Welcome to our first Newsround of May, and the day when the Renters’ Right Act comes into force, but let’s what else has been in the news this week.
Today, the Renters Rights Act comes into force!
It’s been a long time coming, but it is finally here. Assured shorthold tenancies and section 21 are out. Assured periodic tenancies and new rules for rent, pets and Local Authority enforcement are in.
The changes are so many that I have closed my Landlord Law site for a couple of days while I update the content to comply with the new rules.
In the meantime, I am publishing a new series on this blog looking at how the reforms will change the private rented sector – the first post is here.
RRA reforms are good, but landlords need support too
Lesley Horton who is the UK’s chief property ombudsman welcomes the RRA as it gives tenants more security and better protections but she also states that smaller landlords will need support to adapt to the new changes. She says
The reforms present an opportunity to strengthen the sector, and by ensuring landlords have access to professional advice and a clear implementation timeline, we can maintain a healthy supply of quality rental properties.
She added that the act should protect tenants more from rogue landlords bringing in ‘more professionalism and higher standards’.
Letting agents failure left landlord culpable
A landlord was left culpable after a letting agent, that they instructed on a full management term, failed to protect their tenant’s deposit into a government backed scheme.
The landlord assumed that the letting agent had dealt with the deposit correctly and served the tenant with the prescribed information. This omission meant that the unaware landlord was open to penalties and other costs.
When this came to light via the tenant advising the landlord, the landlord sought damages against the letting agent that claimed an ‘administrative oversight’ was the cause. However as the tenant had not made a claim the case officer said that no compensation award could be given for a ‘theoretical loss’.
This case highlights that whilst landlords delegate duties to letting agents, they still remain accountable if an agent fails in its ‘contractual duties’ and the law still views ‘the landlord as the ultimate custodian of the tenancy’.
Sean Hooker, Head of Redress said
An agent’s administrative error can remove your ability to manage your property effectively and result in significant financial loss. Trust your agent – but verify their work.
Landlords could ‘price risk’ new tenants as RRA comes law
The Renters Reform Act coming into force today will afford better protection for tenants, but is predicted to change the risk assessment process that a landlord goes through when taking on a new tenant. Which could potentially price some tenants out.
As gaining possession of your property becomes harder, landlords will focus more on affordability and financial resilience of a prospective tenants, leaving some tenants ‘squeezed out’. This could impact applicants with irregular or non-traditional income, students without excellent guarantors, those with a slightly bad credit history. These will all be hit with deeper scrutiny.
Referencing will also become a lot more rigorous and stricter. Landlords could also increase the threshold for affordability from two and half times rent to three or even more times. Guarantors are also expected be become more essential. The landscape for selecting tenants is ‘evolving’ according to LegalforLandlords who claim that the ‘Act will not reduce demand but it will raise the bar for what constitutes an acceptable tenant’.
High proportion of tenants have a good landlord relationship
It seems that most tenants experience a good or neutral relationship with their landlord, with only 5% having a negative relationship, according to a new survey out by Hiscox.
A quarter of tenants have a friendly landlord, and 24% say their relationship is professional. Most tenants want their landlord to respect their privacy, be responsive and freely communicate with them.
Michael Dear of Hiscox said
It’s clear that small, thoughtful actions like respecting boundaries, addressing repairs promptly, and being transparent about rent can have a huge impact on tenant satisfaction.
You can read more here.
Snippets
Most landlords to be stricter choosing tenants – survey
Suspended prison sentence handed to abusive landlord
Major property owner says Act will ‘weed out bad landlords’
End of upward-only rent reviews, what does it mean for landlords?
Solicitors report late flood of no-fault evictions before ban in England
See also our Quick News Updates on Landlord Law
Newsround will be back again next week
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