The Renters’ Rights Act will bring drastic change to the sector on May 1st and beyond.
On that date landlords will have to cope with the abolition of Section 21 ‘no fault’ evictions, as well as the introduction of periodic tenancies and restrictions on rent increases.
Further down the line the Private Rented Sector Ombudsman will look to resolve disputes with landlords and tenants, while the Decent Homes Standard will be introduced across the private rental sector.
Early stages of the act
Councils were granted increased powers to investigate landlords at the end of December, giving them the power to enter residential properties to investigate illegal evictions, check the condition of a property, and/or check an investor’s landlord database registration status.
Officers no longer need a warrant to enter business premises if they want to gather relevant documents about the landlord’s property.
While councils are going to be under the microscope more moving forward, increased scrutiny has already started.
Prepping for Section 21 deadline
If landlords have a bad tenant they can still serve a Section 21 eviction notice before May 1st. With this deadline looming, it’s likely there’ll be a swathe of evictions in March and April.
From May landlords will need to use the Section 8 evictions process, so they are advised to be familiar with its workings, as well as new grounds for eviction coming into force as part of the Renters’ Rights Act.
Section 8
Using the Section 8 route after May, landlords can evict a tenant if they are in three months’ arrears, engage in anti-social behaviour, or breach terms of the tenancy. Eviction can also be served if the landlord wants to have a family member move in or sell the property. In the latter instance, they cannot re-let the property for 12 months.
Using Section 8 could be a slow process, as it’s likely the courts could struggle with more cases in the immediate aftermath of the ban. The government has targeted alleviating this issue by digitising the court system, as well as using the Private Rented Sector Ombudsman to resolve disputes between tenants and landlords, though any improvements are likely to be gradual.
Vetting tenants
Landlords need to be professional when vetting tenants more than ever, seeing as it will be harder to evict a rogue tenant after May. Therefore they need to be thorough when checking references and credentials. Landlords who want to use an agent need to do their homework and use one with a strong track-record.
Update tenancy agreements
Landlords should update tenancy agreements before the changeover from assured shorthold tenancies to periodic on May 1st.
With new tenancies landlords will need to set out: how much the rent is and how frequently it must be paid, the deposit sum and where it will be protected, the notice periods for both parties, the responsibilities of landlord and tenant, how the landlord will handle repairs, rent reviews and how the landlord will communicate.
Landlords are required to send existing tenants a UK-government issued summary of how things are changing by April 1st.
Check housing standards
Landlords should review the quality of their properties more than ever, seeing as councils have more power to crack down on poor quality homes.
While it’s uncertain when the Decent Home Standard will be fully rolled out, councils are likely to be hands-on when it comes to tackling category 1 hazards. Breaching the standard could incur a fine of £7,000, rising to £40,000 for serious or repeat offenses.
Log communications
It makes sense to be organised and keep a log of log communications, repairs and the inspections. This could come in handy if landlords have to serve an eviction notice with a tenant or end up in another dispute, which could happen more frequently due to the act.
Raise rents
It’s likely a number of landlords will raise rents before May, because doing so afterwards is going to be more of a headache. Once the regulations come into force they need to fill out a Section 13 form to apply for an increase.
After that date landlords need to be careful not to overcharge tenants, by looking at what’s normal in their area. If they ask too much they could be challenged at a tribunal, which could alienate tenants and waste time.
Long prep time
The changes are a long time coming, so they shouldn’t come across as too much of a shock to the landlord community.
Then-Prime Minister Theresa May announced that Section 21 evictions would be scrapped as a Manifesto pledge all the way back in 2019, while multiple Conservative administrations have dragged their feet on going through with the ban.
Being able to evict tenants without a reason was always going to be problematic long-term, so landlords need to get used to this new normal, and in a few years’ time the shock should wear off.
