With the introduction of the Renters’ Rights Bill, it will become increasingly important for landlords to set the rent amount carefully.
Advertising rent
Properties will need to be advertised at a ‘proposed rent’, and landlords will be unable to charge more than this advertised amount. This means that practices like bidding wars will no longer be allowed. If the tenant believes that the amount set is too high, they will be entitled to challenge this to the First Tier Tribunal within the first 6 months of the tenancy. Therefore, it is important this amount is not set either too low or too high.
Tenancies will be required to have rent periods that are monthly, or no longer than 28 days. Any attempt to increase this period will have no effect and rent will still be payable monthly.
Rent in advance
The rules regarding taking rent in advance will also be changing.
Before the tenancy agreement is signed, the landlord can only take a holding deposit and a tenancy deposit from the tenant. If any other payments are offered by the tenant, these should be refused by the landlord.
Once the tenancy agreement has been signed, one month’s rent can be taken in advance only. The tenancy agreement should not be conditional on this amount being paid.
During the tenancy, the landlord cannot ask the tenant to pay rent prior to the month that it is due. For example, June’s rent cannot be requested on the 31st May, but it can be from the 1st June and onwards. The tenant can, however, choose to pay the rent in advance if they wish to do so.
Increasing rent
Once the Bill comes into effect, rent review clauses will automatically become invalid.
The only way to increase rent will be to do so annually using a section 13 notice. The notice period for a section 13 notice will be increased to 2 months.
After a section 13 notice has been served, if the tenant believes that this amount is too high, they can challenge this to the First Tier Tribunal on the basis that this is not the ‘market rent’. They can also challenge this if they believe that the notice is defective.
If the new rent is challenged, it will not apply until the date of determination by the tribunal. Until then, the old rent will continue to apply. The tribunal cannot award the rent to be any more than the amount proposed in the section 13 notice served by the landlord.
The landlord and tenant could agree a new rent in writing, but only after a section 13 notice is served, and the amount agreed cannot be more than what is stated in the section 13 notice.
Rent arrears
Where a tenant falls into rent arrears, landlords will still be able to serve a section 8 notice to evict the tenant from their property.
The relevant grounds surrounding rent arrears will still apply however, ground 8 will now only apply if the tenant is in either 3 months or 13 weeks rent arrears and delays in universal credit will no longer be considered as part of these arrears. The requisite notice period in this case will also change to 4 weeks, replacing the current 2 weeks’ notice.
Should you need any further advice on landlord and tenant law or recovering rent arrears please contact our specialist solicitors on 01616 966 229 or complete our online enquiry form.
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