The decent homes standard will not come into force for some time. So you should take advantage of this period to check your properties carefully and do any necessary works to ensure that they are (if necessary) brought up to standard.
Note that landlords will also need to ensure that their property meets the minimum energy efficiency standard of EPC band C before the anticipated compliance deadline of 2028.
5. Set up a program of regular inspections
In view of the increased regulations coming for landlords, it is important that you are kept aware of the condition of your properties. This can only be done by setting up a regular inspection program.
Reasons why this is critically important include:
- Keeping you informed of the occupiers of the property so you can guard against unauthorised HMOs being created or occupation limits in HMO licenses being exceeded. Both of which can make you vulnerable to penalties
- Allowing you to check that you are fulfilling your legal obligations – such as maintaining the condition of the property to a proper standard.
- Allowing you to check that the tenants are using the property properly and have not carried out any unauthorised alterations or changes or damaged the property in any way
- Making sure that nothing is being done to adversely affect your insurance. Be aware that increasingly insurance companies are requiring regular property inspections as a condition of insurance cover. Check to see if this is the situation with your insurance. (NB we have a free insurance mini course here).
Note that if you are unfamiliar with conducting property inspections, our Property Inspection Kit (available free of charge to all Landlord Law members) will serve as your detailed guide. Our Audit Kit is also a useful guide to help you do an annual check of your properties to make sure you are compliant with all rules. Both of these are available to all Landlord Law members as part of their membership entitlement.
6. Set up a record system
It is increasingly important that landlords not only comply with regulations but are able to PROVE that they are compliant.
This means not only keeping all relevant documents – such as tenancy agreements, gas safety and other similar certificates, receipts for work done and purchases made and the like, but also keeping records of things done. For example:
- All telephone calls
- All meetings
- All reviews of the property, recording the things considered and why you took the decision you did
It does not matter whether the records are physical and kept in a box or filing cabinet, or are online and kept on Dropbox or Google docs. The main thing is that you have them and know how to access them easily.
They will be essential if you need to prove compliance to the Local Authority or need to evict your tenant.
Further guidance is available to Landlord Law members on this important topic, plus we have handy telephone attendance notes and our diary sheet (for recording meetings) which you can use for your record keeping.
7. Ensure that you are kept up to date with legal developments
At the time of writing, the final form of the Renters Rights Bill is not known. We know mostly what it will contain, but there could be last minute amendments.
As a landlord, is it really important that you are aware of the new legislation and what it will mean for you.
The following will help keep you up to date:
- This Landlord Law Blog (sign up to get updates here)
- The Landlord Law Weekly Bulletin
- The Nearly Legal Blog
- The Independent Landlord website and newsletter
- The LandlordZone News site
- Property Industry Eye
- Landlord Today
- Property 118
Magazines include Property Investor News and Your Property Network.
My Landlord Law membership site for landlords (and letting agents!) has extensive guidance, and we will be updating all our online information and landlord documentation in time for when the bill comes into force.
And finally
The changes in regulations are coming. The bill is expected to receive the Royal Assent some time in 2025 and will come into force a few months later.
Many landlords with good tenants whose properties are in good condition will not need to worry about this too much. However, even if you are sure that your property is compliant, you should follow the guidance above and keep detailed records.
See my other posts on the Renters Rights Bill here.
The post Landlords: Are You Ready for the Renters Rights Bill? Seven Things to Do Now appeared first on The Landlord Law Blog.