Renters' Rights Act: 20 Questions We Are Asked All The Time

Section 21 has gone, fixed-term tenancies have been abolished and the rules on rent increases have completely changed. So what does that actually mean for your rental property?

Since the Renters' Rights Act went live, the same questions keep landing with us. In this episode Simon Bacon and Ian Sadler answer the 20 questions landlords are asking most, in plain English: what happened to existing tenancies, how Section 13 rent increases work, which possession grounds you will actually use, whether you can still refuse pets or take a guarantor, and the one habit that protects you more than anything else under the new regime.

Simon Bacon is the owner of Preferential Properties, a lettings and sales agency serving Sutton Coldfield and North Birmingham. If any of these questions apply to your property, get in touch at prefprop.com for a no-obligation conversation.

Chapters

0:22 Welcome: the 20 Questions mini-series 

1:11 Can I still ask for a 12-month fixed term? 

1:40 What happened to my existing AST? 

3:06 Do I need a new tenancy agreement? 

3:17 How do I increase the rent now? 

5:32 Challenging a rent increase: the tribunal and the fee 

7:14 Selling up: ground 1A and notice periods 

8:20 Moving back in: ground 1 

8:52 Has Section 21 definitely gone? 

9:27 Rent arrears and persistent late payment 

11:33 Guarantors and pets 

12:28 The National Landlord Register: has it started? 

14:40 The biggest risk for landlords under the Act 

15:16 The biggest misconception about the Act 

16:41 Other grounds and their timescales 

20:50 The 5 grounds that will matter most 

 RentersRightsAct #Section21 #UKLandlord #BuyToLet #PropertyPodcast #LandlordAdvice #LettingsAgent #PropertyInvestment #SuttonColdfield #Birmingham #TenancyLaw #PropertyManagement #UKProperty 

______________________________

Get in touch with Simon for all your property needs. 
www.prefprop.com

E: simon@prefprop.com

T: 0121 2402244

Transcript

SPEAKER_01 0:01

Hello and welcome to the All Things Property Podcast with me, Simon Bacon. Me is Amber. We're about to introduce a new set of podcasts, 20 questions. So in this series, this mini-series, we're going to go through the 20 questions that landlords, tenants, investors, applicants, sellers, buyers are interested in knowing and are generally asking. So we hope you find this mini-series useful. Welcome to the All Things Property Podcast with me, Simon Bacon of Preference Properties. Every week, Ian Saddler and I will delve into all things property. We'll guide you through with friendly, no nonsense advice. So Ian, on to the first set, which are the 20 questions landlords are asking since the Renters Rights Act went live. Exciting stuff. Yeah, absolutely. No doubt you've had a far a fair number of questions from landlords and tenants alike, probably.

SPEAKER_00 0:59

There they all are.

SPEAKER_01 1:00

Excellent.

SPEAKER_00 1:01

Shall we start? Right, number one. In at number one. Can I still ask a tenant to sign a new 12-month tenancy? No, you can't.

SPEAKER_01 1:09

Fixed-term assured shorthold tenancies have now been abolished. So all new and existing tenancies are called assured periodic tenancies with no effectively no end date.

SPEAKER_00 1:27

Right. Fairly succinct to the point. Thank you. Number two, what happened to my existing AST?

SPEAKER_01 1:34

Yeah, we've had lots and lots of questions about this one. So the situation is that existing ASTs, assured shorthold tenancies, automatically converted into assured periodic tenancies on the 1st of May this year. However, the caveat was that in order for that to happen, you had to serve the Renters Rights Act information sheet. Now, I don't know about you, but I had lots of questions from landlords saying, have I got to send this sheet as well as you, or is it just you that has to send it? The legislation was a little ambiguous, but the ethos, I suppose, the what the legislation was was trying to say was or was saying was you have an obligation to make sure that the tenant receives a copy of the information sheet. So whoever sent it, it had to be sent as the letting agent responsible for the property, then it made sense for us to make sure that we've we ensured that landlords were compliant. So we our advice to landlords was we would send it and we copied them in so they were compliant. Do I need to issue a new tenancy agreement? No, existing tenancies, don't want it to be too short. Existing tenancies continue automatically under the new regime.

SPEAKER_00 3:05

Right. Okay, moving on to a really important point: how do I increase the rent?

SPEAKER_01 3:12

Okay, so since the introduction of the act, you have to serve a section 13 notice, form 4A, and the upshot of that is you have to give at least two months notice to the tenant.

SPEAKER_00 3:29

And to elaborate on that a little bit, giving two months notice might take you to the date of service of the notice to two months after that, but then the rent increase can't take effect until the next payment date. Yes, that's right. Yeah.

SPEAKER_01 3:42

So you can serve it in you know two months and twenty nine days, but it's it only becomes effective from the anniversary date of the tenancy.

SPEAKER_00 3:53

Okay. For A, how often can I increase the rent? Once every 12 months. Right, not much more successful. And number six, is the rent increase linked to inflation? No.

SPEAKER_01 4:08

Rent increases are based on open market rent, not inflation, mortgage costs, or landlord expenses. And this is one we've had lots and lots of questions as to why is rent not being, you know, you're putting the rent up by this, but the cost of living is this, inflation is that, so why are you putting the rent up to the state? Two questions. Yeah. Um, and in the past, many tenancy agreements would have been linked to RPI, um, whereas now it's very much changed to market local market rents.

SPEAKER_00 4:42

I have to say, I'm surprised it didn't include in the legislation a link to CPI or inflation. If they're looking to protect tenants from unscrupulous landlords hiking the rent up as much as possible, they could have done could have done that. They could have done, but it that will probably link into your next question, I would imagine. Which is, funnily enough, what happens if the tenant challenges the increase?

SPEAKER_01 5:06

Okay, so now the situation is that tenants have the ability to apply to a first-tier tribunal if they think the proposed rent is above the open market rent. Um, so from the 1st of May, the tenant would have to pay or will have to pay a £47 application fee to make that referral. The tribunal will then assess the open market rent for the property. What it is worth knowing is it can't set the rent higher than the amount proposed by the landlord. So effectively, what that does mean is when you are serving your Section 13 notice, you have got to make sure that you are basing your rents and showing how that rent has actually been set. Because if the tribunal comes back to you, you've got to be able to prove what the local market rent is for the property at the point that you were making that request.

SPEAKER_00 6:03

Okay. Have you excuse me, have you had any challenges? Uh that's not a question, but it is, but yeah, I have.

SPEAKER_01 6:12

Not where they've gone to the tribunal because obviously what you hope with the relationship you have with tenants is the first thing they do is they contact you and say, I've had my rent increase. You know, is there any possibility that the landlord will reconsider this? Yeah. And that's but that's always been the case with with rent increases. We've always, you know, considered those and have a chat with the landlord, but generally speaking, um, you know, you have to look at personal circumstances as well to a certain extent.

SPEAKER_00 6:43

Okay. Number eight, can I still recover possession if I want to sell? Yes.

SPEAKER_01 6:49

Ground 1A allows possession where the jet landlord genuinely intends to sell the property.

SPEAKER_00 6:58

Do you want to discuss the limitations of remarketing if sale doesn't come through at this point? No, not really. Okay.

SPEAKER_01 7:07

Well, I think there's probably going to be a question uh a bit later on.

SPEAKER_00 7:11

Oh, I know that because I put the questions together. Anyway, my mistake. So what notice appear what notice period applies if I want to sell?

SPEAKER_01 7:19

I say, so ground 1A requires four months' notice. The notice cannot generally be served during the first eight months of the tenancy, and possession cannot be obtained within the first 12 months of the tenancy. So interestingly, we talk about new tenancies being having no fixed term, but as long as the tenant abides by the terms of the tenancy, effectively you are creating almost a 12-month tenancy from the landlord's perspective, but not from the tenant's perspective. Can I move back into my property? Yes. Again, the notice period here is four months to serve the notice. 11. Has section 21 definitely gone, really? Yes. Yes, section 21 has been abolished. Possession must now be sought using a valid statutory ground. However, the caveat is that any section 21 notices that were served in advance of the 1st of May are still valid, and the landlord is able to pursue court action if they don't vacate.

SPEAKER_00 8:50

Okay. What if my tenant owes serious rent arrears?

SPEAKER_01 8:55

Okay, so now we're into the I guess the rent arrears type issues. Um so serious rent arrears, ground eight remains available when the tenant owes at least three months' rent. That's increased from the old old time frame. So it's now three months rent. The notice period here is four weeks. Yeah, this is an interesting one, isn't it? Because there's there's never really been a ground for uh what what I would say, you know, persistent late payers. Um so here they've introduced persistent delay in paying rent, can support possession proceedings under ground eleven, even if the tenant subsequently clears the arrears.

SPEAKER_00 9:42

Yeah, that's a bit harsh, isn't it? I think.

SPEAKER_01 9:44

It is, but it's a discretionary ground.

SPEAKER_00 9:48

Okay. How many late payments are needed before I can rely on ground eleven? None.

SPEAKER_01 9:55

Uh there is no fixed number. Obviously, if you're going to court on persistent uh late payment, the court are going to consider the overall patent of late payment and the evidence available. And as I said, it is going to be a discretionary ground. So that's all a bit woolly, isn't it? Yes, it is. Yeah. It'd be interesting to see um what the precedents are for any court cases where they make those judgment as well.

SPEAKER_00 10:20

It won't be the main set it. It won't be the main ground for possession that's we're supporting, won't it?

SPEAKER_01 10:25

But it's still a useful ground to have where a tenant persistently pays their rent or every few months they're you know well late with their rent. It is still you know an option that uh a landlord can say to the tenant, look, you need to get your rents back on track because we do have the ability to to go to court. And I think if you go end up going to court and you've shown you know you've you've done everything possible and you know to try and mitigate that, then you know I I would be surprised if the courts don't award some level of possession. Can I still use a guarantor? Yes, you can. Uh the act does not prevent landlords requiring guarantors where appropriate. Short and sweet. Can I still refuse pets? Yes. The short answer is yes. A landlord can refuse a pet request, however, the caveat is when there is a reasonable ground for doing so, any refusal must be reasonable, normally provided within 28 days. Okay. And in in terms of that, you know, there are certain conditions, head leases where you're not allowed, where that the head lease states that the owner is not a permitted pet, that is a valid ground for a landlord um you know rejecting a tenant's pet request.

SPEAKER_00 11:55

Next one, a really important for landlords. This one, has the National Landlord Register started yet?

SPEAKER_01 12:00

Now I don't know about you, but I've had a fair number of questions about this. How, when, where, do I have to do it now? And the answer is no. At the current time, the National Landlord Register has not yet gone live for registrations. So the Act created the framework for the register, but it has not yet been opened, I suppose, for landlord registrations. Further details, including registration dates, requirements, fees payable, are still awaited, and rest assured, as soon as that becomes available, I'm sure that we will be in touch to let you know that. So please don't panic about that. The advantage of being with us is we will keep you up to date with compliance. Do you have any inkling as to the level of fees? No, none at all. Absolutely none. I might the only inkling I've got is it's going to likely to happen towards the end of this year. Right. And what will landlords need to do when it goes live? Well, the understanding is that landlords are going to be required to register themselves and their rental properties on the register and keep the information up to date. Now, obviously, the final requirements are still to be confirmed, but landlords should expect to provide details of the property ownership, compliance documentation such as gas safety certs, EPCs, electrical installation condition reports, and I imagine for those properties that sit within selective licensing for local authorities, they'll probably have to uh provide the selective licence details as well.

SPEAKER_00 13:42

And what form would the details about property ownership? No idea. No idea at the moment.

SPEAKER_01 13:48

Not even an inkling? Not even an inkling, no. And you know, I've searched and looked, but you know, it's um yeah, I I haven't found any any real detail yet. I'm sure that as soon as it comes out, then uh we will be told.

SPEAKER_00 14:04

This is a big one. What is the biggest risk for landlords under the new act?

SPEAKER_01 14:09

Um well I think if you look at the questions I've just answered, it's about record keeping, evidence, things like rentaries, late payments, notices, inspections, communication. That that is the upshot of the legislation, that there's compliance, and in order to ensure you are compliant, you have to have, you know, really good record keeping and documentation.

SPEAKER_00 14:41

Okay. And what is the biggest misconception about the act?

SPEAKER_01 14:46

I think that landlords can no longer regain possession. That's been the the biggest concern, I think, that landlords have come to me about that they think that under the act they're not in a position where they can regain possession. Now, the the act doesn't stop possession, so landlords can still get possession back of their property, but they must rely on a valid statutory ground, excuse me, and follow the correct procedure. So if a landlord wants to sell, there are grounds from doing that. If a tenant is not paying their rent on time, or there are problems with their rent, there are grounds for that. If there are um you know other issues, there will be grounds for that. But the again, the upshot is landlords generally don't serve notice or didn't serve notice on tenants just because they decided they wanted to serve notice. The real change is that there are very specific grounds now that landlords are able to recover possession of their property.

SPEAKER_00 15:52

So it's formalised and improved the whole structure really, hasn't it? Yeah. All those misconceptions about it being the death of the rental market were cobblers. Well, certainly I would have said so. Okay, this is really interesting. What are the grounds and timescales for other notices?

SPEAKER_01 16:12

Okay, so if I just quickly rattle through them, ground one, landlord or qualifying family member intends to move into the properties there only or principal home. Mandatory ground this one, four months notice, and you can't obtain possession within the first twelve months of the tenancy. Correct. Next one is ground one A. Um, a landlord generally intends to sell the property. Again, mandatory ground this one, four months notice and can't obtain possession within the first 12 months of the tenancy. Ground eight, which is serious rent arrears, word serious, at least three months arrears at service of notice and at hearing. That's a mandatory ground as well and four weeks' notice. Ground ten is some rent arrears. Any amount of rent arrears outstanding at service of notice and hearing. That's a discretionary ground, again, four weeks' notice. What you might find is that if you are taking someone to court on a serious rent arrears ground, you may end up issuing a s a section eight notice and a section ten notice. Or section eight notice for ground eight and ground ten. Because if the tenant suddenly brings their rent below three months on the day that they go to court, that would negate the ground eight notice. Whereas if you've also sound served a ground ten notice, you still have the ability to uh the judge to to make an order. It's all a bit uncertain, though. It is, but it you know, it's it's it's the way that it's always been. It's just the um the amount of arrears has has been different, it has gone up. And then finally, ground eleven, which is a persistent delay in paying rent, even if arrears are subsequently cleared, again, a discretionary ground and four weeks notice.

SPEAKER_00 18:24

Okay, the answers are fine. I I'm gonna have to deduct you a couple of marks for not addressing the remarketing for rental of a property on failure to sell. How do you mean? You know full well what I mean. If you put the property on the market and you don't sell it within the first 12 months, you can't order you cannot remarket the property for rent. That's to be a 12 month period. Yeah, so you you're confused, aren't you? A little bit. That's why I'm asking you the question. Okay, she's answered it.

SPEAKER_01 18:54

If if you put your property, so if you serve a ground 1A notice where the landlord intends to sell the property, then you can't use that ground, move the tenant out, put the property on the market for a couple of weeks, and then take the property off the market and go, oh, I now haven't managed to sell it, I want to rela let the property. You will be prohibited from remarketing property for lent, for rent. For lent for a 12-month period. So, yes, it's not it's not a ground you would use lightly, it's a ground there specifically if you intend are committed to selling the property. So, if I can perhaps just sum up what this episode is. In terms of notices, let me just clarify that. Ground 1A, I want to move back in. Ground 1A, I want to sell. Those five grounds probably are likely to account for the overwhelming majority of possession claims bought by private landlords under the new regime. So, I hope you found these questions useful and have answered your questions. And if you have any more, then please do continue to keep in touch with us. Thank you very much. Thanks for tuning in to this week's episode of the All Things Property Podcast. If you found this episode useful, don't forget to subscribe, like and share. These things really help us reach the people who need to hear this advice. See you next week.