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No one was more surprised than me when the announcement came to say that the Renters Reform Bill would get its second reading on Monday 23rd October. Between the party conferences and the recess periods, it was very unlikely that it would be added to the list for debate before the new year and yet here we are.
The second reading is, of course, still early in the process and many changes can be made between that and Royal Assent, therefore, I am cautious about raising expectations at this stage despite some announcements that seem to indicate that the government has been listening to landlord representatives, (NRLA mainly) and have now realised the unintended consequences of some parts of the Bill as it was originally drafted. Most notably the removal of Section 21 – no fault eviction which we are now told will be put on hold until the legal system which supports evictions has been updated and is more fit for purpose.
I’ve been around long enough to have seen the to-ing and fro-ing that takes place during the passage of a new Bill and I am not as confident as some of those who have reported on this announcement that we are actually seeing a major change from the Government. I hope to be proven wrong, but until then, I will caution landlords to hope for the best but remain prepared for the worst. In any event, it’s important that we do not mess up our chances of regaining possession via section 21 while we still have that option. I have provided as much information as possible in these three articles:
How to Stay Informed on The Renters Reform Bill
To read the Renters Reform Bill as it stands, before changes following the second reading, visit this link:
Renters (Reform) Bill (parliament.uk)
To follow the progress of the Bill as it travels through parliament visit this link:
Renters (Reform) Bill – Parliamentary Bills – UK Parliament
I would suggest that you do not rely on social media nor even mainstream media to understand what is happening in this important Bill, also read the facts for yourself and make a fully informed decision particularly if you are considering making a major change to your property rental business.
Landlords Have Reacted to News of Section 21 Abolition
I firmly believe that we can reach a stage where good tenants feel secure and good landlords feel confident to continue to invest and this, in my opinion, should be the main aim of a Bill which claims to want more stability and security for good tenants. It’s important to see both sides of this and to understand that many tenants have been evicted since the first mention of losing section 21 hit the headlines because landlords have lost their nerve and were worried that they would be stuck with bad tenants who do not pay their rent, cause major issues inside the rental and in the neighbourhood and major damages to the property. The timing of the increases in the cost of lending didn’t help but many landlords would have tried to hang on if they hadn’t been afraid that they couldn’t remove a tenant in order to sell their properties. In fact, on my Facebook group, there are several stories every week where tenants have been served notice because their landlords want to sell, or where landlords are trying to evict a tenant in order to sell but are struggling for various reasons. Even when they get in front of a judge, some landlords have reported that they are not getting possession for unexplainable reasons.
Two things are coming out of the discussions above.
- Landlords are unable to serve a valid section 21 because they have not met all the legal criteria and therefore, they have only section 8 which requires the tenant to have broken a term in the tenancy. In other words, they have already lost the “no fault eviction” upon which they were relying because they haven’t met the qualifying criteria.
- Tenants, who have been good tenants, are being treated with no respect at all. Landlords who need to sell should go and talk to their tenants and explain, they should try to come to an agreement on timing. On that note I see several Section 21s have been served in the past week with a 2-month notice ending in Christmas week – honestly, it couldn’t have waited a month or two? It’s heartbreaking reading the posts from parents who don’t know how to tell their children that they may be homeless for Christmas, may not be able to go back to their school in January, and may never see their friends again.
Property is A People Business
I am a landlord and I totally understand why some landlords are selling up, but we are in a people business, and we need to consider those people who have been good customers and who have enabled us to be landlords before we put wheels in motion. Speak to them and speak to other landlords you know and help them to find a new home if you can. You will save money and time if you avoid going through the courts and you’ll also avoid the uncomfortable feeling of being “the uncaring landlord”.
Many landlords are angry because local authorities tell tenants to sit tight until the bailiffs come, despite being instructed by the government not to put tenants in that position. Unfortunately, most councils have nowhere to put those tenants for whom they have a statutory obligation to offer a home and therefore they use the legislation which states that if a tenant has made themselves intentionally homeless the local authority does not have to rehouse them – therefore waiting until the bailiff makes them homeless. It’s so unfair on those people and again I feel for the children who will suffer the trauma and humiliation in front of their friends and neighbours.
Another issue in the Renters Reform Bill, which is not so often reported but which will make big changes to our business:
Abolition of Assured Shorthold Tenancies (ASTs) Which are the Basis Upon Which Most Private Rentals are Agreed
The Bill removes the fixed term (usually 6 months) AST in favour of a Contractual periodic tenancy from day one, otherwise known as a rolling monthly tenancy.
As most of us know the private rented market has several sub-markets and this change just will not work for some of those markets whereas for others it won’t make too much difference. The NRLA have made the government aware of the biggest market for which this will not work – STUDENTS
Most student rentals consist of a group of friends renting a property and sharing facilities. They will have a joint contract and will be jointly and severally responsible for rent and damages. Some are all-inclusive others pay their own bills between them. This is a very well-established market that hasn’t changed too much in years and generally, it works well for both students and their landlords.
The Problem With Removing ASTs for Students
- In a joint tenancy when one person gives notice to end the tenancy it ends for everyone
- If one of a group of students decides to leave early because their exams are over and doesn’t want to pay any more rent – at the moment they will still have to pay until the end of the contract – that person can give notice without consulting their housemates and those housemates’ tenancies would also end, possibly in the middle of their exams.
- If all of the tenants decide to stay on for another month or so beyond the end of the academic year, they can just keep paying until they are ready to leave.
- If all of the tenants decide to leave early, they can, and the landlord now has a void that they would be unlikely to fill in the student market.
None of the above works in reality although in theory, the tenants have more control, in reality, if they are planning to move to another house for the following year, they will not know when they can move in, and they won’t have a signed contract to be sure that they even have a house – why? Because the landlord of that house will not know what date the present students will leave. It would create unnecessary chaos in a generally well-ordered market and is an example of theory coming from those who do not operate in the student market.
HMO on Individual Tenancy Contracts
Living in an HMO is a challenge for many people for whom it is the best option from an economic point of view, especially for those who have moved out of their family home, their own homes from a breakup or from self-contained accommodation. Living with a house full of strangers, often with different cultures and/or work schedules, etc., takes a lot of compromise and often a good property manager to ensure that everyone is happy. This doesn’t happen overnight but once a group of people are established most HMOs work very well. Now imagine a new person moving in every month, or even more than one person. That will destabilize the whole “community living” and upend the entire HMO market. Add to that the fact that when a person needs to find a room in another HMO for whatever reason they will have less than a month to view and give notice, which generally will mean that they will be paying two lots of rent for a least some of the time. Why? Because the person leaving the room will only give the landlord a month’s notice at any random time because there is no fixed term, then the landlord will begin marketing the room, etc., and at the end of the process you are well into the month where the landlord will want to relet as soon as the tenant leaves. Therefore, either the landlord takes a void or the tenant pays double, either way, it’s a bad idea.
How Would The Removal of ASTs Affect Single Lets?
Although this would be a major change for many landlords it isn’t actually something to fear unless you let bad properties. I have always been willing to begin a tenancy on a rolling monthly contract – Contractual Periodic – because I am confident that my tenants will only leave when they need to, not when they want to escape from my property or me!! Even when a tenant is on a fixed term and suddenly needs to leave, it’s best to just let them go, because a reluctant tenant is not going to be a good tenant and, in most areas, you will relet very quickly. In fact, I cannot see any judge awarding full rent for the whole of a fixed term unless the landlord has really tried and failed to relet the property – remember that we can charge the tenant costs for finding a replacement.
In my opinion, the government needs to divide the PRS into markets and look at this change as it would work, for both landlords and tenants (or not) in each separate sector. I believe that they could still give tenants in single lets the freedom and security they need without upsetting the other markets.
What Would That Mean for Landlords of Single Lets?
If we misrepresent a property or promise repairs that are noted at move-in or behave badly towards the tenants – invading their privacy, etc., the tenant can up and leave with a month’s notice. This is what this is all about – tenants not being tied to a property that isn’t what it seemed or a landlord/agent who doesn’t know how to treat a customer. In my opinion, this would be good for the sector, and remember there is still a shortage of property to rent and therefore a tenant is very unlikely to leave without good reason. What this will mean is that the tenant has leverage if they need it and it may give some landlords a wake-up call.
I am fed up with feeling embarrassed when I read about the actions of some landlords and agents. I am fed up with the arrogance of those landlords who believe that there are so many good tenants out there they can treat them as they wish – this imbalance of power over a person’s home was never going to continue. And I am on the side of fair play.
BACK TO EARTH
Meanwhile business goes on for most of us and we need to deal with day-to-day issues including one which has always been there but has become a bigger problem recently.
Bed Bugs
There are reports of a serious bed bug infestation in France and the government there are concerned that this must be eradicated before the Olympic Games next year. Apparently, there are issues on the public transport in Paris where some people are afraid to sit down for fear of picking up bed bugs. There are now reports on Facebook groups about bed bugs in rented properties in England.
The problem with bed bugs is: where do they come from? It isn’t always the tenant who reports them who has brought them in, because some people are not bitten and may carry them without realising because it’s only the results of their bites that make us aware of them. The creatures themselves are so tiny and hide in the smallest places they often are not seen. A couple of years ago there was a Facebook discussion on this topic and one post gave very clear instructions. I have always kept a copy of that post and I will share it now so that if you have a problem you can deal with it without wasting time or spending a lot of money. Remember even when they have only been identified in one room, the whole building needs to be cleaned otherwise they will return in a matter of weeks and don’t waste time trying to find the culprit, your business is at risk, and you need to take urgent action:
HOW TO REMOVE BED BUGS
Spray with permethrin, that will instantly kill 90% but 10% resistance so to prevent reinfestation you need Ficam, available on eBay. Treat 3 times at weekly intervals and clean as if your livelihood depends on it – it does. All cracks/crevices, look in the plug sockets as well, they hide there. You shouldn’t need to replace everything.
Remember the curtains and other soft furnishings need treating. wrapped in a plastic bag and left in the sun for a few hours will kill them.
Author unknown
Finally, for those who let short-term/holiday lets this new guide has been issued by the Home Office:
A guide to compliance with fire safety law for those responsible for safety in small paying-guest-accommodation
A guide to making your small paying guest accommodation safe from fire
